Research Report
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December 19, 2007
Rating:
JDA Software Group, Inc. (JDAS)
Industry: Technology
Analyst: Alan Weinfeld (212) 675-4100
Neutral
aweinfeld@henleyandcompany.com
Company Description
JDA Software Group, Inc. provides supply and demand management software solutions for retailers, manufacturers, and wholesalers/distributors worldwide.
The company offers transaction systems, including merchandise operations systems, transportation and logistics management, and store systems. It provides
supply and demand optimization solutions that include a set of tools for decision support and analysis covering planning, forecasting, manufacturing planning
and scheduling, price and revenue optimization, inventory optimization, collaborative synchronization of inventory, distribution, production and material plans,
category management, and workforce management, as well as revenue management solutions. The company also provides consulting services, training, and total
solutions provider hosting services. It serves retail customers; manufacturing and distribution companies, including consumer goods manufacturers, high tech
organizations, oil and gas companies, automotive producers, and various discrete manufacturers; and service industries, such as travel, transportation,
hospitality, media, and telecommunications. JDA Software Group was founded in 1985 and is headquartered in Scottsdale, Arizona. (Source: Yahoo Finance)
Key Data
Price (As of Close 12/18)
Shrs Outstanding(M)
Market Cap
Avg. Volume
52 week High
52 week Low
Beta
$20.77
34.70
$655.70
351,752
$25.51
$13.30
1.64
Cash
Cash per Share (MM)
Debt (D)
Equity (E)
Inst. % Ownership
Key Investment Considerations
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Leading supplier of mission critical Demand and
Supply Chain Management software; .Product
offering uniquely spans the global supply chain market
from manufacturer floor to retail shelf with unrivaled
domain expertise.
Expanding. Long Established Installed Base of
5,500 Diverse Retail & Supply Chain Customers.
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These companies are a diverse base of very large and
mid sized retail enterprises and suppliers whose
recurring revenue stream of annual maintenance
revenues with ~ 95% renewal rates. These customers
also account for about 60%-70% of annual revenues.
Ability to Up sell the Customer. JDA inherited
some great technology from Manugistics, which they
purchased last year.
They have 100 enterprise
backbone deployments running, but they need to take
the opportunity to sell tech that MANU couldn’t sell to
a large base.
Possible value trap. We agree that this stock is
cheap, but if JDAS don’t buy somebody in 2008, we
don’t see a catalyst to get the stock to break out anytime
soon.
$82.60
$2.42
$98.30
$373
91.20%
Revenue Q1 07
Gross Profit
EBITDA
Net Income
$93.6
$57.8
$21.6
$0.40
Valuation
We are initiating coverage of JDA Software Group, Inc. with a Neutral
rating and a price target of $23. We are giving the company a slight
premium to its 15% 3 – 5 year CAGR. JDA has sold at a much higher
and lower multiple in past years when revenue organically grew slowly
or declined and earnings grew slowly or declined. Now that JDA is
continuing to roll up its core retailer and supplier to retail market gunning
for market share and only organically growing revenue 3% and 4% in
FY2008 and FY2009, we feel a no more than a mid-teens multiple is
warranted. We are therefore assigned JDAS a 16 multiple on its $1.45
FY2008E and a target price of $23.
Please see important disclosures on pages 17 and 18 of this report
1290 Reckson Plaza
Uniondale, NY 11556
(800) 753-8688 Toll Free (516) 794-5520 Main (516) 794-6207 Fax
Member NASD/MSRB/ SIPC
Business Description
JDA Software Group, Inc. is the global leader in helping more than 5,500 retail, manufacturing and wholesale-distribution
customers in 60 countries realize real demand chain results. By capitalizing on its industry position and financial strength, JDA
commits significant resources to advancing the JDA Solutions suite of vertically-focused supply and demand chain solutions.
JDA Solutions enable high-performance business process optimization and execution to achieve a connected view of the
customer from raw materials flowing into production to end-consumer products at the shelf. With offices in major cities around
the world, JDA employs the industry’s most experienced supply and demand chain experts to develop, deliver and support its
solutions.
JDA Software is a global leader in providing integrated software and professional services that address real-world issues to help
multi-channel retailers and consumer product goods companies (CPG) manage their mission-critical operations. In a more
difficult applications software environment, a vertical focus in an industry with growing software spending is very favorable.
JDA’s global Consulting Services Group (CSG) is one of the largest and most experienced demand chain consultancies in the
world. CSG is also uniquely positioned to deliver comprehensive services across all areas of the value chain. From
manufacturing all the way to finished goods at the shelf edge, customers can leverage CSG to more effectively run business and
maximize bottom lines.
When licensing a JDA solution, CSG empowers customers to benefit from the industry’s lowest cost implementation in time
frames that support customers’ immediate gains. Certified on the latest JDA releases, JDA’s consultants apply proven
methodologies that consistently result in projects completed on-time and on budget. We also work with third-party business
alliances, consulting firms and system integrators.
JDA's consulting, client support and maintenance services are very strong and will contribute close to 81% of JDA's revenue in
2007. JDA also partners with system integrators, but it is able to keep costs low with its own in-house design, planning,
implementation, training and maintenance services. This in-depth knowledge has
made JDA a strategic choice for many companies worldwide and allowed it to integrate its solutions into some other vendors'
products to capture market share.
Best of Breed Versus Integrated Suite? JDA Software Satisfies Both. Retail IT commitment is growing as a one-stop
shop for packaged software is now available through inside divisions of large companies and JDA Software. In our opinion,
other enterprise and applications software companies do not have truly effective merchandising modules (the ERP system for
retail). Large retailers, most of Oracle's client base and the target clients that JDA has been attempting to reach, have difficult
scalability challenges, due to the number of SKU/store combinations.
Retailers Are Finally Spending On Software. Why Now? Over the past five years, retailers have undergone a sea
change in their thinking regarding technology in general, and software in particular. We estimate that in the 1980s and 1990s,
retailers invested approximately 1% of revenue on information technology. Companies focused their capital expenditure
budgets instead on new square footage to drive growth. This is changing. According to AMR Research and the National Retail
Federation, retail IT budgets rose to high single digits in the last few years, which was double the increase experienced in the
beginning of the decade. Forrester also said that in retail, companies that raised their IT budgets in 2005 did so by an average of
approximately 20%, versus the 12% they are predicted for the rest of the economy. Forrester believes that 38% of this increase
in retailer IT budgets went toward new spending initiatives such as application software. In particular, we believe retailer
technology dollars are being spent on software tools that facilitate multi-channel customer relationships, Java Point of sale
systems, strategic merchandising and inventory and supply chain management.
