Manhattan Associates (MANH) 8-K Manhattan Associates Reports Strong Second Quarter Earnings Per Share Company posts Q2 Total Revenue of $77.6 Million, a 33% Increase over Q2 2009

Exhibit 99.1

For Immediate Release

Contact:	Dennis Story	Terrie O’Hanlon
	Chief Financial Officer	Chief Marketing Officer
	Manhattan Associates, Inc.	Manhattan Associates, Inc.
	678-597-7115	678-597-7120
	dstory@manh.com	tohanlon@manh.com

Manhattan Associates Reports Strong Second Quarter Earnings Per Share
Company posts Q2 Total Revenue of $77.6 Million, a 33% Increase over Q2 2009

ATLANTA – July 20, 2010 –Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported second quarter 2010 non-GAAP adjusted diluted earnings per share of $0.38 compared to $0.14 in the second quarter of 2009, on license revenue of $15.5 million and total revenue of $77.6 million. GAAP diluted earnings per share was $0.36 compared to a GAAP loss per share of $0.02 in the prior year second quarter.

Manhattan Associates President and CEO Pete Sinisgalli commented, “We are pleased with our second quarter and first half 2010 financial results and our strengthening competitive position in the supply chain optimization market. Our continued investment in platform-based solution efficiencies and innovation is paying dividends both in terms of sales momentum and customer satisfaction. “

SECOND QUARTER 2010 FINANCIAL SUMMARY:

• Adjusted diluted earnings per share, a non-GAAP measure, was $0.38 in the second quarter of 2010, compared to $0.14 in the second quarter of 2009.

• The Company reported GAAP diluted earnings per share of $0.36, compared to a GAAP loss per share of $0.02 in the second quarter of 2009.

• Consolidated revenue for the second quarter of 2010 was $77.6 million, compared to $58.4 million in the second quarter of 2009. License revenue was $15.5 million in the second quarter of 2010, compared to $4.1 million in the second quarter of 2009.

• Adjusted operating income, a non-GAAP measure, was $12.8 million in the second quarter of 2010, compared to $5.2 million in the second quarter of 2009.

• GAAP operating income for the second quarter of 2010 was $12.0 million, compared to an operating loss of $0.4 million in the second quarter of 2009. Operating income for the

	second quarter of 2010 includes $0.8 million of recoveries of previously recorded state sales tax associated with expiring sales tax audit statutes, while the operating loss for the second quarter of 2009 includes a pre-tax restructuring charge of $3.8 million.
•	Cash flow from operations was $10.0 million in the second quarter of 2010, compared to $10.8 million in the second quarter of 2009. Days Sales Outstanding were 55 days at June 30, 2010, compared to 53 days at March 31, 2010.
•	Cash and investments on-hand at June 30, 2010 was $120.2 million, compared to $123.1 million at March 31, 2010.
•	The Company repurchased approximately 869,000 common shares totaling $25.0 million at an average share price of $28.77 in the second quarter of 2010, completing its $25.0 million stock repurchase program approved in April 2010. In July 2010, Manhattan’s Board of Directors approved the repurchase of up to an additional $25.0 million of Manhattan Associates outstanding common stock.

SIX MONTH 2010 FINANCIAL SUMMARY:

• Adjusted diluted earnings per share, a non-GAAP measure, was $0.74 for the six months ended June 30, 2010, compared to $0.22 for the six months ended June 30, 2009.

• GAAP diluted earnings per share for the six months ended June 30, 2010 was $0.68, compared to a GAAP loss per share of $0.01 for the six months ended June 30, 2009.

• Consolidated revenue for the six months ended June 30, 2010 was $151.6 million, compared to $119.2 million for the six months ended June 30, 2009. License revenue was $29.7 million for the six months ended June 30, 2010, compared to $9.0 million in the six months ended June 30, 2009.

• Adjusted operating income, a non-GAAP measure, was $25.6 million for the six months ended June 30, 2010, compared to $8.0 million for the six months ended June 30, 2009.

• GAAP operating income was $23.5 million for the six months ended June 30, 2010, compared to $0.2 million for the six months ended June 30, 2009, which included a restructuring charge of $3.9 million. The first half of 2010 operating income includes $1.2 million of recoveries of previously expensed sales tax associated with expiring sales tax audit statutes.

