Manhattan Associates (MANH) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Contact: Dennis Story
Chief Financial Officer
Manhattan Associates, Inc.
678-597-7115
dstory@manh.com Will Haraway
Senior Manager, Media Relations
Manhattan Associates, Inc.
678-597-7466
wharaway@manh.com

Manhattan Associates Reports Fourth Quarter and Full Year
2010 Revenue and Earnings

Q4 Total Revenue of $71.5 Million is up 15% over Q4 2009

ATLANTA — February 1, 2011 —Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported fourth quarter 2010 non-GAAP adjusted diluted earnings per share of $0.32 compared to $0.31 in the 2009 fourth quarter, and GAAP diluted earnings per share of $0.29 compared to $0.26 in the prior year fourth quarter. The Company posted total fourth quarter revenue of $71.5 million, an increase of 15% from overall revenue posted in the fourth quarter of 2009.

For the year ended December 31, 2010, non-GAAP adjusted diluted earnings per share of $1.38 compared to $0.96 for the full year 2009, and record GAAP diluted earnings per share of $1.25 compared to $0.73 in the prior year. For the twelve months ended December 31, 2010, the Company posted total revenue of $297.1 million, an increase of 20%, compared to 2009 full year revenue.

Manhattan Associates President and CEO Pete Sinisgalli commented, “We posted solid fourth quarter and full year financial results. We are particularly pleased with our market’s acceptance of our latest Supply Chain Optimization solutions and remain quite optimistic about our ability to deliver meaningful value to customers and shareholders.”

FOURTH QUARTER 2010 FINANCIAL SUMMARY:

• Adjusted diluted earnings per share, a non-GAAP measure, was $0.32 in the fourth quarter of 2010, compared to $0.31 in the fourth quarter of 2009.

• The Company reported GAAP diluted earnings per share of $0.29 in the fourth quarter of 2010, compared to $0.26 in the fourth quarter of 2009.

• Consolidated revenue for the fourth quarter of 2010 was $71.5 million, compared to $62.1 million in the fourth quarter of 2009. License revenue was $12.7 million in the fourth quarter of 2010, compared to $14.3 million in the fourth quarter of 2009.

• Adjusted operating income, a non-GAAP measure, was $10.1 million in the fourth quarter of 2010, compared to $12.0 million in the fourth quarter of 2009.

• GAAP operating income for the fourth quarter of 2010 was $8.8 million, compared to $9.9 million in the fourth quarter of 2009.

• Cash flow from operations was $14.6 million in the fourth quarter of 2010, compared to $19.4 million in the fourth quarter of 2009. Days Sales Outstanding were 61 days at December 31, 2010, compared to 60 days at September 30, 2010.

• Cash and investments on-hand at December 31, 2010 was $126.9 million, compared to $116.7 million at September 30, 2010.

• The Company repurchased approximately 680,000 common shares under the share repurchase program authorized by the Board of Directors, totaling $21.0 million at an average share price of $30.92 in the fourth quarter of 2010. In January 2011, Manhattan’s Board of Directors approved raising the Company’s share repurchase authority for Manhattan Associates common stock to a total of $50 million.

FULL YEAR FINANCIAL SUMMARY:

• Adjusted diluted earnings per share, a non-GAAP measure, was $1.38 for the twelve months ended December 31, 2010, compared to $0.96 for the twelve months ended December 31, 2009.

• GAAP diluted earnings per share for the twelve months ended December 31, 2010 was a record $1.25, compared to $0.73 for the twelve months ended December 31, 2009.

• Consolidated revenue for the full year of 2010 was $297.1 million, compared to $246.7 million for the year ended December 31, 2009. License revenue was $54.5 million for the twelve months ended December 31, 2010, compared to $34.7 million in the twelve months ended December 31, 2009.

• Adjusted operating income, a non-GAAP measure, was $46.8 million for the twelve months ended December 31, 2010, compared to $33.1 million for the twelve months ended December 31, 2009.

• GAAP operating income was $41.9 million for the twelve months ended December 31, 2010, which includes $1.2 million of recoveries of previously expensed sales tax associated with expiring sales tax audit statutes, compared to $21.1 million for the twelve months ended December 31, 2009, which includes restructuring charges of $3.9 million associated with the workforce reduction executed in the second quarter of 2009.