Survey of Dozens of Large Retailers: Packaged Software Is a Budgetary Priority. In the time since we have been
following JDA we have surveyed dozens of large and small customers of JDA Software and have walked through stores
outfitted with JDA software to see their products working over time. Results suggest that corporations are shifting their
budgetary priority to improved inventory turnover, Point-of-Sale Systems and automated replenishment. The majority of
retailers are running legacy systems, which were mostly internally built and which are over 10-15 years old. For the average
retailer today, 50% of the software developers' efforts go toward maintaining existing applications, not building the tools of the
future. Scalability and integration are very difficult with the current retail IT architecture. We believe there is a major shift
under way in the retail technology landscape toward packaged applications software, and away from home-grown systems.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 2 of 18
Top-50 Retailers Are Moving Toward Packaged Software. The penetration of packaged software into the top-50
retailers (by revenue) is currently 80% and we estimate that 100% of the top-50 retailers will purchase some modules, if not the
entire footprint, by 2010 (see Top-50 table). To be fair, some of the top 50 like Starbucks, or McDonalds, are probably using
POS (Point of Sale) systems which may be sold by an array of vendors like Micros.
ROI Driving Push Toward Retail Applications Software Due to Extremely "Overstored" Nature of the Retail
Industry. The extremely over stored retail industry has refocused on ROI, maximizing the assets they already possess. In the
U.S., there are more than 20-retail-square-feet per capita, versus 5-square-feet per capita in 1970. If we examine retailers
Abercrombie & Fitch, Ann Taylor, Bebe and The Gap this group's square footage grew at an annual growth rate of more than
20% from 1994 to 2003. This group's productivity (sales per square foot) fell an average of approximately 18% from 1999 to
2003, and profitability (operating margins) fell an average of 500 to 700 basis points from 1999 to 2003 as the economy
reverted to a more normal 3% growth rate. This combination is driving retailers to find software solutions that help them
maximize sales per square foot. The favored retail IT solution is a one-stop shop for packaged software.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 3 of 18
Top 50 Domestic Retailers Moving to Packaged Software
($ Billions)
Retailer
2006 Revenue
Software Vendor
Softlines
Wal-Mart
Home Depot
Kroger
Costco
Target
Sears Holdings
Walgreen
Lowe's
CVS
Safeway
Best Buy
SuperValu
Federated Department Store
Ahold USA
Publix Supermarkets
McDonald's
JC Penney
Staples
Rite Aid
TJX Companies
Delhaize America
Gap
Kohl's
Office Depot
7-Eleven
Toys'R'Us
Meijer
H.E. Butt Grocery
Circuit City
Pilot Travel Centers
Jean Coutu Group
Amazon.com
Limited
348.7
90.8
66.1
60.2
59.5
53.0
47.4
46.9
43.8
40.8
35.9
28.0
27.0
24.0
21.7
21.6
19.9
18.2
17.5
17.4
17.3
15.9
15.5
15.0
15.0
13.1
12.8
12.8
12.4
11.8
11.1
10.7
10.7
Retek for .com, i2, MANU, JDA Portfolio Space Mgmt & Intellect, MANH Logistics.com
Retek for Data Warehouse & Store Operations, i2, JDA Portfolio Space Management
Retek Supply Chain, i2, JDA Intactix & PMM for Fred Meyer
undetermined
i2, JDA Portfolio Space Management, Intellect & Neovista, MANH Warehouse Mgmt
JDA Portfolio Space Mgmt, Win/DSS, Arthur, MDS Outlook, Pinpoint & SMM, Replenishment, Retek for Canada, i2 for UK,
Retek, JDA Portfolio Intellect, MANH
i2, JDA Portfolio MDS Outlook and Pinpoint & JDA MMS for Eagle
Retek, i2, JDA Portfolio Collaboration, E3Trim, Pinpoint & MDS Outlook
i2, JDAS, MANH
Retek XI, i2 Trans. Mgmt, JDA Portfolio Arthur, Replenishment and Space Mgmt, DSGX, ARBA
Retek, JDA Portfolio Space Mgmt & Replenishment for Bigg's, MANH
Retek Merchandising, i2, JDA Portfolio Arthur, Merchandising, Win/DSS, Retail IDEAS for Liberty House, MANH
JDA Portfolio Replenishment, Intactix, E3 also in Europe, MANH
i2
undetermined
Retek, i2, Eckerd is using JDA Portfolio Replenishment Optimization & MANH
MANU, JDA Portfolio Merchandising, Arthur, Replenishment & Allocation, MANH for online
MANU, JDA Portfolio Collaboration, E3, Intactix, MDS Outlook And Pinpoint
i2, JDAS
i2, JDA Portfolio for Hannaford Division
Retek XI, JDA Arthur
Retek, i2, JDA Portfolio Arthur, Replenishment, MDS Outlook and Pinpoint
Retek Merchandising, JDA Portfolio Merchandising, Space Mgmt, Win/DSS for international stores, MANH
Retek Logistics (warehouse mgmt system), JDA Portfolio Intactix, Prosort, Profusion, Prospace
i2, Retek Demand Planning, Babies 'R'Us - JDA Portfolio Space Mgmt, MANH
JDA Portfolio Arthur, Intactix, Intellect, Merchandising
JDA Portfolio Merchandising, Intactix, Intellect, Arthur Planning, Allocation, MANH
JDAS
undetermined
undetermined
undetermined
Retek DMS, i2, MANU, JDA Portfolio Planning, Assortment, Allocation, Retail IDEAS,
JDA TPS at Aura Science, Merchandising for Bath & Body Works, Replenishment for IBI, MANH
Alimentation Couche-Tard
Yum! Brands
Dollar General
OfficeMax
Army Air Force Exchange
Nordstrom
BJ's Wholesale Club
Dillard's
Starbucks
Winn-Dixie
QVC
A&P
Bed, Bath & Beyond
Menard
Family Dollar
Giant Eagle
The Pantry
Total
10.2
9.6
9.2
9.0
8.9
8.6
8.5
7.8
7.8
7.2
7.1
6.9
6.6
6.6
6.4
6.1
6.0
undetermined
MICROS
JDA PMM, Arthur, Intactix, Intellect, MANH
JDA Portfolio Space Mgmt, Assortment, Merchandising for International,
Retek
Retek, MANH for department stores and direct business
JDA Portfolio Replenishment, MDS Outlook! And Pinpoint!, MANH
i2
undetermined
i2, Retek, JDAS
undetermined
Retek, JDAS
JDAS, MANH
undetermined
Retek
MANH & JDAS
undetermined
$1,394.7
Source: Henley & Company, National Retail Federation and JDA Software
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 4 of 18
Industry Competition
Source: JDA Software
Product-Market
Principal Competitors
Retail Enterprise
Systems
AC Nielsen Corporation, Aldata Solutions, Alphameric PLC, Connect3 Systems, Inc.,
Island Pacific, Inc., Micro Strategies Incorporated, Lawson Software, NSB Retail
Systems PLC, Oracle and SAP AG.
CRS Business Computers, Kronos Incorporated, MICROS Systems, Inc., Radiant
Systems, Inc., Tomax Technologies, Workbrain, Inc. Workplace Systems International,
NSB Retail Systems PLC, and SAP AG (Campbell Software Division).
AC Nielsen Corporation, i2 Technologies, Information Resources, Inc., and Synchra
Systems.
IBM Global Services, Cap Gemini, Ernst & Young, Kurt Salmon Associates and
Lakewest Consulting.
