Exhibit 99.1
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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 Second Quarter
2008 Revenue and Earnings
Company Affirms Full Year Earnings Per Share Guidance
ATLANTA — July 22, 2008 —Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported second quarter 2008 Earnings Per Share (EPS) in line with guidance previously issued for the quarter and affirmed its Earnings Per Share guidance for the full year. Manhattan Associates’ second quarter GAAP diluted earnings per share were $0.37, a 16% increase over the second quarter of 2007 on revenue of $90.5 million, a 1% increase. On a non-GAAP basis, adjusted diluted earnings per share were $0.42, a 17% increase over the second quarter of 2007.
SECOND QUARTER FINANCIAL HIGHLIGHTS:
Summarized highlights of the 2008 second quarter results, as compared to the 2007 second quarter, follow:
| • | | Consolidated revenue increased 1% to $90.5 million. Currency changes positively affected revenue by one percent. |
| | • | | License revenue decreased 17%, to $19.4 million. |
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| | • | | Services revenue totaled $62.3 million, increasing 12%. |
| • | | GAAP Operating income decreased 3% to $13.3 million. |
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| • | | Operating income, on a non-GAAP basis, increased 1% to $15.5 million. Excluding the impact of currency changes, operating income on a non-GAAP basis decreased one percent. |
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| • | | GAAP diluted earnings per share increased 16% to $0.37 per share. |
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| • | | Adjusted diluted earnings per share, a non-GAAP measure, increased 17% to $0.42 per share. |
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| • | | Cash Flow from Operations was $21.0 million, with Days Sales Outstanding of 78 days. |
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| • | | Cash and Investments on hand at June 30, 2008 was $83.5 million. |
| • | | The Company did not execute any share repurchases in the second quarter of 2008. |
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| | | The Company has $12.6 million in remaining share repurchase authority. |
YEAR-TO-DATE FINANCIAL HIGHLIGHTS:
Summarized highlights of the first six months of 2008, as compared to the first six months of 2007, follow:
| • | | Consolidated revenue increased 7% to $178.8 million. Excluding the impact of currency changes, revenue increased 5%. |
| | • | | License revenue was $37.7 million, a 1% increase. |
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| | • | | Services revenue totaled $122.1 million, increasing 10%. |
| • | | GAAP operating income increased 7% to $22.4 million. Excluding the impact of currency changes, GAAP operating income increased 8%. |
| • | | On a non-GAAP basis, operating income increased 8% to $26.5 million. Excluding the impact of currency changes operating income on a non-GAAP basis increased 9%. |
| • | | GAAP diluted earnings per share increased 29% to $0.66. |
| • | | Adjusted diluted earnings per share, a non-GAAP measure, increased 31% to $0.77. |
| • | | The Company repurchased 542,596 common shares during the first six months of 2008 totaling $12.4 million at an average share price of $22.76. All of these shares were repurchased in the first quarter of 2008. |
“Given the challenges in the overall economy, I believe our second quarter financial results are solid,” said Pete Sinisgalli, president and chief executive officer of Manhattan Associates. “More important, by continuing to apply focus and discipline to our operating plans and by continuing to diligently execute on our customer commitments, we expect to deliver on our 2008 earnings per share guidance while enhancing our leadership position in the supply chain market,” he added.
Significant sales-related achievements during the quarter include:
| | • | | New customers such as Baekgaard, LTD, Ballester Hermanos, Inc., Bay Valley Foods LLC, Benjamin Moore & Co., Bestin Supply Chain, C.R. England, Inc., Express Scripts, Inc., EXE c&t Co., Ltd, Foschini Retail Group (Pty) Ltd., LamRite West, Inc. (dba Darice, Inc.), Landair, Inc., LoginUral, LLC, Logolux, Mydin Mohamed Holdings Bhd, Samsung India Electronics Pvt Ltd, Shanghai Tingtong Logistics Co., Ltd., Sportmaster Ltd., and United Natural Foods, Inc., |
| | • | | Expanding partnerships with existing customers such as Al-Azizia Panda United Inc., Archbrook Laguna LLC, Australian Pharmaceutical Industries Limited, C&S Wholesale Grocers, Copernica, Inc. DBA Amplifier, Donaldson Company, Inc., Grays (NSW) Pty Lt., O’Reilly Auto Parts, Pearl, Incorporated, Perfect 10 Satellite Distribution, Inc., Staples, Inc., UWT Logistics LLC, Shanghai Bertelsmann Industry Company Ltd., Sturm Foods, Inc., Volcom, Inc., and Warnaco, Inc. |
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| | • | | Closing three contracts in the range of $1.0 million or more in recognized license revenue. |
2008 GUIDANCE
Manhattan Associates provided the following diluted earnings per share guidance for the third quarter and full year 2008. A full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.