• For the twelve months ended December 31, 2010, the Company repurchased approximately 2.7 million common shares at an average share price of $28.15, for a total investment of $76.5 million.

SALES ACHIEVEMENTS:

• Closing one contract of $1.0 million or more in recognized license revenue during the quarter.

• Completing software license wins with new customers such as: Axstores AB; Baoxiniao Group Co.; Chanel (China) Co.; Five Below, Inc.; Itochu Logistics China Co.; Factory Motor Parts; Kane Warehousing, Inc.; Mitsubishi Fuso Truck and Bus Company; Lam Soon Edible Oils; Mitsubishi Motors; Oatey Co.; Petro LLC; Shanghai KW Logistics Co.; Total Sweeteners, Inc.; VIP Shop; and YiFeng Super Drugstore.

• Expanding partnerships with existing customers such as: 3 Suisses International; AAA Cooper Transportation, Inc.; adidas AG; Brown Shoe Company, Inc.; C&J Clark America, Inc, Chico’s Retail Services, Inc., Cornerstone Brands, Inc., Costa’s PTY; Fasteners for Retail; Dick’s Sporting Goods; Excell Home Fashions Inc.; Guitar Center; Innotrac Corporation; Jasco Products Company LLC; Lamps Plus, Inc.; Mulberry Group; Northern Safety Co., Inc.; Olympus Corporation of the Americas; O’Reilly Automotive, Inc.; Panalpina Management AG; PETsMART, Inc.; RGH Enterprises, Inc.; Speed Transportation; Union Underwear Company, Inc; Unipart Logistics Limited; Vera Bradley Designs; VF Services, Inc.; and Wirtz Corporation.

2011 GUIDANCE

Manhattan Associates provided the following revenue and diluted earnings per share guidance for the full year 2011. As detailed in Note 10 in the supplemental attachments to this release, this guidance excludes restricted stock expense previously included in adjusted results.

Additionally, a full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.

	Guidance Range — 2011 Full year
	$ Range				% Growth range
Total revenue (in millions)	$	325	$	330		10	%	11	%
Diluted earnings per share:
Adjusted earnings per share — Non-GAAP		1.77		1.82		12	%	15	%
GAAP earnings per share		1.45		1.50		16	%	20	%

Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. These statements are forward-looking. Actual results may differ materially, especially in the current uncertain economic environment. These statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of this release.

Manhattan Associates will make its earnings release and published expectations available on its Web site (www.manh.com). Beginning March 16, 2011, Manhattan Associates will observe a “Quiet Period” during which Manhattan Associates and its representatives will not comment concerning previously published financial expectations. Prior to the start of the Quiet Period, the public can continue to rely on the expectations published in this 2011 Guidance section as still being Manhattan Associates’ current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. During the Quiet Period, previously published expectations should be considered historical only, speaking only as of or prior to the Quiet Period, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until the date when Manhattan Associates’ next quarterly earnings release is published, currently scheduled for the third week of April 2011.

CONFERENCE CALL

The Company’s conference call regarding its fourth quarter and full year financial results will be held at 4:30 p.m. Eastern Time on Tuesday, February 1, 2011. 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 the website at least 15 minutes before the call to download and install any necessary audio software. For those who cannot listen to the live broadcast, 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 35221052 or via the web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet broadcast will be available until Manhattan Associates’ first quarter 2011 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 December 31, 2010.

The non-GAAP adjusted operating income, adjusted net income and adjusted earnings per share 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. In addition, the Company’s forward-looking non-GAAP adjusted earnings per share included with its 2011 Guidance excludes all equity compensation expense. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.

The Company also has presented certain information excluding the effect between periods of changes in exchange rates between the U.S. dollar and the functional currencies of its foreign subsidiaries. Certain information regarding the effect of currency exchange rate fluctuation on results is included in Note 5 to the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES, INC.

Manhattan Associates continues to deliver on its 21-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 visit www.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. 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 onForm 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.