In-Store Systems
Collaborative
Systems
Consulting
Services
As you can see, JDA has plenty of competitors, but with the Manugistics acquisition they broaden their footprint and can do
many more services for the same customer. They certainly lose point solutions like in-store systems to Micros or large back
office deal to Lawson Software, JDA wins their fair share in their sweet spot, which is medium to large retail and consumer
goods enterprise application software with a consulting tail for a good year.
EO
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 5 of 18
Products and Solutions
•
Supply & Demand Optimization
o Enterprise Planningƒ
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Space & Category Management
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JDA Enterprise Planning – A workflow-driven planning solution that helps in the synchronization
process of all planning metrics, including sales, margins or turns, across functional organizations and
reconciles them up and down the enterprise hierarchies. This single, integrated solution for
financial, merchandise, channel and key item planning enables rapid response to changing market
conditions and supports and optimizes the financial and operational planning activities in the value
chain.
JDA Allocation- To be discussed in detail below.
JDA Enterprise Knowledge Base- Provides an infrastructure for Enterprise Planning that is powered
by Arthur®. It stores business entity relationships including store groups, assortment time periods
and assortments. It is completely scalable to Tier 1 retailer volumes and provides the capability for
assortment planners to adjust their plans to reflect changing store sales trends while maintaining
original store group targets while integrating Enterprise Planning suite with other JDA applications.
JDA Size Scaling- To be discussed in detail below.
JDA Clustering- To be discussed in detail below.
Efficient Item Assortment by Intactix- A strategic knowledge-delivery solution that follows the
industry’s best practice EIA procedure to streamline the analysis and decision making process
inherent to category management. Categorized by a number of key capabilities: Assortment
implementation based on consumer demand data, master assortment lists generated at the push of a
button, assortment decision management by exception, recommendation review enabling final
decisions on adds, deletes and retains.
Space Planning by Intactix- The most widely used planogram tool which streamlines execution of
top-level category plans.
Space Planning enables multiple planograms to be managed
simultaneously, improving consistency and accuracy as products are quickly and easily added,
replaced or updated across the entire planogram set. It supports optimization and analyzing of
planograms against any metric (i.e., balance space to sales and/or days of supply).
Floor Planning by Intactix- Floor Planning maintains store floor plan accuracy as well as increases
store productivity. Create and maintain precise store-specific floor plans that enable the
maximization of positions, performances and layouts of product categories on new and existing store
floors – right from a computer desktop. This solution also allows the user to perform cross-category
and cross-floor plan analyses to instantly compare the layouts of its best and worst performing
stores, which is critical to maximizing selling space effectiveness.
Shelf Assortment by Intactix- Shelf Assortment supports analysis of assortment-to-space metrics,
enforces inventory modeling and merchandising rules, and executes assortment decisions with
available space.
JDA Channel Clustering- Replaces inefficient and traditional store clustering methods with a
scientific approach that proves intelligent, predictive, and descriptive data mining algorithms. It
groups stores based on consumer purchasing behavior, refines and improves clustering results,
correlates census data, enables tailored assortments, and supports cluster-specific marketing
strategies.
Price & Promotion Management
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JDA Trade Event Management for Retail- Optimizes pricing and promotions planning and execution
to generate maximum sales and margin dollars. Price and Promotion Management improves
financial predictability and utilization of promotional dollars at all levels, optimizes the pricing of
promotions, and generated maximum value from excess inventory.
VistaCPG- VistaCPG is a fully integrated, web-based business application that was developed by
consumer goods industry experts for the consumer goods industry. VistaCPG provides a closed loop
solution that supports more efficient and effective promotions, resulting in increased profitability.
Providing real-time visibility of performance to budget by account/market, VistaCPG enables you to
improve service levels, increase sales and avoid overspend.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 6 of 18
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Demand
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JDA Advertising- Enables the production of targeted promotions that drive profitability and category
sales. This closed loop application allows for the strategic management of all promotions processes
including offer determination, ad production and ROI measurement.
JDA Promotions Management- Creates promotional what-if scenarios, establishes promotional price
at any level of the product hierarchy, evaluates promotional prices at the level of the product/location
hierarchy at which they were established for availability to price management systems.
JDA Markdown Optimization- Powered by Manugistics®, provides complete markdown event
profiles, time-phased price adjustments, multi-dimensional planning framework, and forecasted
spend, revenue and gross margin.
JDA Promotions Optimization- JDA Promotions Optimization (Promotions) identifies optimal
promotional campaigns, so that retailers can shape demand and achieve their merchandising goals
and objectives. The solution employs advanced statistical methods to predict the results of a
promotion at various levels of segmentation, such as store or channel. It provides real-time,
consumer driven promotion simulation, scenario analysis, and calculation of halo and
cannibalization effects both within and across categories.
JDA Shelf Price Optimization- JDA Shelf Price Optimization establishes optimal shelf prices by
customer and market segment, considering a variety of factors such as corporate pricing strategy,
volume and margin goals, competitive influences, varying customer responses to prices and other
causal factors. JDA Shelf Price Optimization provides the intelligence and discipline to help retailers
to better understand customers, better predict demand, and establish base prices that influence
demand in effort to achieve business objectives.
JDA Demand- JDA’s Demand solutions leverage multiple forecasting algorithms and methodologies
to drive forecast improvement across all types of products – fast- and slow-moving, lumpy, short life
cycle, trending, steady, highly seasonal, casual driven – across the Customer-Driven Value Chain.
JDA Seasonal Profiling- Uses pattern analysis to identify and assign persistent seasonality at product
location and location level. Season Profiling also provides exception management for effective
profiling of outlier cases, and automation takes care of the other 95+ percent. JDA Seasonal
Profiling produces profiles at low levels of the product hierarchy, on a location-by-location basis and
with indications of individual location/product time curves.
JDA Demand Decomposition- Provides users with a deeper understanding of demand history as well
as promotional impact and activity. It utilizes a collection of advances statistical algorithms that
segment exogenous factors from base demand history, and defines a better baseline forecast.
Allocation & Replenishment
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JDA Allocation- JDA Allocation enhances and translates customer knowledge into pinpointed
allocations. With JDA Allocation, optimization of store-specific product assortments across entire
retail organizations is possible. Including a full range of allocation techniques, all details are
allocated properly and efficiently.
Advanced Warehouse Replenishment by E3- Determines how often to buy from vendors for
maximized profits, optimizes the order cycle that will maximize profitability, all while considering
costs, service level goals, forecasts, bracket discounts, and purchase and selling price. Advanced
Warehouse Replenishment is used in hundreds of companies in a wide variety of industries, ranging
from food and drug to fashion, hardware and auto parts, and eliminates the time-consuming, laborintensive manual processes of vendor to distribution management and replenishment.
Advanced Store Replenishment by E3- Proactively manages promotional profiles, focuses on
profitable inventory buying strategies, builds profitable orders, and enhances inventory management
productivity. It’s a true inventory management solution involving scientific and statistical
evaluations of each of the numerous variables involved in making a buying decision.