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| | | Fully Diluted EPS |
| | | Per Share range | | % Growth range |
GAAP Earnings Per Share | | | | | | | | | | | | | | | | |
| Q3 2008 — diluted earnings per share | | $ | 0.29 | | | $ | 0.37 | | | | 0 | % | | | 28 | % |
| Full year 2008 — diluted earnings per share | | $ | 1.33 | | | $ | 1.39 | | | | 18 | % | | | 23 | % |
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Adjusted Earnings Per Share | | | | | | | | | | | | | | | | |
| Q3 2008 — diluted earnings per share | | $ | 0.34 | | | $ | 0.42 | | | | 0 | % | | | 24 | % |
| Full year 2008 — diluted earnings per share | | $ | 1.54 | | | $ | 1.60 | | | | 18 | % | | | 23 | % |
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 September 15, 2008, 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 2008 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 October 2008.
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 22, 2008 after the market closes. Investors are invited to listen to a live Web cast of the conference call through the investor relations section of Manhattan Associates’ Web site. To listen to the live Web cast, please go to the Web site 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 53423042, 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’ third quarter 2008 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 exclusive of non-GAAP adjustments. This release should be read in conjunction with its Form 8-K earnings release filing for the quarter ended June 30, 2008.
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, and stock option expense under SFAS 123(R), all net of income tax effects. A reconciliation of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental attachment to this release.
The Company has also presented its revenue, operating income and adjusted operating income growth between periods excluding the effect 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 17-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 ILS™, 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 may contain “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 delays in product development, undetected software errors, competitive pressures, technical difficulties, market acceptance, availability of technical personnel, changes in customer requirements, risks of international operations and general economic conditions. Additional risk factors are set forth in Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. 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
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Revenue: | | | | | | | | | | | | | | | | |
| Software license | | $ | 19,365 | | | $ | 23,398 | | | | 37,677 | | | | 37,151 | |
| Services | | | 62,289 | | | | 55,863 | | | | 122,126 | | | | 110,663 | |
| Hardware and other | | | 8,836 | | | | 10,368 | | | | 19,011 | | | | 20,005 | |
| | | | | | | | | | | | | |
| Total Revenue | | | 90,490 | | | | 89,629 | | | | 178,814 | | | | 167,819 | |
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| Costs and Expenses: | | | | | | | | | | | | | | | | |
| Cost of license | | | 1,641 | | | | 1,303 | | | | 2,785 | | | | 2,446 | |
| Cost of services | | | 29,856 | | | | 27,284 | | | | 61,136 | | | | 53,283 | |
| Cost of hardware and other | | | 7,317 | | | | 8,864 | | | | 15,583 | | | | 17,225 | |
| Research and development | | | 11,711 | | | | 12,278 | | | | 24,365 | | | | 23,429 | |
| Sales and marketing | | | 14,676 | | | | 14,491 | | | | 28,248 | | | | 27,098 | |
| General and administrative | | | 8,867 | | | | 8,383 | | | | 17,938 | | | | 16,529 | |
| Depreciation and amortization | | | 3,158 | | | | 3,354 | | | | 6,406 | | | | 6,855 | |
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| Total costs and expenses | | | 77,226 | | | | 75,957 | | | | 156,461 | | | | 146,865 | |
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| Operating income | | | 13,264 | | | | 13,672 | | | | 22,353 | | | | 20,954 | |
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| Other income, net | | | 650 | | | | 298 | | | | 2,951 | | | | 1,390 | |
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| Income before income taxes | | | 13,914 | | | | 13,970 | | | | 25,304 | | | | 22,344 | |