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

	Three Months Ended December 31,					Year Ended December 31,
	2010		2009			2010			2009
	(unaudited)					(unaudited)
Revenue:
Software license	$	12,666	$	14,278		$	54,450		$	34,686
Services		52,023		42,668			213,750			189,850
Hardware and other		6,824		5,193			28,917			22,131
Total revenue		71,513		62,139			297,117			246,667
Costs and expenses:
Cost of license		1,541		1,105			6,172			4,726
Cost of services		25,145		20,176			98,776			84,349
Cost of hardware and other		5,478		4,242			23,844			18,386
Research and development		9,868		8,485			40,508			36,681
Sales and marketing		9,832		8,406			42,702			36,137
General and administrative		8,668		7,271			34,027			29,946
Depreciation and amortization		2,166		2,578			9,161			11,418
Restructuring charge		—		(10	)		—			3,882
Total costs and expenses		62,698		52,253			255,190			225,525
Operating income		8,815		9,886			41,927			21,142
Other income (loss), net		239		(374	)		(143	)		(756	)
Income before income taxes		9,054		9,512			41,784			20,386
Income tax provision		2,609		3,639			13,723			3,824
Net income	$	6,445	$	5,873		$	28,061		$	16,562
Basic earnings per share	$	0.31	$	0.27		$	1.31		$	0.74
Diluted earnings per share	$	0.29	$	0.26		$	1.25		$	0.73
Weighted average number of shares:
Basic		21,078		22,128			21,497			22,385
Diluted		22,350		22,667			22,450			22,558

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

	Three Months Ended December 31,						Year Ended December 31,
	2010			2009			2010			2009
	(unaudited)						(unaudited)
Operating income	$	8,815		$	9,886		$	41,927		$	21,142
Stock option expense(a)		860			1,374			3,792			5,153
Purchase amortization(b)		439			741			2,287			2,964
Restructuring charge(c)		—			(10	)		—			3,882
Sales tax recoveries(d)		—			—			(1,212	)		—
Adjusted operating income (Non-GAAP)	$	10,114		$	11,991		$	46,794		$	33,141
Income tax provision	$	2,609		$	3,639		$	13,723		$	3,824
Stock option expense(a)		303			563			1,315			1,791
Purchase amortization(b)		155			308			793			1,030
Restructuring charge(c)		—			84			—			1,349
Sales tax recoveries(d)		(2	)		—			(420	)		—
Unusual tax adjustments(e)		80			—			209			2,770
Adjusted income tax provision (Non-GAAP)	$	3,145		$	4,594		$	15,620		$	10,764
Net income	$	6,445		$	5,873		$	28,061		$	16,562
Stock option expense(a)		557			811			2,477			3,362
Purchase amortization(b)		284			433			1,494			1,934
Restructuring charge(c)		—			(94	)		—			2,533
Sales tax recoveries(d)		2			—			(792	)		—
Unusual tax adjustments(e)		(80	)		—			(209	)		(2,770	)
Adjusted net income (Non-GAAP)	$	7,208		$	7,023		$	31,031		$	21,621
Diluted EPS	$	0.29		$	0.26		$	1.25		$	0.73
Stock option expense(a)		0.02			0.04			0.11			0.15
Purchase amortization(b)		0.01			0.02			0.07			0.09
Restructuring charge(c)		—			—			—			0.11
Sales tax recoveries(d)		—			—			(0.04	)		—
Unusual tax adjustments(e)		—			—			(0.01	)		(0.12	)
Adjusted diluted EPS (Non-GAAP)	$	0.32		$	0.31		$	1.38		$	0.96
Fully diluted shares		22,350			22,667			22,450			22,558

(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 nine months ended December 31, 2010 and 2009:

	Three Months Ended December 31,				Year Ended December 31,
	2010		2009		2010		2009
Cost of services	$	97	$	154	$	487	$	630
Research and development		112		205		571		884
Sales and marketing		276		391		1,174		1,185
General and administrative		375		624		1,560		2,454
Total stock option expense	$	860	$	1,374	$	3,792	$	5,153

(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)	For the year ended December 31, 2010, 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. For the year ended December 31, 2009, the majority of the adjustment represents release of income tax reserves resulting from expiration of tax audit statutes for U.S. federal income tax returns filed for 2005 and prior. Because we recorded the majority of the income tax reserves through retained earnings in conjunction with the adoption of ASC 740, Income Taxes, on January 1, 2007, the release of the reserves would overstate the current period net income derived from our core operations. The reversal is partially offset by the establishment of $0.8 million in tax reserves associated with the treatment of currency gains under the Company’s transfer pricing policy with one of its foreign subsidiaries. We do not include this tax in our assessment of our operating performance as it does not relate to our core operations. Thus, we have excluded these tax adjustments from adjusted non-GAAP results.