Vendor Managed Replenishment by E3- From communications, negotiations and other key elements
of Collaborative Planning, Forecasting and Replenishment (CPFR), VMR enables vendors to
execute forecasting and replenishment based on a retailer’s point-of-sale data, while building
optimum orders for distribution centers (DCs) and stores. Vendor Managed Replenishment presents
the information needed by retail analysts so that they can take advantage of the best offers, manage
exceptions, monitor promotions and perform additional buying and merchandising services for their
customers.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 7 of 18
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JDA Fulfillment- Offers multi-level replenishment planning, a large-scale processing engine,
finished good allocation flexibility, date-sensitive inventory management, forecast consumption,
purchase optimization and forward buying capabilities, and dynamic deployment.
JDA Dynamic Demand Response- An intelligent, highly scalable short-term forecasting solution that
introduces science into the process of allocating, consuming and adjusting short-term forecasts. It
transforms the time-consuming task of monitoring known demand signals into an automated,
efficient process.
JDA Size Scaling- By rapidly reviewing a massive input of POS data, Size Scaling will determine a
best-fit size template for ordering, allocation and replenishment by style, class or department.
Features include: store-size level size demand history used to determine size scales by product by
location, pre-pack optimization to select optimal size/color packs, and provides optimal packs
generated for each size grouping and distribution error is calculated.
Supply & Manufacturing Management
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JDA Master Planning- JDA Master Planning helps companies determine the best time and place to
make the product to meet consumer demand. The solution allows consumer goods firms to manage
production across multiple sites efficiently in response to changing consumer demand. It offers
multi-level capacity planning, the ability to constrain simultaneously on material and capacity, and
the ability to employ optimization.
JDA Supply- JDA Supply enables manufacturing organizations to plan material and capacity needs
in one system to create a production plan that minimizes cost and improves customer service. It
begins with an initial manufacturing plan, and then reviews new and scheduled purchase, transfer or
manufacturing requirements to determine new requirements. New material and manufacturing
requirements are calculated, and the solution then performs a series of what-if simulations that
balance the demand picture with available material and capacity to determine various constrained
plans.
JDA Sequencing- JDA Sequencing generates a synchronized, demand-driven manufacturing
schedule that optimizes materials and resource capacities across each stage of the manufacturing
process. As part of the process, Sequencing considers detailed capacity, product mix and labor
constraints. It enables companies to create sequenced plans for all products while gaining visibility
into assembly line constraints.
Source: JDA Software
o
Network & Inventory Optimization
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JDA Inventory Policy Optimization- Helps companies determine safety stock levels at various
locations in retail and distribution supply chains so as to achieve the user-specified fill rate or in-
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 8 of 18
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Collaboration
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JDA Marketplace Replenish- Supporting full-scale Collaborative Planning, Forecasting and
Replenishment (CPFR®) programs, Marketplace Replenish follows the VICS CPFR model steps 3-5
and 9. Allows users to create sales forecasts, identify sales forecast exceptions, collaborate on
exception items and generate orders. It also helps improve the effectiveness of promotions and
assortments by leveraging each business side’s knowledge.
JDA Marketplace- JDA Marketplace is a network of private exchanges, and can be defined as a
hybrid of the public and private marketplace models. JDA Marketplace connects trading partners to
private marketplaces and provides content and community to the trading partners participating in the
site. It enables trading partners to have visibility and interaction on a many-to-many basis.
JDA Collaborate- JDA Collaborate offers robust, role-based access, so all collaborative stakeholders
can view and adjust data designed just for their products, customers and geographies. Using tools
such as flexible hierarchies and conversion factors, users can also create their own views to present
the data exactly as they want to see it. Allows for flexible hierarchies for viewing data, multiple data
versions and tracking, flexible user view creation, and joint business plan creation and monitoring.
Transportation & Logistics Management
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stock targets. It provides individual and group level performance metrics, seamless integration with
demand and replenishment planning, and also provides reverse safety stock capability.
JDA Strategy- JDA Strategy is a comprehensive tool set designed to analyze the key factors
associated with operating an end-to-end supply network, including costs, capacity and locations, and
then optimize the network to help you achieve the lowest total landed cost and the highest possible
profits.
JDA Transportation Planning- JDA Transportation Planning is designed to manage, optimize and execute the
strategic, operational and tactical business processes that support the global movement of goods. This
solution integrates the many facets of today’s transportation and logistics departments, creating a webenabled command and control center for domestic and international business operations.
JDA Logistics Sourcing - JDA Logistics Sourcing delivers an electronic method of distributing RFQs to
logistics service providers. The solution gathers lane, price and capacity information and then awards bids to
the optimal service providers.
JDA Freight Order Management – A platform for collaborating with suppliers on activities related to inbound
shipments. It provides visibility to the supply process and allows collaboration between vendor and
shipments.
JDA Freight Audit & Payment - JDA Freight Audit & Payment provides shippers with a means to effectively
manage their freight audit processes in-house and provide opportunities to increase productivity, reduce
freight expenses, and stay compliant with tight financial regulations.
JDA Shipment Execution - JDA Shipment Execution creates a web connection through which a carrier can
view the loads and bookings a shipper has tendered to them. Depending on the level of security access a
shipper has configured, the carrier can respond to tender offers, set pickup and delivery appointments,
communicate shipment status information and submit freight invoices. This web connection between shippers
and carriers can serve as an efficient alternative to fax, telephone or electronic data interchange (EDI)
tendering methods.
JDA Fleet Management – Uses constraint-based optimization to create detailed work plans that manage a
private fleet based on shipment requirements. It plans and dispatches the fewest routes that cover the least
number of miles in the shortest time, and enables more volume to be moved with no additional resources.
JDA Logistics Event Management & Visibility – Optimizes and resolves global exceptions, generates
automatic notification of business process exceptions, and has a real-time view of all trading network aspects.
This full exception management and monitoring platform is also completely customizable.
Store Systems
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JDA Point-of-Sale - A JAVA application that features component-based architecture and industry standard
database and operating system choices that deliver extreme scalability and flexibility. It allows customers to
make system-managed configuration changes or application upgrades on every register as frequently as
needed, without affecting custom code, at a reduced cost.
JDA Back-Office System – A Web Services back office solution that streamlines inventory movement and
transaction management. J2EE compliant, BOS utilizes an industrial-strength application server that delivers
Henley & Company LLC · 1290 Reckson Plaza ·
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Uniondale, NY 11556
Fax 516-794-6207
Page 9 of 18
o
o
•
Merchandise Operations
o
o
•
Portfolio Merchandise Management (PMM) - Ensures timely, accurate transaction information across your
enterprise as the starting point for inventory optimization. Control every item on shelves by counting,
costing, ordering, pricing, moving, valuing, and promoting them. Delivers broad functionality including
inventory control and procurement; vendor, price, cost and promotion management; receiving, allocation and
replenishment; financial management; and trading partner data synchronization.