• For the six months ended June 30, 2010, the Company repurchased approximately 1.5 million common shares under the share repurchase program authorized by the Board of Directors at an average share price of $27.33, for a total investment of $40.0 million.

SALES ACHIEVEMENTS:

•	Recognized two contracts of $1.0 million or more in license revenue during the quarter.
•	Completed software license wins with new customers such as Aluminium Specialities Group, Associated Hygienic Products LLC, Cotton on Group Services, Guangdong Xin Yang Logistics Equipment, Guangzhou Fengshen Logistics Co., HVHC, Inc.,
	Osotspa Co., Pickwick SAS, Qingdao Haier Logistics Co., The C.D. Hartnett Company and The Chamberlain Group, Inc.
•	Expanded partnerships with existing customers such as 3 Suisses International, A.N. Deringer, Inc., Avon Products, Inc., Benjamin Moore & Co., Challenger Motor Freight, Inc., Chanel (Australia) Pty Ltd, Converse, Inc., Devil-Dog Mfg. Co., Dick’s Sporting Goods, Inc., EXE c&t Co., Exel, Inc., McKesson Corporation, MTD Products, Inc., Panalpina Management AG, Phillips-Van Heusen Corporation, Southern Wine & Spirits of America, Speed Transportation, The Harvard Drug Group LLC.

CONFERENCE CALL

The Company’s conference call regarding its second quarter financial results will be held at 4:30 p.m. Eastern Time on Tuesday, July 20, 2010. Investors are invited to listen to a live webcast of the conference call through the investor relations section of Manhattan Associates’ website at www.manh.com. To listen to the live webcast, please go to www.manh.com at least 15 minutes before the call to download and install any necessary audio software. For those who cannot listen to the content live, a replay can be accessed shortly after the call by dialing +1.800.642.1687 in the U.S. and Canada, or +1.706.645.9291 outside the U.S., and entering the conference identification number 83562530, or via the Web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet replay will be available until Manhattan Associates’ third quarter 2010 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income, adjusted net income and adjusted earnings per share in this press release as additional information regarding the Company’s operating

results. These measures are not in accordance with – or an alternative for – GAAP, and may be different from non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share measures used by other companies. The Company believes that the presentation of these non-GAAP financial measures facilitates investors’ understanding of its historical operating trends, because it provides important supplemental measurement information in evaluating the operating results of its business, as distinct from results that include items that are not indicative of ongoing operating results. The Company consequently believes that the presentation of these non-GAAP financial measures provides investors with useful insight into its profitability. This release should be read in conjunction with its Form 8-K earnings release filing for the quarter ended June 30, 2010.

The non-GAAP adjusted operating income, adjusted net income and adjusted earnings per share measures exclude the impact of acquisition-related costs and the amortization thereof, the recapture of previously recognized sales tax expense, stock option expense, and restructuring charges — all net of income tax effects and unusual tax adjustments. A reconciliation of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES, INC.

Manhattan Associates continues to deliver on its 20-year heritage of providing global supply chain excellence to more than 1,200 customers worldwide that consider supply chain optimization core to their strategic market leadership. The Company’s supply chain innovations include: Manhattan SCOPE®, a portfolio of software solutions and technology that leverages a Supply Chain Process Platform to help organizations optimize their supply chains from planning through execution; Manhattan SCALE™, a portfolio of distribution management and transportation management solutions built on Microsoft .NET technology; and Manhattan Carrier™, a suite of supply chain solutions specifically addressing the needs of the motor carrier industry. For more information, please visitwww.manh.com.

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Forward-looking statements contained in this press release include, among other statements, any statements expressing general optimism about the Company’s prospects for the balance of the fiscal year. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the global economic downturn; disruptions in credit markets; delays in product development;

competitive pressures; software errors; and additional risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