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

	December 31, 2010			December 31, 2009
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	120,744		$	120,217
Short term investments		4,414			—
Accounts receivable, net of allowance of $5,711 and $4,943 in 2010 and 2009, respectively		47,419			37,945
Deferred income taxes		7,214			5,745
Income taxes receivable		2,446			—
Prepaid expenses and other current assets		6,743			4,847
Total current assets		188,980			168,754
Property and equipment, net		14,833			15,759
Long-term investments		1,711			2,797
Goodwill, net		62,265			62,280
Acquisition-related intangible assets, net		1,186			3,473
Deferred income taxes		8,816			9,826
Other assets		2,673			1,822
Total assets	$	280,464		$	264,711
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,745		$	4,434
Accrued compensation and benefits		19,807			12,855
Accrued and other liabilities		13,856			15,430
Deferred revenue		44,974			37,436
Income taxes payable		—			796
Total current liabilities		86,382			70,951
Other non-current liabilities		10,282			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; 21,729,789 and 22,467,123 shares issued and outstanding at December 31, 2010 and 2009, respectively		217			225
Additional paid-in capital		487			2,892
Retained earnings		184,152			182,387
Accumulated other comprehensive loss		(1,056	)		(2,139	)
Total shareholders’ equity		183,800			183,365
Total liabilities and shareholders’ equity	$	280,464		$	264,711

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

	Year Ended December 31,
	2010			2009
	(unaudited)
Operating activities:
Net income	$	28,061		$	16,562
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,161			11,418
Stock compensation		10,420			8,622
(Gain) loss on disposal of equipment		(4	)		130
Tax benefit (deficiency) of stock awards exercised/vested		2,207			(1,023	)
Excess tax benefits from stock based compensation		(475	)		(64	)
Deferred income taxes		(463	)		2,077
Unrealized foreign currency loss		210			1,022
Changes in operating assets and liabilities:
Accounts receivable, net		(9,454	)		26,658
Other assets		(2,661	)		3,058
Accounts payable, accrued and other liabilities		8,271			(10,453	)
Income taxes		(2,934	)		(3,502	)
Deferred revenue		7,633			3,818
Net cash provided by operating activities		49,972			58,323
Investing activities:
Purchase of property and equipment		(5,872	)		(2,378	)
Net (purchases) maturities of investments		(3,011	)		84
Net cash used in investing activities		(8,883	)		(2,294	)
Financing activities:
Purchase of common stock		(77,703	)		(23,435	)
Proceeds from issuance of common stock from options exercised		36,368			1,662
Excess tax benefits from stock based compensation		475			64
Net cash used in financing activities		(40,860	)		(21,709	)
Foreign currency impact on cash		298			158
Net change in cash and cash equivalents		527			34,478
Cash and cash equivalents at beginning of period		120,217			85,739
Cash and cash equivalents at end of period	$	120,744		$	120,217

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1. GAAP and Adjusted earnings (loss) per share by quarter are as follows:

	2009													2010
	1st Qtr		2nd Qtr			3rd Qtr			4th Qtr		Full Year			1st Qtr			2nd Qtr		3rd Qtr		4th Qtr		Full Year
GAAP Diluted EPS	$	0.01	$	(0.02	)	$	0.50		$	0.26	$	0.73		$	0.32		$	0.36	$	0.28	$	0.29	$	1.25
Adjustments to GAAP:
Stock option expense		0.04		0.03			0.04			0.04		0.15			0.03			0.03		0.03		0.02		0.11
Purchase amortization		0.02		0.02			0.02			0.02		0.09			0.02			0.02		0.02		0.01		0.07
Restructuring charge		—		0.12			—			—		0.11			—			—		—		—		—
Sales tax recoveries		—		—			—			—		—			(0.01	)		—		—		—		(0.04	)
Unusual tax adjustments		—		—			(0.12	)		—		(0.12	)		—			—		—		—		(0.01	)
Adjusted Diluted EPS	$	0.07	$	0.14		$	0.43		$	0.31	$	0.96		$	0.36		$	0.38	$	0.32	$	0.32	$	1.38

As discussed below in note 10, in 2011, to be consistent with other companies in the software industry, we will exclude restricted stock expense from our adjusted results. For comparability, we will also present historical adjusted results excluding restricted stock expense. See note 10 for the restricted stock expense impact on the reported results.