Merchandise Management System-I (MMS) – A reliable, streamlined implementation at the lowest cost of
ownership. Features fully integrated merchandising, warehouse management and financial applications for
multiple sales channels. Its closed-loop architecture gathers, integrates and distributes data throughout
organizations to support the core inventory control, cost and price management, purchase order management,
automated replenishment and allocation of products. Also including decision support capabilities to provide
process tools to make more informed and timely decision, respond rapidly to changes in the competitive
environment, monitor store-level activity and achieve operational efficiencies.
Contract Manufacturing
o
o
o
•
extreme scalability, flexibility and reliability when processing and posting transactions to internal and
external systems.
JDA Workforce Management – Features include forecasting POS data, scheduling advanced algorithms and
combining projection and forecast data to determine the optimum schedule to meet traffic demands, time and
attendance facilitating recording and tracing, and corporate reporting for analyzing labor operations.
JDA Customer Relationship Management – Allows customers to gain greater visibility into its customer base
at every point of sale so that they can better serve their individual needs and foster their long-term journey.
JDA Maintenance, Repair & Overhaul- Provides the capabilities to meet the challenges of unique service
environments. Powerful solutions that help intelligently and profitably plan and schedule maintenance
programs, parts, materials, tools and manpower to meet the asset utilization, cost and customer service goals
required by customers. Features such as statistical forecasting, inventory optimization and multi-site finite
capacity scheduling help ensure your ability to optimally deploy spares, consumables and repair resources to
meet the needs of both planned and unplanned activities.
JDA Make-to-Order- Provides manufacturers with the information, planning tools and management controls
needed to help maximize on-time customer delivery performance. Also applicable in engineer-to-order (ETO)
and assemble-to-order (ATO) environments, MTO includes essential capabilities to help you streamline
operations, improve efficiency, meet specific customer requirements and enhance profitability.
JDA Procurement Management- JDA Procurement Management captures strategic agreements with suppliers
that not only define the specifics of the relationship, but also ensure that each purchase order is created with
the correct terms and conditions. Strategic agreements capture relationship information such as price breaks,
lot charges and payment terms. Directly integrating these agreements into the purchasing process enables the
organization to decrease maverick buying and improve contract compliance. Workflow tools automate the
end-to-end procurement life cycle by creating custom business process flows that incorporate the right
individuals, giving both internal and external partners greater visibility into transaction events.
Performance Management
o
o
o
JDA Analysis & Discovery- JDA Analysis & Discovery delivers specialized analytical capabilities tailored to
the business processes completed by JDA’s Supply & Demand Optimization solutions. Providing timely
analytical capabilities as an integral part of business processes and assisting your users in reducing time to
insight, JDA Analysis & Discovery facilitates decision making and provides managers and executives with
visibility into the trends that can affect your company strategy. Information is united from across JDA Supply
& Demand Optimization solutions in a variety of environments tailored to users needs and to the business
process being completed. It supports knowledge workers through insight into performance indicators, unites
data across Supply and Demand Optimization solutions, delivers actionable analysis through business
processes, and enables collaborative analytics.
JDA Reporting & Analytics- JDA Reporting & Analytics provides increased network and trading partner
visibility, consolidating key data elements that enable you to monitor and measure your company and supply
chain performance. Using a best practices approach, Reporting & Analytics works as a combined offering to
embed critical monitoring and measuring capabilities across JDA Solutions.
Performance Analysis by IDEAS- IDEAS is the only data warehouse designed specifically around the retail
business model. It is a client/server data warehouse that is secure, scalable, and centralized. Since this
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 10 of 18
flexible solution can be easily customized, users will correctly believe that they have their own ’personalized’
decision and action support software right on their desktop.
•
Enterprise Architecture
o
o
o
JDA Enterprise Architecture- Coupled with JDA’s world-class solutions, JDA Enterprise Architecture
synchronizes decisions based on “One View of Demand” that drive business innovation without sacrificing
IT efficiency, supporting competition in today’s expanding global markets. Built to deliver deep, industryspecific functionality, JDA Enterprise Architecture enables rapid implementation, allows for interoperability
with other IT assets and drives lower total cost of ownership. JDA’s grid technology enables companies to
solve business challenges through parallel processing in any hardware configuration, even those that span
hardware boundaries.
JDA Integrator- JDA Integrator provides centralized visibility and management of integration processes, as
well as tools to facilitate error management and resolution. JDA Integrator additionally provides an
accelerated timeline to complete integration tasks for JDA Supply & Demand Optimization solutions using
predefined integration solutions.
JDA Monitor- Features include the identification and resolution of exceptions, user defined business rules and
thresholds, and rule prioritization. It allows for the monitoring and managing of critical planning and event
information.
Source: JDA Software
•
Revenue Management
o Airline Revenue Management- Airline Revenue Management helps airlines maximize revenue and profits by
accurately forecasting future demand, optimizing price plans and optimally allocating capacity, based on
passenger price sensitivity as a key driver. It runs frequent optimization of prices and controls based on pricesensitive demand, available capacity and airline business rules, and provide optimization of overbooking
along with powerful reporting and data exploration capabilities.
o Rail Revenue Management – Helps forecast passenger journey demand in order to set the optimal quota of
seats available at the optimal fare. In other words, it allocates inventory so that availability for most valuable
customers is ensured while avoiding empty seats of services for which sufficient demand exists.
o Media Revenue Management – Media Revenue Management combines time series demand forecasting and
optimization processes to equip pricing analysts with the ability to manage the monitoring and adjusting of
pricing and products for thousands of future program air dates. The forecasts are dynamically updated with
data from the latest program air dates to keep the forecasts synchronized with current trends. The benefits of
this solution include reacting to spikes of demand to increase prices (or restrict availability) before sellout
occurs or, alternatively, to highlight early in the booking cycle those program air dates for which additional
sales emphasis is required to avoid last minute fire sales.
o Hospitality Revenue Management – Hospitality Revenue Management enables hotel and hotel/gaming
companies to more accurately forecast future demand and optimally allocate capacity according to customer
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 11 of 18
o
o
o
value and length of stay patterns. It features top-line growth for enhanced profitability, optimal price
allocation, accurate prediction of future demand dates, and determines what length of stay should be available
to each market segment for every upcoming arrival date.
Tour Revenue Management – JDA’s Tour Revenue Optimizer (TRO) offers sophisticated and advanced
revenue management and pricing capabilities. It provides the opportunity to generate significant profit
increases while improving customer service levels.
Cargo Revenue Management – Routinely considers the complexities of decision processes including late
bookings, shifting capacity and demand, competitor actions, variable and opportunity costs, market share
objectives, and other conditions.
Cruise Revenue Management – A powerful solution that offers comprehensive, sophisticated answers to the
continuing challenge of cruise revenue management. With Cruise Revenue Management customers gain an
exceptional ability to manage availability controls reservation systems to help maximize revenue from
expected demand, continually fine-tune performance and monitor results.
Evaluation Considerations
Compelling reasons to “BUY”
¾
JDA Software Group, Inc. is the global leader in helping more than 5,500 retail, manufacturing and wholesaledistribution customers in 60 countries realize real demand chain results.
¾
Their recent takeover of Manugistics has improved profitability and improved their product offering and continued
to show that JDA is good an execution with acquired best of breed products.