###

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

	Three Months Ended June 30,					Six Months Ended June 30,
	2010		2009			2010			2009
	(unaudited)					(unaudited)
Revenue:
Software license	$	15,485	$	4,126		$	29,692		$	9,048
Services		54,780		49,422			108,241			100,265
Hardware and other		7,376		4,861			13,657			9,921
Total revenue		77,641		58,409			151,590			119,234
Costs and expenses:
Cost of license		1,611		1,035			3,160			2,459
Cost of services		24,906		21,319			48,970			44,476
Cost of hardware and other		6,205		4,177			11,274			8,298
Research and development		10,334		9,188			20,774			19,415
Sales and marketing		12,073		9,026			22,541			19,105
General and administrative		8,177		7,251			16,638			15,213
Depreciation and amortization		2,318		3,010			4,733			6,175
Restructuring charge		—		3,829			—			3,892
Total costs and expenses		65,624		58,835			128,090			119,033
Operating income (loss)		12,017		(426	)		23,500			201
Other income (expense), net		304		(404	)		(194	)		(637	)
Income (loss) before income taxes		12,321		(830	)		23,306			(436	)
Income tax provision (benefit)		4,132		(274	)		7,922			(142	)
Net income (loss)	$	8,189	$	(556	)	$	15,384		$	(294	)
Basic earnings (loss) per share	$	0.38	$	(0.02	)	$	0.70		$	(0.01	)
Diluted earnings (loss) per share	$	0.36	$	(0.02	)	$	0.68		$	(0.01	)
Weighted average number of shares:
Basic		21,718		22,391			21,837			22,687
Diluted		22,776		22,391			22,655			22,687

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES
(in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Operating income (loss)	$	12,017		$	(426	)	$	23,500		$	201
Stock option expense(a)		901			1,010			2,079			2,410
Purchase amortization(b)		639			741			1,277			1,482
Restructuring charge(c)		—			3,829			—			3,892
Sales tax recoveries(d)		(792	)		—			(1,212	)		—
										��
Adjusted operating income (Non-GAAP)	$	12,765		$	5,154		$	25,644		$	7,985
Income tax provision (benefit)	$	4,132		$	(274	)	$	7,922		$	(142	)
Stock option expense(a)		311			314			717			783
Purchase amortization(b)		221			234			441			482
Restructuring charge(c)		—			1,244			—			1,265
Sales tax recoveries(d)		(273	)		—			(418	)		—
Unusual tax adjustments(e)		118			—			118			—
Adjusted income tax provision (Non-GAAP)	$	4,509		$	1,518		$	8,780		$	2,388
Net income (loss)	$	8,189		$	(556	)	$	15,384		$	(294	)
Stock option expense(a)		590			696			1,362			1,627
Purchase amortization(b)		418			507			836			1,000
Restructuring charge(c)		—			2,585			—			2,627
Sales tax recoveries(d)		(519	)		—			(794	)		—
Unusual tax adjustments(e)		(118	)		—			(118	)		—
Adjusted net income (Non-GAAP)	$	8,560		$	3,232		$	16,670		$	4,960
Diluted earnings (loss) per share	$	0.36		$	(0.02	)	$	0.68		$	(0.01	)
Stock option expense(a)		0.03			0.03			0.06			0.07
Purchase amortization(b)		0.02			0.02			0.04			0.04
Restructuring charge(c)		—			0.12			—			0.12
Sales tax recoveries(d)		(0.02	)		—			(0.04	)		—
Unusual tax adjustments(e)		(0.01	)		—			(0.01	)		—
Adjusted diluted EPS (Non-GAAP)	$	0.38		$	0.14		$	0.74		$	0.22
Fully diluted shares		22,776			22,391			22,655			22,687
Effect of common stock equivalents(f)		—			53			—			44
Adjusted fully diluted shares (Non-GAAP)		22,776			22,444			22,655			22,731

(a) Because stock option expense is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control, the impact of such expense is not subject to effective management by us. Thus, we have excluded the impact of this expense from adjusted non-GAAP results. The stock option expense is included in the following GAAP operating expense lines for the three and six months ended June 30, 2010 and 2009:

	Three Months Ended June 30,					Six Months Ended June 30,
	2010		2009			2010		2009
Cost of services	$	129	$	188		$	268	$	321
Research and development		156		258			322		471
Sales and marketing		296		(42	)		616		405
General and administrative		320		606			873		1,213
Total stock option expense	$	901	$	1,010		$	2,079	$	2,410