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			3rd Qtr		4th Qtr		Full Year
Revenue:
Americas	$	50,827		$	47,372		$	55,626	$	52,733		$	206,558		$	61,889		$	64,875		$	62,555	$	59,631	$	248,950
EMEA		7,030			7,818			6,527		6,650			28,025			7,989			8,587			8,266		7,324		32,166
APAC		2,968			3,219			3,141		2,756			12,084			4,071			4,179			3,193		4,558		16,001
	$	60,825		$	58,409		$	65,294	$	62,139		$	246,667		$	73,949		$	77,641		$	74,014	$	71,513	$	297,117
GAAP Operating Income (Loss):
Americas	$	260		$	(407	)	$	10,736	$	10,859		$	21,448		$	10,333		$	9,836		$	8,121	$	7,578	$	35,868
EMEA		738			1,124			20		(789	)		1,093			418			1,530			1,214		523		3,685
APAC		(371	)		(1,143	)		299		(184	)		(1,399	)		732			651			277		714		2,374
	$	627		$	(426	)	$	11,055	$	9,886		$	21,142		$	11,483		$	12,017		$	9,612	$	8,815	$	41,927
Adjustments (pre-tax):
Americas:
Stock option expense	$	1,400		$	1,010		$	1,369	$	1,374		$	5,153		$	1,178		$	901		$	853	$	860	$	3,792
Purchase amortization		741			741			741		741			2,964			638			639			571		439		2,287
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		$	1,424	$	1,299	$	4,867
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		$	1,424	$	1,299	$	4,867
Adjusted non-GAAP Operating Income (Loss):
Americas	$	2,460		$	4,304		$	12,846	$	12,974		$	32,584		$	11,729		$	10,584		$	9,545	$	8,877	$	40,735
EMEA		738			1,144			20		(789	)		1,113			418			1,530			1,214		523		3,685
APAC		(367	)		(294	)		299		(194	)		(556	)		732			651			277		714		2,374
	$	2,831		$	5,154		$	13,165	$	11,991		$	33,141		$	12,879		$	12,765		$	11,036	$	10,114	$	46,794

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		3rd Qtr		4th Qtr		Full Year
Professional services	$	32,345	$	30,767	$	27,158	$	22,500	$	112,770	$	33,960	$	34,349	$	33,349	$	30,213	$	131,871
Customer support and software enhancements		18,498		18,655		19,759		20,168		77,080		19,501		20,431		20,137		21,810		81,879
Total services revenue	$	50,843	$	49,422	$	46,917	$	42,668	$	189,850	$	53,461	$	54,780	$	53,486	$	52,023	$	213,750

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		3rd Qtr		4th Qtr		Full Year
Hardware revenue	$	3,080	$	2,992	$	5,086	$	3,474	$	14,632	$	4,518	$	5,053	$	5,763	$	4,612	$	19,946
Billed travel		1,980		1,869		1,931		1,719		7,499		1,763		2,323		2,673		2,212	$	8,971
Total hardware and other revenue	$	5,060	$	4,861	$	7,017	$	5,193	$	22,131	$	6,281	$	7,376	$	8,436	$	6,824	$	28,917

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			3rd Qtr			4th Qtr			Full Year
Revenue	$	(2,387	)	$	(1,996	)	$	(764	)	$	876		$	(4,271	)	$	1,053		$	(72	)	$	(548	)	$	(217	)	$	216
Costs and expenses		(3,307	)		(2,560	)		(1,286	)		1,205			(5,948	)		1,346			235			(262	)		(26	)		1,293
Operating income		920			564			522			(329	)		1,677			(293	)		(307	)		(286	)		(191	)		(1,077	)
Foreign currency gains (losses) in other income		(366	)		(506	)		294			(427	)		(1,005	)		(415	)		187			(436	)		—			(664	)
	$	554		$	58		$	816		$	(756	)	$	672		$	(708	)	$	(120	)	$	(722	)	$	(191	)	$	(1,741	)

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

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			3rd Qtr			4th Qtr			Full Year
Operating income	$	1,129	$	800		$	458		(249	)	$	2,138		$	(395	)	$	(340	)	$	(180	)		(181	)	$	(1,096	)
Foreign currency gains (losses) in other income		336		(367	)		2		(276	)		(305	)		(289	)		246			(302	)		64			(281	)
Total impact of changes in the Indian Rupee	$	1,465	$	433		$	460	$	(525	)	$	1,833		$	(684	)	$	(94	)	$	(482	)	$	(117	)	$	(1,377	)