| Income tax provision | | | 4,835 | | | | 4,959 | | | | 8,793 | | | | 7,932 | |
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| Net income | | $ | 9,079 | | | $ | 9,011 | | | $ | 16,511 | | | $ | 14,412 | |
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| Basic earnings per share | | $ | 0.37 | | | $ | 0.34 | | | $ | 0.68 | | | $ | 0.53 | |
| Diluted earnings per share | | $ | 0.37 | | | $ | 0.32 | | | $ | 0.66 | | | $ | 0.51 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares: | | | | | | | | | | | | | | | | |
| Basic | | | 24,259 | | | | 26,555 | | | | 24,341 | | | | 26,953 | |
| Diluted | | | 24,826 | | | | 27,761 | | | | 24,833 | | | | 28,149 | |
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES
(in thousands, except per share amounts)
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| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | $ | 13,264 | | | $ | 13,672 | | | $ | 22,353 | | | $ | 20,954 | |
Stock option expense(a) | | | 1,372 | | | | 1,130 | | | | 2,676 | | | | 2,251 | |
Purchase amortization(b) | | | 844 | | | | 1,195 | | | | 1,725 | | | | 2,390 | |
Sales tax recoveries(c) | | | — | | | | (650 | ) | | | (234 | ) | | | (1,023 | ) |
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| Adjusted operating income (Non-GAAP) | | $ | 15,480 | | | $ | 15,347 | | | $ | 26,520 | | | $ | 24,572 | |
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| Income tax provision | | $ | 4,835 | | | $ | 4,959 | | | $ | 8,793 | | | $ | 7,932 | |
Stock option expense(a) | | | 477 | | | | 402 | | | | 930 | | | | 799 | |
Purchase amortization(b) | | | 293 | | | | 424 | | | | 599 | | | | 848 | |
Sales tax recoveries(c) | | | — | | | | (231 | ) | | | (81 | ) | | | (363 | ) |
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| Adjusted income tax provision (Non-GAAP) | | $ | 5,605 | | | $ | 5,554 | | | $ | 10,241 | | | $ | 9,216 | |
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| | | | | | | | | | | | | | | | | |
| Net income | | $ | 9,079 | | | $ | 9,011 | | | $ | 16,511 | | | $ | 14,412 | |
Stock option expense(a) | | | 895 | | | | 728 | | | | 1,746 | | | | 1,452 | |
Purchase amortization(b) | | | 551 | | | | 771 | | | | 1,126 | | | | 1,542 | |
Sales tax recoveries(c) | | | — | | | | (419 | ) | | | (153 | ) | | | (660 | ) |
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| Adjusted Net income (Non-GAAP) | | $ | 10,525 | | | $ | 10,091 | | | $ | 19,230 | | | $ | 16,746 | |
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| Diluted EPS | | $ | 0.37 | | | $ | 0.32 | | | $ | 0.66 | | | $ | 0.51 | |
Stock option expense(a) | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.07 | | | $ | 0.05 | |
Purchase amortization(b) | | $ | 0.02 | | | $ | 0.03 | | | $ | 0.05 | | | $ | 0.05 | |
Sales tax recoveries(c) | | $ | — | | | $ | (0.02 | ) | | $ | (0.01 | ) | | $ | (0.02 | ) |
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| Adjusted Diluted EPS (Non-GAAP) | | $ | 0.42 | | | $ | 0.36 | | | $ | 0.77 | | | $ | 0.59 | |
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| Fully Diluted Shares | | | 24,826 | | | | 27,761 | | | | 24,833 | | | | 28,149 | |
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| (a) | | SFAS 123(R) requires us to expense stock options issued to employees. 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, 2008 and 2007: |
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| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| |
| Cost of services | | $ | 117 | | | $ | 110 | | | $ | 239 | | | $ | 213 | |
| Research and development | | | 196 | | | | 159 | | | | 392 | | | | 314 | |
| Sales and marketing | | | 426 | | | | 383 | | | | 846 | | | | 740 | |
| General and administrative | | | 633 | | | | 478 | | | | 1,199 | | | | 984 | |
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| Total stock option expense | | $ | 1,372 | | | $ | 1,130 | | | $ | 2,676 | | | $ | 2,251 | |
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| (b) | | Adjustments represent purchase 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. |
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| (c) | | Adjustment represents recoveries of previously expensed 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. |
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2008 | | | 2007 | |