¾
JDA is finally offering real enterprise architecture to move their massive amount of IBM i-Series or AS/400 to the
21st century backbone of applications.
¾
The stock is incredibly cheap selling at its 15% long-term growth rate and 1.8 Enterprise Value (EV)/Sales.
The Downside at JDA Software
¾
Software license lumpiness could continue to hamper organic growth, no matter how many acquisitions the
company may make.
¾
We need to see the sustainability of higher margins as the company has realized most of the near-term cost synergies
from the integration, the services utilization is still struggling.
¾
Retailers’ decision to continue spending on using their legacy systems and not upgrading.
¾
An extended and prolonged economic unpredicted downturn could negatively impact the general IT spending.
Valuation
We are initiating coverage of JDA Software Group, Inc. with a Neutral rating and a price target of $23. We are giving the
company a slight premium to its 15% 3 – 5 year CAGR. JDA has sold at a much higher and lower multiple in past years when
revenue organically grew slowly or declined and earnings grew slowly or declined. Now that JDA is continuing to roll up its
core retailer and supplier to retail market gunning for market share and only organically growing revenue 3% and 4% in
FY2008 and FY2009, we feel a no more than a mid-teens multiple is warranted. We are therefore assigned JDAS a 16 multiple
on its $1.45 FY2008E and a target price of $23.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 12 of 18
Henley and Company, LLC
JDA Software Income Statement
Mar
17.0
2007E
Jun
Sept
18.6
15.5
26.7
2.5
29.2
44.5
26.5
2.7
29.2
43.0
90.7
0.5
21.3
2.5
11.1
35.3
55.5
61.1%
($ in millions)
2008E
Jun-E Sept-E
19.5
17.0
Dec-E
20.1
2006
49.0
Fiscal Years
2007E
2008E
69.7
74.3
2009E
77.6
28.2
3.0
31.2
46.4
25.4
3.2
28.6
47.1
90.1
9.1
99.2
129.2
112.7
11.0
123.7
176.2
108.6
11.6
120.2
184.4
114.1
11.9
126.0
190.0
95.9
0.7
20.0
2.8
11.7
35.2
60.7
63.3%
94.6
0.6
19.8
3.0
11.8
35.1
59.6
63.0%
95.8
0.9
18.7
3.2
12.0
34.8
61.0
63.7%
277.4
2.0
65.8
9.1
31.4
108.3
169.1
60.9%
369.5
2.7
82.4
10.8
46.3
142.2
227.2
61.5%
379.0
2.7
78.9
11.7
47.0
140.3
238.7
63.0%
393.6
2.8
80.5
11.9
49.3
144.6
249.1
63.3%
12.2
15.3
10.5
0.9
12.4
15.5
10.8
0.9
12.6
15.3
11.0
1.0
12.8
17.6
11.2
1.0
55.8
48.2
33.8
0.6
49.8
62.1
42.2
3.8
50.0
63.8
43.5
3.8
52.0
67.3
44.8
4.0
40.2
$19.5
38.1
$20.2
38.7
$23.0
38.8
$21.8
41.6
$20.4
137.8
$31.9
158.0
$69.2
161.0
$77.7
168.0
$81.1
23.1%
20.6%
21.8%
23.9%
23.0%
21.3%
11.5%
18.7%
20.5%
20.6%
4.2
4.0
1.9
5.2
4.0
1.9
4.0
4.0
1.9
3.2
4.0
1.9
4.2
4.0
1.9
5.2
4.0
1.9
9.6
9.6
16.5
15.9
16.5
15.9
16.5
16.0
Dec-E
18.5
Mar-E
17.7
31.5
2.9
34.4
43.8
28.0
2.9
30.9
45.0
27.2
2.6
29.8
45.1
27.8
2.8
30.6
45.8
90.8
0.7
20.3
2.7
11.7
35.5
55.3
60.9%
93.6
0.6
20.5
2.8
12.0
35.8
57.8
61.8%
94.4
0.9
20.4
2.9
11.6
35.8
58.6
62.1%
92.6
0.5
20.4
2.7
11.5
35.2
57.4
62.0%
13.8
14.8
10.6
0.9
12.0
15.1
10.6
0.9
11.9
14.9
10.4
1.0
12.1
17.3
10.8
1.0
Operating Expenses
Operating Profit
39.2
$17.2
37.7
$18.5
37.2
$21.6
Operating Margin
19.0%
20.4%
4.0
4.0
1.9
3.2
4.0
1.9
Software Licenses
Services
Consulting
Reimbursed Expenses
Total Services
Pure Maintenance
Total Revenues
Software Licenses
Consulting
Reimbursed Expenses
Pure Maintenance
Total Cost of Revenues
Gross Profit
Gross Margin
R&D
Sales & Marketing
G&A
Stock-based Comp
Amortization of intangibles
Restructuring and asset dispositio
In-process R&D
Net interest & other income
($2.8)
($2.4)
($1.8)
($1.5)
($1.3)
($1.0)
($0.7)
$0.0
($3.8)
($8.5)
($3.0)
$2.5
Pretax Profit
Pretax Margin
$14.4
15.9%
$16.2
17.8%
$19.8
21.2%
$18.0
19.0%
$18.9
20.4%
$22.0
22.9%
$21.1
22.3%
$20.4
21.3%
$28.1
10.1%
$60.8
16.4%
$74.7
19.7%
$83.6
21.2%
Taxes/(Benefit)
Tax Rate
$5.0
24.9%
$5.7
25.9%
$6.2
24.2%
$6.0
25.2%
$5.7
30.0%
$6.6
30.0%
$6.3
30.0%
$6.1
30.0%
$9.9
35.1%
$24.4
40.1%
$24.7
27.2%
$25.1
30.0%
Net Income (Operating)
$9.4
$10.5
$13.6
$12.0
$13.2
$15.4
$14.8
$14.3
$18.2
$36.4
$50.1
$58.5
Net Income (Reported)
$7.5
$8.6
$11.8
$10.1
$11.3
$13.5
$12.9
$12.4
$8.7
$19.9
$33.6
$42.0
EPS (cash)
$0.28
$0.31
$0.40
$0.34
$0.38
$0.45
$0.43
$0.41
$0.58
$1.33
$1.45
$1.65
EPS (reported)
$0.22
$0.25
$0.34
$0.29
$0.33
$0.39
$0.37
$0.36
$0.27
$0.58
$0.97
$1.18
31.5
34.1
34.6
35.5
Diluted Shares
33.6
34.0
34.4
34.7
34.8
34.5
34.6
34.6
18.8%
29.5%
49.0%
38.9%
61.1%
97.3%
20.5%
19.0%
15.2%
16.3%
11.7%
20.5%
29.2%
47.3%
39.1%
60.9%
96.1%
23.2%
20.4%
13.2%
16.6%
11.6%
16.6%
33.6%
46.7%
38.2%
61.8%
95.9%
35.1%
23.1%
12.7%
15.9%
11.1%
19.6%
29.7%
47.6%
37.9%
62.1%
95.1%
27.3%
20.6%
12.8%
18.3%
11.4%
19.1%
29.3%
48.8%
38.0%
62.0%
96.9%
24.7%
21.8%
13.2%
16.6%
11.4%
20.3%
29.0%
47.7%
36.7%
63.3%
96.4%
28.2%
23.9%
12.9%
16.1%
11.3%
18.0%
29.8%
49.0%
37.0%
63.0%
96.8%
30.1%
23.0%
13.3%
16.2%
11.6%
21.0%
26.5%
49.2%
36.3%
63.7%
95.5%