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		3rd Qtr			4th Qtr		Full Year
Interest income	$	137		$	95		$	71		$	65		$	368		$	80		$	109	$	252		$	195	$	636
Foreign currency (losses) gains		(366	)		(506	)		294			(427	)		(1,005	)		(415	)		187		(436	)		—		(664	)
Other non-operating (expense) income		(4	)		7			(110	)		(12	)		(119	)		(163	)		8		(4	)		44		(115	)
Total other (expense) income	$	(233	)	$	(404	)	$	255		$	(374	)	$	(756	)	$	(498	)	$	304	$	(188	)	$	239	$	(143	)

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

	2009										2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year
Capital expenditures	$	873	$	487	$	366	$	652	$	2,378	$	1,177	$	1,529	$	1,625	$	1,541	$	5,872

8.	Stock Repurchase Activity
	In 2010, under the share repurchase program authorized by the Board of Directors, we repurchased approximately 2.7 million shares of common stock totaling $76.5 million at an average price of $28.15. 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 December 31, 2010												Year Ended December 31, 2010
	Income
	before		Income tax							Effective Tax			Income before		Income tax							Effective Tax
	income taxes		provision			Net income		Diluted EPS		Rate			income taxes		provision			Net income		Diluted EPS		Rate
GAAP results before tax adjustments	$	9,054	$	3,202		$	5,852	$	0.26		35.4	%	$	41,784	$	14,494		$	27,290	$	1.22		34.7	%
Provision to return adjustments(a)		—		(386	)		386		0.02					—		(533	)		533		0.02
Income tax reserve adjustments(b)		—		(127	)		127		0.01					—		(29	)		29		—
Disqualifying dispositions of incentive stock options (c)		—		(80	)		80		—					—		(209	)		209		0.01
GAAP results- reported	$	9,054	$	2,609		$	6,445	$	0.29		28.8	%	$	41,784	$	13,723		$	28,061	$	1.25		32.8	%
Adjusted results before tax adjustments	$	10,353	$	3,658		$	6,695	$	0.30		35.3	%	$	46,651	$	16,182		$	30,469	$	1.36		34.7	%
Provision to return adjustments(a)		—		(386	)		386		0.02					—		(533	)		533		0.02
Income tax reserve adjustments(b)		—		(127	)		127		0.01					—		(29	)		29		—
Adjusted results- reported	$	10,353	$	3,145		$	7,208	$	0.32		30.4	%	$	46,651	$	15,620		$	31,031	$	1.38		33.5	%

(a)	Provision to return adjustments primarily include the true-up of the 2009 tax provision to the 2009 tax return filed in the third quarter of 2010. The majority of the adjustments relate to research and development credits.
(b)	Adjustments include the establishment of income tax reserves for state audits, offset by the release of U.S. federal income tax reserves that were previously expensed. The release resulted from the expiration of tax audit statues for tax returns filed for 2006 and prior.
(c)	The adjustment represents a tax benefit from disqualifying dispositions of incentive stock options that were previously expensed.

10. In 2011, to be consistent with other companies in the software industry, we will begin reporting adjusted results excluding all equity-based compensation. Historically, our adjusted results did not exclude restricted stock expense. See note 1 above for the other reconciling items between our GAAP and adjusted results. The impact of restricted stock expense on our GAAP and Adjusted Results is as follows (in thousands except per share amounts):

	2007										2008
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year
Cost of services	$	38	$	40	$	42	$	42	$	162	$	81	$	79	$	84	$	81	$	325
Sales and marketing		134		149		131		152		566		231		235		244		244		954
Research and development		57		60		65		63		245		117		117		120		120		474
General and administrative		220		206		322		204		952		377		424		432		420		1,653
Total restricted stock expense	$	449	$	455	$	560	$	461	$	1,925	$	806	$	855	$	880	$	865	$	3,406
Income tax provision		159		162		199		163		683		280		297		306		301		1,184
Net income	$	290	$	293	$	361	$	298	$	1,242	$	526	$	558	$	574	$	564	$	2,222
Diluted earnings per share	$	0.01	$	0.01	$	0.01	$	0.01	$	0.05	$	0.02	$	0.02	$	0.02	$	0.02	$	0.09