(b)	Adjustments represent purchased intangibles amortization from prior acquisitions. Such amortization is commonly excluded from GAAP net income by companies in our industry and we therefore exclude these amortization costs to provide more relevant and meaningful comparisons of our operating results to that of our competitors.
(c)	During the quarter ended June 30, 2009, we committed to and initiated plans to reduce our workforce by approximately 140 positions to realign our capacity based on the revised revenue outlook for 2009. As a result of this initiative, we recorded a restructuring charge of approximately $3.8 million in the second quarter of 2009. The restructuring charge primarily consisted of employee severance and outplacement services. We also recorded additional employee severance expense of $63,000 in the first quarter of 2009 related to the restructuring action taken in the fourth quarter of 2008. We do not believe that the restructuring charge is a common cost that resulted from normal operating activities. Consequently, we have excluded this charge from adjusted non-GAAP results.
(d)	Adjustment represents recoveries of previously recorded state sales tax resulting primarily from the expiration of the sales tax audit statutes in certain states. Because we have recognized the full potential amount of the sales tax expense in prior periods, any recovery of that expense resulting from the expiration of the statutes or the collection of tax from our customers would overstate the current period net income derived from our core operations as the recovery is not a result of any event occurring within our control during the current period. Thus, we have excluded these recoveries from adjusted non-GAAP results.
(e)	The adjustment represents tax benefit from the disqualifying dispositions of incentive stock options that were previously expensed. As discussed above, we excluded stock option expense from adjusted non-GAAP results because it is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control. Therefore, we also excluded the related tax benefit generated upon their disposition.
(f)	All common stock equivalents were anti-dilutive for GAAP for the three and six months ended June 30, 2009 because we recorded a net loss. Adjustment represents common equivalent shares for these periods using the treasury stock method to properly present diluted shares for our adjusted net income.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	June 30, 2010			December 31, 2009
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	117,663		$	120,217
Accounts receivable, net of allowance of $6,379 and $4,943 in 2010 and 2009, respectively		46,747			37,945
Deferred income taxes		5,793			5,745
Income taxes receivable		1,038			—
Prepaid expenses and other current assets		5,573			4,847
Total current assets		176,814			168,754
Property and equipment, net		14,951			15,759
Long-term investments		2,532			2,797
Goodwill, net		62,251			62,280
Acquisition-related intangible assets, net		2,196			3,473
Deferred income taxes		9,831			9,826
Other assets		2,165			1,822
Total assets	$	270,740		$	264,711
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,747		$	4,434
Accrued compensation and benefits		17,552			12,855
Accrued and other liabilities		15,094			15,430
Deferred revenue		38,632			37,436
Income taxes payable		—			796
Total current liabilities		79,025			70,951
Other non-current liabilities		10,422			10,395
Shareholders’ equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2010 or 2009		—			—
Common stock, $.01 par value; 100,000,000 shares authorized; 22,167,568 and 22,467,123 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively		222			225
Additional paid-in capital		—			2,892
Retained earnings		183,412			182,387
Accumulated other comprehensive loss		(2,341	)		(2,139	)
Total shareholders’ equity		181,293			183,365
Total liabilities and shareholders’ equity	$	270,740		$	264,711

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Six Months Ended
	2010			2009
	(unaudited)
Operating activities:
Net income (loss)	$	15,384		$	(294	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		4,733			6,175
Stock compensation		5,087			4,018
Loss on disposal of equipment		(6	)		12
Tax benefit (deficiency) of stock awards exercised/vested		1,237			(1,088	)
Excess tax benefits from stock based compensation		(342	)		(9	)
Deferred income taxes		(25	)		386
Unrealized foreign currency loss		24			723
Changes in operating assets and liabilities:
Accounts receivable, net		(9,299	)		25,082
Other assets		(1,122	)		2,342
Accounts payable, accrued and other liabilities		8,285			(9,872	)
Income taxes		(1,837	)		(2,944	)
Deferred revenue		1,743			(986	)
Net cash provided by operating activities		23,862			23,545
Investing activities:
Purchase of property and equipment		(2,706	)		(1,360	)
Net maturies of investments		98			80
Net cash used in investing activities		(2,608	)		(1,280	)
Financing activities:
Purchase of common stock		(41,022	)		(20,540	)
Proceeds from issuance of common stock from options exercised		17,445			544
Excess tax benefits from stock based compensation		342			9
Net cash used in financing activities		(23,235	)		(19,987	)
Foreign currency impact on cash		(573	)		(49	)
Net change in cash and cash equivalents		(2,554	)		2,229
Cash and cash equivalents at beginning of period		120,217			85,739
Cash and cash equivalents at end of period	$	117,663		$	87,968