26.4%
21.3%
13.4%
18.4%
11.6%
17.7%
32.5%
46.6%
39.1%
60.9%
95.9%
26.9%
11.5%
20.1%
17.4%
12.2%
18.9%
30.5%
47.7%
38.5%
61.5%
96.1%
26.9%
18.7%
13.5%
16.8%
11.4%
29.2%
33.7%
37.0%
37.0%
63.0%
96.9%
29.0%
12.8%
20.9%
18.2%
12.1%
29.2%
33.7%
37.0%
36.7%
63.3%
96.9%
29.0%
12.8%
20.9%
18.2%
12.1%
89.6%
99.5%
736.2%
328.2%
75.3%
85.3%
487.3%
217.2%
5.0%
6.5%
61.0%
99.4%
6.4%
2.6%
47.1%
69.9%
2.1%
3.4%
17.3%
35.9%
5.7%
9.8%
23.8%
44.6%
1.1%
3.0%
0.8%
7.7%
1.5%
4.1%
4.8%
19.8%
28.5%
593.2%
23.9%
606.5%
29.2% 1452.0%
-9.0%
965.3%
2.6%
5.1%
12.3%
8.8%
3.9%
4.3%
4.3%
14.0%
2.3%
-2.9%
29.9%
37.6%
0.0%
-0.3%
7.9%
10.5%
3.2%
4.3%
25.8%
41.9%
0.8%
1.3%
-10.0%
-13.0%
-1.9%
-2.1%
3.6%
10.1%
3.6%
5.9%
13.9%
17.5%
2.2%
3.9%
8.0%
12.6%
1.2%
2.4%
-6.4%
-3.3%
As a % of Revenues
Software Licenses
Consulting
Maintenance
Cost of Revenue
Gross Margin
Software Margin
Consulting Margin
Operating Margin
R&D
Sales & Marketing
G&A
Annual Change
Total Revenues
Gross Profit
Operating Profit
EPS
Sequential Change
Total Revenues
Gross Profit
Operating profit
EPS
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 13 of 18
Henley and Company, LLC
JDA Software Balance Sheet
($ in millions)
2005
Mar
_______
ASSETS
Current assets:
Cash and equiv.
A/R
Prepaid and other
Jun
_______
Sept
_______
Dec
_______
Mar
_______
2006
Jun
Sept
_______ _______
Dec
_______
Mar
_______
2007
Jun
_______
Sept
_______
$80.8
48.1
13.2
_______
$142.1
$93.9
40.3
15.2
_______
149.3
$96.7
48.5
15.4
_______
160.6
$111.5
42.4
13.7
_______
$167.6
$118.0
43.1
13.5
_______
$174.6
$130.8
36.9
15.9
_______
183.7
$56.9
72.6
39.3
_______
168.7
$53.6
79.5
33.7
_______
$166.8
$61.1
89.4
36.1
_______
$186.7
$65.4
76.5
16.8
18.6
$177.2
$178.6
$2.8
4.9
47.3
133.6
_______
$325.9
12.1
45.5
117.3
_______
$324.2
44.0
127.7
_______
$332.3
42.8
120.1
_______
$330.6
42.0
118.0
_______
$334.6
41.1
116.3
_______
$341.1
46.1
403.9
_______
$618.7
48.4
409.6
_______
$624.7
46.0
407.6
_______
$640.2
45.1
395.3
_______
$617.6
43.8
397.7
_______
$620.1
LIABILTIES and SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$4.0
Accrued liabilities
25.6
Other
34.0
_______
Total Cur. Liab.
$63.6
3.1
18.6
30.8
_______
52.5
1.8
19.2
34.6
_______
55.7
$1.8
18.7
28.2
_______
$48.6
$1.8
16.2
32.9
_______
$50.9
1.5
19.1
34.3
_______
54.9
$3.1
47.4
72.8
_______
123.3
$4.8
47.2
73.7
_______
$125.7
$5.9
45.3
92.0
_______
$143.1
$5.1
45.4
90.2
_______
$140.7
$3.7
45.3
83.8
_______
$132.8
$139.8
17.1
12.0
_______
168.8
$137.8
$20.9
$126.4
$23.5
$102.8
$16.7
_______
158.7
_______
149.8
_______
119.5
$98.3
$12.8
$3.5
_______
114.5
292.1
284.4
293.0
260.3
247.3
Tot. Cur. Assets
Investments
Deferred Expenses
PPE
Intangible assets, net
Total Assets
Non Current Liabilities:
Long Term Debt, net
Accrued Expenses noncurrent, net
Other
_______
_______
_______
_______
_______
_______
$63.6
52.5
55.7
$48.6
$50.9
54.9
Total NonCur. Liab
Total Liabilities
Temporary Equity
Stockholders' equity
Preferred stock
Common stock
Additional paid-in capital
Deferred stock-based compensation
Accumulated other comprehensive loss
Retained earnings (deficit)
Total Stockholders' Equity
Total Liab. and
Stkhldrs' Equity
Age of A/R, days --gross
50
50
50
82.6
70.3
25.7
50
50.0
271.0
_______
$334.7
271.7
_______
$324.2
276.7
_______
$332.3
282.0
_______
$330.6
62
283.7
_______
$334.6
286.2
_______
$341.1
64
326.6
_______
$618.7
73
340.4
_______
$624.7
81
347.3
_______
$640.2
357.4
_______
$617.6
89
76
372.8
_______
$620.1
68
Source: Company reports
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 14 of 18
JDA Executive Team
Executives
Hamish Brewer, CEO
Promoted in August 2003 to current position responsible for overseeing all aspects of JDA and developing
company strategy. The Company’s Chief Operating Officer and Executive Vice President/CFO report
directly to Brewer.
Prior positions include President from 2001 to 2003; Senior Vice President, Worldwide Sales from 2000 to
2001; Senior Vice President, Enterprise Systems, from 1999 to 2000; Senior Vice President, International,
from 1998 to 1999; and Vice President, Europe, Middle East & Africa Operations from 1996 to 1998.
Joined JDA’s UK office as an account manager in 1994 with a focus on sales and marketing.
Prior to JDA, worked for eight years at IBM as a retail specialist in sales and marketing. Also worked at a
retailer in England with responsibilities for operations, information management, and stock control.
Education: B.Sc. in Production Engineering and a B.Com. in Economics from the University of Birmingham, UK.
Kristen L. Magnuson, Executive Vice President and Chief Financial Officer
Joined JDA in 1997 as CFO with more than 20 years financial management experience.
Promoted in March 2001 to EVP overseeing JDA’s finance, investor relations, legal, accounting, IT and
human resources departments.