	2009										2010
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year
Cost of services	$	98	$	106	$	108	$	107	$	419	$	198	$	240	$	242	$	236	$	916
Sales and marketing		267		146		254		258		925		378		438		442		449		1,707
Research and development		134		42		125		125		426		206		250		262		269		987
General and administrative		420		395		438		446		1,699		625		673		821		899		3,018
Total restricted stock expense	$	919	$	689	$	925	$	936	$	3,469	$	1,407	$	1,601	$	1,767	$	1,853	$	6,628
Income tax provision		308		215		300		382		1,205		485		553		609		652		2,299
Net income	$	611	$	474	$	625	$	554	$	2,264	$	922	$	1,048	$	1,158	$	1,201	$	4,329
Diluted earnings per share	$	0.03	$	0.02	$	0.03	$	0.02	$	0.10	$	0.04	$	0.05	$	0.05	$	0.05	$	0.19

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

11. Total equity-based compensation from 2007-2010 is as follows (in thousands except per share amounts):

	Year ended December 31,
	2007		2008		2009		2010
Stock options	$	4,274	$	5,458	$	5,153	$	3,792
Restricted stock		1,925		3,406		3,469		6,628
Total equity-based compensation		6,199		8,864		8,622		10,420
Income tax provision		2,200		3,081		2,996		3,614
Net income	$	3,999	$	5,783	$	5,626	$	6,806
Diluted earnings per share	$	0.15	$	0.24	$	0.25	$	0.30
Diluted earnings per share — stock options	$	0.10	$	0.15	$	0.15	$	0.11
Diluted earnings per share — restricted stock	$	0.05	$	0.09	$	0.10	$	0.19

12. In 2011, to be consistent with other companies in the software industry, we will begin reporting adjusted results excluding all equity-based compensation. The following provides an operating profit, operating margin and diluted adjusted EPS bridge for purposes of 2011 comparability for prospective reporting (in thousands except per share amounts):

	2009															2010
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Full Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Full Year
Adjusted operating profit, reported	$	2,831		$	5,154		$	13,165		$	11,991		$	33,141		$	12,879		$	12,765		$	11,036		$	10,114		$	46,794
Add: restricted stock expense		919			689			925			936			3,469			1,407			1,601			1,767			1,853			6,628
Adjusted operating profit, 2011 comps	$	3,750		$	5,843		$	14,090		$	12,927		$	36,610		$	14,286		$	14,366		$	12,803		$	11,967		$	53,422
Adjusted operating margin %, reported		4.7	%		8.8	%		20.2	%		19.3	%		13.4	%		17.4	%		16.4	%		14.9	%		14.1	%		15.7	%
Restricted stock expense margin		1.5	%		1.2	%		1.4	%		1.5	%		1.4	%		1.9	%		2.1	%		2.4	%		2.6	%		2.2	%
Adjusted operating margin %, 2011 comps *		6.2	%		10.0	%		21.6	%		20.8	%		14.8	%		19.3	%		18.5	%		17.3	%		16.7	%		18.0	%
Adjusted net income, reported	$	1,728		$	3,232		$	9,638		$	7,023		$	21,621		$	8,110		$	8,560		$	7,153		$	7,208		$	31,031
Add: restricted stock expense, net of tax		611			474			625			554			2,264			922			1,048			1,158			1,201			4,329
Adjusted net income, 2011 comps	$	2,339		$	3,706		$	10,263		$	7,577		$	23,885		$	9,032		$	9,608		$	8,311		$	8,409		$	35,360
Adjusted diluted earnings per share, reported	$	0.07		$	0.14		$	0.43		$	0.31		$	0.96		$	0.36		$	0.38		$	0.32		$	0.32		$	1.38
Restricted stock expense diluted earnings per share	$	0.03		$	0.02		$	0.03		$	0.02		$	0.10		$	0.04		$	0.05		$	0.05		$	0.05		$	0.19
Adjusted diluted earnings per share, 2011 comps *	$	0.10		$	0.17		$	0.46		$	0.33		$	1.06		$	0.40		$	0.42		$	0.38		$	0.38		$	1.58
Adjusted fully diluted shares (Non-GAAP)		23,058			22,444			22,175			22,667			22,558			22,535			22,776			22,051			22,350			22,450

* Operating margin % and diluted earnings per share does not necessarily add due to the rounding of the individual calculations.