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1. GAAP and Adjusted Earnings per share by quarter are as follows:

	2009													2010
	1st Qtr		2nd Qtr			3rd Qtr			4th Qtr		Full Year			1st Qtr			2nd Qtr			YTD
GAAP Diluted EPS	$	0.01	$	(0.02	)	$	0.50		$	0.26	$	0.73		$	0.32		$	0.36		$	0.68
Adjustments to GAAP:
Stock option expense		0.04		0.03			0.04			0.04		0.15			0.03			0.03			0.06
Purchase amortization		0.02		0.02			0.02			0.02		0.09			0.02			0.02			0.04
Restructuring charge		—		0.12			—			—		0.11			—			—			—
Sales tax recoveries		—		—			—			—		—			(0.01	)		(0.02	)		(0.04	)
Unusual tax adjustments		—		—			(0.12	)		—		(0.12	)		—			(0.01	)		(0.01	)
Adjusted Diluted EPS	$	0.07	$	0.14		$	0.43		$	0.31	$	0.96		$	0.36		$	0.38		$	0.74

2.  Revenues and operating income (loss) by reportable segment are as follows (in thousands):

	2009														2010
	1st Qtr			2nd Qtr			3rd Qtr		4th Qtr			Full Year			1st Qtr			2nd Qtr			YTD
Revenue:
Americas	$	50,827		$	47,372		$	55,626	$	52,733		$	206,558		$	61,889		$	64,875		$	126,764
EMEA		7,030			7,818			6,527		6,650			28,025			7,989			8,587			16,576
APAC		2,968			3,219			3,141		2,756			12,084			4,071			4,179			8,250
	$	60,825		$	58,409		$	65,294	$	62,139		$	246,667		$	73,949		$	77,641		$	151,590
GAAP Operating Income (Loss):
Americas	$	260		$	(407	)	$	10,736	$	10,859		$	21,448		$	10,333		$	9,836		$	20,169
EMEA		738			1,124			20		(789	)		1,093			418			1,530			1,948
APAC		(371	)		(1,143	)		299		(184	)		(1,399	)		732			651			1,383
	$	627		$	(426	)	$	11,055	$	9,886		$	21,142		$	11,483		$	12,017		$	23,500
Adjustments (pre-tax):
Americas:
Stock option expense	$	1,400		$	1,010		$	1,369	$	1,374		$	5,153		$	1,178		$	901		$	2,079
Purchase amortization		741			741			741		741			2,964			638			639			1,277
Restructuring charge		59			2,960			—		—			3,019			—			—			—
Sales tax recoveries		—			—			—		—			—			(420	)		(792	)		(1,212	)
	$	2,200		$	4,711		$	2,110	$	2,115		$	11,136		$	1,396		$	748		$	2,144
EMEA:
Restructuring charge		—			20			—		—		$	20			—			—			—
	$	—		$	20		$	—	$	—		$	20		$	—		$	—		$	—
APAC:
Restructuring charge		4			849			—		(10	)	$	843			—			—			—
	$	4		$	849		$	—	$	(10	)	$	843		$	—		$	—		$	—
Total Adjustments	$	2,204		$	5,580		$	2,110	$	2,105		$	11,999		$	1,396		$	748		$	2,144
Adjusted non-GAAP Operating Income (Loss):
Americas	$	2,460		$	4,304		$	12,846	$	12,974		$	32,584		$	11,729		$	10,584		$	22,313
EMEA		738			1,144			20		(789	)		1,113			418			1,530			1,948
APAC		(367	)		(294	)		299		(194	)		(556	)		732			651			1,383
	$	2,831		$	5,154		$	13,165	$	11,991		$	33,141		$	12,879		$	12,765		$	25,644

3. Our services revenue consists of fees generated from professional services and customer support and software enhancements related to our software products as follows (in thousands):