Prior to JDA, spent seven years as Vice President of Finance and Planning for Michaels Stores, Inc.
Successfully completed four public offerings, negotiated five acquisitions and several capital transactions.
Responsible for investor relations, banking relations, strategic planning and long range financial forecasting.
Other previous positions include Senior Vice President and Controller for an $8 billion financial institution
and Principal in the audit department at Ernst & Young. Gained experience in mergers and acquisitions and several industries including,
software and services.
Education: B.B.A. from University of Washington; Certified Public Accountant.
Chris Koziol, Chief Operating Officer
Joined JDA in 2005 to assume the newly created Chief Operating Officer position, bringing with him more
than 23 years of leadership in technology industry organizations.
Prior to JDA, spent 16 years with MicroAge, Inc., culminating to the position of President and Chief
Operating Officer. Participating in MicroAge’s growth from a privately held organization to a $6 billion
NASDAQ company.
Served as president of MicroAge Technology Services where he managed a $1.8 billion P&L, as well as led
the company’s $5 billion Pinacor distribution subsidiary.
Education: Graduate of the Harvard Business School Program for Management Development. B.S. in Business Administration (Marketing),
University of Arizona, Tucson, AZ.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 15 of 18
Senior Management Team
Philip Boland, Senior Vice President, Worldwide Consulting Services
Responsible for leading JDA’S global customer solutions and consulting services organization.
Previously served as Regional Vice President of Customer Solutions and Services; Asia Pacific; Vice
President of Consulting Services, Asia Pacific from 1999 to 2005; Director of Consulting Services, Asia
Pacific 1998 to 1999 Joined JDA in 1996 as Country Manager, Australia and New Zealand as part of JDA’s
entry into that market.
Prior to JDA was a Principal Consultant for the Retail Industry IT practice at Price Waterhouse, Australia.
Before returning to Australia served as Vice President Development and Professional Services for Uniquest
Inc (formerly PRJ& a global supplier of retail application solutions and implementation services) in the US. At PRJ& also served as
Managing Director PRJ& Europe and Director of Consulting US Eastern Region. Previously spent 10 years with Myer, Australia’s largest
retailer, and held management positions in Buying, Sales and IT.
Education: B.A. (Economics) University of Melbourne, Post Graduate Diploma (Marketing) David Syme Business School, Caulfield
Institute of Technology.
Tom Dziersk, Senior Vice President, Americas
Joined JDA in August 2006 to assume the Senior Vice President, Americas position, bringing with him over
20 years of experience in the retail and supply chain enterprise software market.
Prior to JDA, spent five years as President and Chief Executive Officer for ClearOrbit, Inc. Successfully rebranded and re-positioned the company, as well as its product and services offerings.
Other previous positions include a variety of senior management as well as sales and marketing positions at
several emerging technology companies, including Essentus International, Inc. (formerly Richter Systems)
and JBA International, Inc (a major ERP software provider).
Education: B.A. in Economics with a minor in Computer Science, University of Michigan.
Wayne Usie, Senior Vice President, Retail
Transitioned into the Senior Vice President, Retail position in July 2006 to assume responsibility for
strengthening executive level relationships with JDA’s retail customers and key prospects.
Assumed Senior Vice President, Americas position in January 2003 to bring his in-depth understanding of
JDA Portfolio and demand chain requirements to lead the development of customers in JDA’s largest
region. All associates in sales and services in the Americas report to Usie.
Joined JDA in January 2001. During his tenure, led the research and product development organization
through a great deal of change and growth, including the launch of JDA Portfolio 2003.
Previously served as Vice President of IT at multi-billion dollar Family Dollar Stores, Inc. Led the implementation and management of a
number of large packaged systems, including Oracle and Retek, and internally developed applications, to support over 4,000 retail locations
and six distribution centers. Also worked in executive positions for a regional retailer and a consulting firm.
Education: B.S. in Business Administration, Louisiana State University, Baton Rouge, LA.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 16 of 18
Market Making and Investment Banking Disclosures
At the time this report was published, Henley and Company, LLC did not make a market in JDA
Software, Inc. (JDAS), or any other company mentioned in this report.
Stock Rating System
Henley and Company’s stock rating system is designed to reflect the type of investment
decisions customers make on a regular basis. The language of the rating system used is a
specific action Henley and Company would take in regard to the specific stocks we cover.
Below, are an overview and an explanation of each of the types of recommendations Henley and
Company would assign to stocks covered. Please understand that the rating system and the
assigned definitions are predicated purely based on the total return of the individual stock in
absolute dollar terms and not based on a relative value to a specific index or industry group.
Henley & Company’s Stock Rating System
Buy: Indicates stocks we believe have a market capitalization that is comparably undervalued to
its market peers and offers a greater relative performance to the market. We believe stocks in this
category offer excellent risk reward potential and we recommend purchase based on its current
relative value. Note, as with all equities there is always downside risk.
Speculative Buy: Indicates stocks we believe should be purchased based on its growth potential
and long term outlook of its industry. We believe stocks in this category offer excellent reward
potential but have a greater specific investment risk and are subject to greater volatility then our
normal buy recommendation.
Neutral: Indicates stocks we will not advocate a buy or sell recommendation based on current
conditions.
Under-Perform: Indicates stocks we believe are currently fairly valued and offer limited upside
reward relative to its specific investment risk.
Sell: Indicates stocks we believe are currently overvalued relative to its market peers, and/or is
experiencing major operational challenges. We believe stocks in this category should be avoided
and the specific investment risk outweighs any potential reward.
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 17 of 18
Further Disclosures
The information and statistical data contained herein have been obtained from sources, which we
believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do
no undertake to advise you as to changes in figures or our views. This is not a solicitation of any
order to buy or sell. Henley and Company is fully disclosed with its clearing firm, Pershing LLC,
is not a market maker and does not sell to or buy from customers on a principle basis. The above
statement is the opinion of Henley and Company and is not a guarantee that the price target for
the stock will be met or that the predicted business results of the company will occur. There may
be situations when fundamentals, technically, and quantitative opinions are not met. We, our
affiliates, any officer, director or stockholder or any other member of their family may from time
to time purchase or sell any of the above mentioned or related securities. Analyst or members of
the Research Department are prohibited from buying or selling securities issued by the
companies that Henley and Company has a research relationship with, except if ownership of
such securities was prior to the start of such relationship, then the analyst or member of the
research Department may sell such securities after obtaining expressed written permission from
the Director of Research. All research issued by Henley and Company is based on public
information. Henley and Company does not currently have an Investment Banking relationship,
and was not a manager or co-manager of any offering for the company within the last three
years..
I, Alan Weinfeld, the research analyst of this report, hereby certify that the views
expressed in this report accurately reflect my personal views about the subject securities
and issues, and that no part of my compensation was, is, or will be directly or indirectly
related to the specific recommendation or views contained in the report
Henley & Company LLC · 1290 Reckson Plaza ·
Toll Free 800-753-8688 · Phone 516-794-5520 ·
Uniondale, NY 11556
Fax 516-794-6207
Page 18 of 18