| |
ASSETS | | | | | | | | |
| Current Assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 76,928 | | | $ | 44,675 | |
| Short term investments | | | — | | | | 17,904 | |
| Accounts receivable, net of allowance of $5,136 and $6,618 in 2008 and 2007, respectively | | | 77,098 | | | | 72,534 | |
| Deferred income taxes | | | 6,642 | | | | 6,602 | |
| Prepaid expenses and other current assets | | | 8,297 | | | | 8,646 | |
| | | | | | | |
| Total current assets | | | 168,965 | | | | 150,361 | |
| | | | | | | | | |
| Property and equipment, net | | | 25,090 | | | | 24,421 | |
| Long-term investments | | | 6,532 | | | | 10,193 | |
| Acquisition-related intangible assets, net | | | 7,966 | | | | 9,691 | |
| Goodwill, net | | | 62,300 | | | | 62,285 | |
| Deferred income taxes | | | 9,845 | | | | 9,846 | |
| Other assets | | | 4,042 | | | | 4,863 | |
| | | | | | | |
| Total assets | | $ | 284,740 | | | $ | 271,660 | |
| | | | | | | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 8,974 | | | $ | 9,112 | |
| Accrued compensation and benefits | | | 16,536 | | | | 19,357 | |
| Accrued and other liabilities | | | 12,224 | | | | 10,040 | |
| Deferred revenue | | | 34,572 | | | | 31,817 | |
| Income taxes payable | | | 9,903 | | | | 8,156 | |
| | | | | | | |
| Total current liabilities | | | 82,209 | | | | 78,482 | |
| | | | | | | | | |
| Other non-current liabilities | | | 7,848 | | | | 7,473 | |
| | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
| Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2008 or 2007 | | | — | | | | — | |
| Common stock, $.01 par value; 100,000,000 shares authorized; 24,681,791 and 24,899,919 shares issued and outstanding at June 30, 2008 and December 31, 2007, respectively | | | 245 | | | | 249 | |
| Additional paid-in capital | | | 12,041 | | | | 17,744 | |
| Retained earnings | | | 181,700 | | | | 165,189 | |
| Accumulated other comprehensive income | | | 697 | | | | 2,523 | |
| | | | | | | |
| Total shareholders’ equity | | | 194,683 | | | | 185,705 | |
| | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 284,740 | | | $ | 271,660 | |
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MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | | | | | | | | |
| | | Six Months Ended | |
| | | June 30, | |
| | | 2008 | | | 2007 | |
Operating activities: | | | | | | | | |
| Net income | | $ | 16,511 | | | $ | 14,412 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 6,406 | | | | 6,855 | |
| Stock compensation | | | 4,337 | | | | 3,155 | |
| Loss/ (gain) on disposal of equipment | | | 32 | | | | (3 | ) |
| Tax benefit of stock awards exercised/vested | | | 119 | | | | 1,188 | |
| Excess tax deficiency from stock based compensation | | | (76 | ) | | | (519 | ) |
| Unrealized foreign currency gains | | | (1,292 | ) | | | (52 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable, net | | | (3,840 | ) | | | (9,439 | ) |
| Other assets | | | 1,126 | | | | 2,321 | |
| Accounts payable, accrued and other liabilities | | | (193 | ) | | | (4,633 | ) |
| Income taxes | | | 1,791 | | | | (65 | ) |
| Deferred revenue | | | 2,196 | | | | 2,988 | |
| | | | | | | |
| Net cash provided by operating activities | | | 27,117 | | | | 16,208 | |
| | | | | | | |
| | | | | | | | | |
Investing activities: | | | | | | | | |
| Purchase of property and equipment | | | (5,560 | ) | | | (6,467 | ) |
| Net maturities of investments | | | 21,533 | | | | 45,239 | |
| | | | | | | |
| Net cash provided by investing activities | | | 15,973 | | | | 38,772 | |
| | | | | | | |
| | | | | | | | | |
Financing activities: | | | | | | | | |
| Purchase of common stock | | | (12,351 | ) | | | (52,768 | ) |
| Excess tax benefits from stock based compensation | | | 76 | | | | 519 | |
| Proceeds from issuance of common stock from options exercised | | | 2,187 | | | | 6,100 | |
| | | | | | | |
| Net cash used in financing activities | | | (10,088 | ) | | | (46,149 | ) |
| | | | | | | |
| | | | | | | | | |
| Foreign currency impact on cash | | | (749 | ) | | | 923 | |
| | | | | | | |
| Net change in cash and cash equivalents | | | 32,253 | | | | 9,754 | |
| Cash and cash equivalents at beginning of period | | | 44,675 | | | | 18,449 | |
| | | | | | | |
| Cash and cash equivalents at end of period | | $ | 76,928 | | | $ | 28,203 | |