	2009										2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		YTD
Professional services	$	32,345	$	30,767	$	27,158	$	22,500	$	112,770	$	33,960	$	34,349	$	68,309
Customer support and software enhancements		18,498		18,655		19,759		20,168		77,080		19,501		20,431		39,932
Total services revenue	$	50,843	$	49,422	$	46,917	$	42,668	$	189,850	$	53,461	$	54,780	$	108,241

4. Hardware and other revenue includes the following items (in thousands):

	2009										2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		YTD
Hardware revenue	$	3,080	$	2,992	$	5,086	$	3,474	$	14,632	$	4,518	$	5,053	$	9,571
Billed travel		1,980		1,869		1,931		1,719		7,499		1,763		2,323		4,086
Total hardware and other revenue	$	5,060	$	4,861	$	7,017	$	5,193	$	22,131	$	6,281	$	7,376	$	13,657

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

5.	Impact of Currency Fluctuation
	The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):

	2009															2010
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Full Year			1st Qtr			2nd Qtr			YTD
Revenue	$	(2,387	)	$	(1,996	)	$	(764	)	$	876		$	(4,271	)	$	1,053		$	(72	)	$	981
Costs and expenses		(3,307	)		(2,560	)		(1,286	)		1,205			(5,948	)		1,346			235			1,581
Operating income		920			564			522			(329	)		1,677			(293	)		(307	)		(600	)
Foreign currency gains (losses) in other income		(366	)		(506	)		294			(427	)		(1,005	)		(415	)		187			(228	)
	$	554		$	58		$	816		$	(756	)	$	672		$	(708	)	$	(120	)	$	(828	)

Manhattan Associates has a large research and development center in Bangalore, India. The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):

	2009													2010
	1st Qtr		2nd Qtr			3rd Qtr		4th Qtr			Full Year			1st Qtr			2nd Qtr			YTD
Operating income	$	1,129	$	800		$	458		(249	)	$	2,138		$	(395	)	$	(340	)	$	(735	)
Foreign currency gains (losses) in other income		336		(367	)		2		(276	)		(305	)		(289	)		245			(44	)
Total impact of changes in the Indian Rupee	$	1,465	$	433		$	460	$	(525	)	$	1,833		$	(684	)	$	(95	)	$	(779	)

6.  Other income (expense) includes the following components (in thousands):

	2009															2010
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Full Year			1st Qtr			2nd Qtr		YTD
Interest income	$	137		$	95		$	71		$	65		$	368		$	80		$	109	$	189
Foreign currency gains (losses)		(366	)		(506	)		294			(427	)		(1,005	)		(415	)		187		(228	)
Other non-operating (expense) income		(4	)		7			(110	)		(12	)		(119	)		(163	)		8		(155	)
Total other income (expense)	$	(233	)	$	(404	)	$	255		$	(374	)	$	(756	)	$	(498	)	$	304	$	(194	)

7. Capital expenditures are as follows (in thousands):

	2009										2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		YTD
Capital expenditures	$	873	$	487	$	366	$	652	$	2,378	$	1,177	$	1,529	$	2,706

8.	Stock Repurchase Activity
	During 2010, under the share repurchase program authorized by the Board of Directors, we repurchased approximately 1.5 million shares of common stock totaling $40.0 million at an average price of $27.33. In 2009, we repurchased approximately 1.4 million shares of common stock totaling $22.8 million at an average price of $16.63.
9.	Effective Tax Rate Reconciliation for GAAP and Adjusted Results (in thousands except tax rate and per share data):

	Three Months Ended June 30, 2010												Six Months Ended June 30, 2010
	Income before		Income tax			Net		Diluted		Effective			Income before		Income tax			Net		Diluted		Effective
	income taxes		provision			income		EPS		Tax Rate			income taxes		provision			Net income		EPS		Tax Rate
GAAP results before tax adjustments	$	12,321	$	4,250		$	8,071	$	0.35		34.5	%	$	23,306	$	8,040		$	15,266	$	0.67		34.5	%
Unusual tax adjustments(a)		—		(118	)		118		0.01					—		(118	)		118		0.01
GAAP results- reported	$	12,321	$	4,132		$	8,189	$	0.36		33.5	%	$	23,306	$	7,922		$	15,384	$	0.68		34.0	%

^(a) The adjustment represents a tax benefit from disqualifying dispositions of incentive stock options that were previously expensed.