| | | | | | | |
| | | | | | | | | |
Supplemental disclosures of cash flow information- noncash investing activity: | | | | | | | | |
| Tenant improvements funded by landlord | | $ | — | | | $ | 7,918 | |
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MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
(in thousands, except per share amounts)
1. GAAP and Adjusted Earnings per share by quarter are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
GAAP Diluted EPS | | $ | 0.19 | | | $ | 0.32 | | | $ | 0.29 | | | $ | 0.33 | | | $ | 0.30 | | | $ | 0.37 | | | $ | 0.51 | | | $ | 0.66 | |
Adjustments to GAAP: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock option expense | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.02 | | | $ | 0.03 | | | $ | 0.04 | | | $ | 0.05 | | | $ | 0.07 | |
| Purchase amortization | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.03 | | | $ | 0.02 | | | $ | 0.02 | | | $ | 0.05 | | | $ | 0.05 | |
| Sales tax recoveries | | $ | (0.01 | ) | | $ | (0.02 | ) | | $ | (0.01 | ) | | $ | — | | | $ | (0.01 | ) | | $ | — | | | $ | (0.02 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted Diluted EPS | | $ | 0.23 | | | $ | 0.36 | | | $ | 0.34 | | | $ | 0.37 | | | $ | 0.35 | | | $ | 0.42 | | | $ | 0.59 | | | $ | 0.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
2. Revenues and operating income (loss) by reportable segment are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Americas | | $ | 68,446 | | | $ | 75,599 | | | $ | 69,850 | | | $ | 70,427 | | | $ | 72,129 | | | $ | 73,551 | | | $ | 144,045 | | | $ | 145,680 | |
| EMEA | | | 5,844 | | | | 9,809 | | | | 10,463 | | | | 10,733 | | | | 12,028 | | | | 11,961 | | | | 15,653 | | | | 23,989 | |
| APAC | | | 3,900 | | | | 4,221 | | | | 4,276 | | | | 3,833 | | | | 4,167 | | | | 4,978 | | | | 8,121 | | | | 9,145 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 78,190 | | | $ | 89,629 | | | $ | 84,589 | | | $ | 84,993 | | | $ | 88,324 | | | $ | 90,490 | | | $ | 167,819 | | | $ | 178,814 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
GAAP Operating Income (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Americas | | $ | 8,734 | | | $ | 12,338 | | | $ | 8,894 | | | $ | 10,334 | | | $ | 7,065 | | | $ | 10,643 | | | $ | 21,072 | | | $ | 17,708 | |
| EMEA | | | (1,321 | ) | | | 1,145 | | | | 1,432 | | | | 1,166 | | | | 2,055 | | | | 2,215 | | | | (176 | ) | | | 4,270 | |
| APAC | | | (131 | ) | | | 189 | | | | 261 | | | | 17 | | | | (31 | ) | | | 406 | | | | 58 | | | | 375 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 7,282 | | | $ | 13,672 | | | $ | 10,587 | | | $ | 11,517 | | | $ | 9,089 | | | $ | 13,264 | | | $ | 20,954 | | | $ | 22,353 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments (pre-tax): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Americas: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock option expense | | $ | 1,082 | | | $ | 1,090 | | | $ | 1,184 | | | $ | 816 | | | $ | 1,267 | | | $ | 1,335 | | | $ | 2,172 | | | $ | 2,602 | |
| Purchase amortization | | | 1,195 | | | | 1,195 | | | | 1,180 | | | | 1,083 | | | | 881 | | | | 844 | | | | 2,390 | | | | 1,725 | |
| Sales tax recoveries | | | (373 | ) | | | (650 | ) | | | (269 | ) | | | (146 | ) | | | (234 | ) | | | — | | | | (1,023 | ) | | | (234 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,904 | | | $ | 1,635 | | | $ | 2,095 | | | $ | 1,753 | | | $ | 1,914 | | | $ | 2,179 | | | $ | 3,539 | | | $ | 4,093 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
EMEA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock option expense | | $ | 39 | | | $ | 40 | | | $ | 40 | | | $ | (17 | ) | | $ | 37 | | | $ | 37 | | | $ | 79 | | | $ | 74 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 39 | | | $ | 40 | | | $ | 40 | | | $ | (17 | ) | | $ | 37 | | | $ | 37 | | | $ | 79 | | | $ | 74 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments | | $ | 1,943 | | | $ | 1,675 | | | $ | 2,135 | | | $ | 1,736 | | | $ | 1,951 | | | $ | 2,216 | | | $ | 3,618 | | | $ | 4,167 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted non-GAAP Operating Income (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Americas | | $ | 10,638 | | | $ | 13,973 | | | $ | 10,989 | | | $ | 12,087 | | | $ | 8,979 | | | $ | 12,822 | | | $ | 24,611 | | | $ | 21,801 | |
| EMEA | | | (1,282 | ) | | | 1,185 | | | | 1,472 | | | | 1,149 | | | | 2,092 | | | | 2,252 | | | | (97 | ) | | | 4,344 | |
| APAC | | | (131 | ) | | | 189 | | | | 261 | | | | 17 | | | | (31 | ) | | | 406 | | | | 58 | | | | 375 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 9,225 | | | $ | 15,347 | | | $ | 12,722 | | | $ | 13,253 | | | $ | 11,040 | | | $ | 15,480 | | | $ | 24,572 | | | $ | 26,520 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
3. Our services revenue consists of fees generated from professional services and customer support and software enhancements related to our software products as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
| Professional services | | $ | 38,831 | | | $ | 39,865 | | | $ | 41,488 | | | $ | 38,946 | | | $ | 41,718 | | | $ | 42,866 | | | $ | 78,696 | | | $ | 84,584 | |
| Customer support and software enhancements | | | 15,969 | | | | 15,998 | | | | 16,949 | | | | 18,107 | | | | 18,119 | | | | 19,423 | | | | 31,967 | | | | 37,542 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total services revenue | | $ | 54,800 | | | $ | 55,863 | | | $ | 58,437 | | | $ | 57,053 | | | $ | 59,837 | | | $ | 62,289 | | | $ | 110,663 | | | $ | 122,126 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
4. Hardware and other revenue includes the following items:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Hardware revenue | | $ | 6,666 | | | $ | 7,270 | | | $ | 5,614 | | | $ | 5,661 | | | $ | 7,141 | | | $ | 5,428 | | | $ | 13,936 | | | $ | 12,569 | |
| Billed Travel | | | 2,971 | | | | 3,098 | | | | 3,235 | | | | 3,702 | | | | 3,034 | | | | 3,408 | | | | 6,069 | | | | 6,442 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Hardware and other revenue | | $ | 9,637 | | | $ | 10,368 | | | $ | 8,849 | | | $ | 9,363 | | | $ | 10,175 | | | $ | 8,836 | | | $ | 20,005 | | | $ | 19,011 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
(in thousands, except per share amounts)
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:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue | | $ | 748 | | | $ | 992 | | | $ | 1,049 | | | $ | 1,231 | | | $ | 1,131 | | | $ | 1,189 | | | $ | 1,740 | | | $ | 2,320 | |
| Costs and Expenses | | | 858 | | | | 1,306 | | | | 1,629 | | | | 1,892 | | | | 1,601 | | | | 911 | | | | 2,164 | | | | 2,512 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | (110 | ) | | | (314 | ) | | | (580 | ) | | | (661 | ) | | | (470 | ) | | | 278 | | | | (424 | ) | | | (192 | ) |
| Foreign currency gains (losses) in other income | | | (22 | ) | | | (602 | ) | | | 897 | | | | 892 | | | | 1,641 | | | | 299 | | | | (624 | ) | | | 1,940 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | (132 | ) | | $ | (916 | ) | | $ | 317 | | | $ | 231 | | | $ | 1,171 | | | $ | 577 | | | $ | (1,048 | ) | | $ | 1,748 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
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:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | (14 | ) | | $ | (443 | ) | | $ | (693 | ) | | | (725 | ) | | | (619 | ) | | | 59 | | | $ | (457 | ) | | $ | (560 | ) |
| Foreign currency gains (losses) in other income | | | (82 | ) | | | (536 | ) | | | (312 | ) | | | (248 | ) | | | 94 | | | | 385 | | | | (618 | ) | | | 479 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total impact of changes in the Indian Rupee | | $ | (96 | ) | | | (979 | ) | | $ | (1,005 | ) | | $ | (973 | ) | | $ | (525 | ) | | $ | 444 | | | $ | (1,075 | ) | | $ | (81 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
6. Capital expenditures are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | 2008 | | | 2007 | | | 2008 | |
| | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | YTD | | | YTD | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital expenditures | | $ | 2,956 | | | $ | 3,511 | | | $ | 1,467 | | | $ | 1,467 | | | $ | 2,716 | | | $ | 2,844 | | | $ | 6,467 | | | $ | 5,560 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
7. Stock Repurchase Activity
During 2008, we repurchased 542,596 shares of common stock totaling $12.4 million at an average price of $22.76. In 2007 for the full year, we repurchased 3.6 million shares of common stock totaling $100 million at an average price of $28.05.
