EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Matt Roberts
Investor Relations/Business Analysis Manager
678.597.7317
mroberts@manh.com
MANHATTAN ASSOCIATES ANNOUNCES RECORD REVENUE FOR THE
SECOND QUARTER OF 2003
ATLANTA - JULY 22, 2003 - Manhattan Associates(TM), Inc. (Nasdaq: MANH), the
global leader in providing supply chaIn execution (SCE) solutions, today
announced results for the second quarter ended June 30, 2003.
KEY QUARTERLY FINANCIAL HIGHLIGHTS FOR MANHATTAN ASSOCIATES INCLUDE:
- - Total revenue for the quarter ended June 30, 2003, was a record $51.0
million, an increase of 11% over the prior quarter and 13% over the second
quarter of 2002.
- - Software and hosting fees for the quarter ended June 30, 2003, were a
record $11.4 million, an increase of 12% over the prior quarter and 11%
over the second quarter of 2002.
- - Services revenue for the quarter ended June 30, 2003, was a record $33.4
million, an increase of 10% over the prior quarter and 19% over the second
quarter of 2002. The services' gross margin remained strong at 58%, which
was consistent with the first quarter of 2003 and second quarter of 2002.
- - Cash from operations for the quarter was $13.7 million, and total cash and
investments increased by $15 million to $143.5 million at June 30, 2003,
compared to $128.5 million at March 31, 2003.
- - Days Sales Outstanding (DSOs) were exceptionally strong at 59 days, down
from 71 days at March 31, 2003.
Adjusted net income for the quarter, which excludes the Kmart recovery,
restructuring charge and the amortization of acquisition-related intangible
assets, net of taxes, was $6.4 million for the quarter, or $0.21 per fully
diluted share, compared to $6.6 million or $0.21 per fully diluted share for the
second quarter of 2002. GAAP net income was $5.8 million or $0.19 per fully
diluted share.
The Company provides adjusted net income and adjusted net income per share in
the press release as additional information of the Company's operating results.
The measures are not in accordance with, or an alternative for, GAAP and may be
different from net income and per share measures used by other companies.
Adjusted net income has been adjusted to exclude the effects of the Kmart
recovery, restructuring charge and amortization of acquisition-related
intangibles. The Company believes that this presentation of adjusted net income
and adjusted net income per share provides useful information to investors
regarding certain additional financial and business trends relating to the
Company's financial condition and results of operations. The effective tax rate
used in calculating adjusted net income for the quarter was 35.4%.
"We are very proud of our achievements during the quarter, especially given the
challenges faced by other software companies," said Richard Haddrill, Manhattan
Associates president and CEO. "With the continued growth of our products,
integration of recent acquisitions into our product line and the strengthening
of our organization's ability to deliver new products and services in areas such
as transportation, returns, labor management and RFID, we are excited about our
ability to provide comprehensive and innovative solutions to our customers."
OTHER KEY QUARTERLY HIGHLIGHTS FOR MANHATTAN ASSOCIATES INCLUDE THE FOLLOWING:
- - Signed key new customers in the quarter including Simon & Schuster, Giant
Eagle, Big 5, Robinson, Games Workshop and Adchem.
- - Expanded its partnerships with many existing clients including TNT,
Agrilink, Tibbett & Britten and Cabelas.
- - Finalized the purchase of ReturnCentral, a leading provider of reverse
supply chain solutions and services.
- - Advanced its leadership position in Radio Frequency Identification (RFID)
technology by delivering "RFID in a Box," a packaged RFID solution
encompassing the software and hardware necessary to deploy RFID in the
supply chain, and RFID Middleware, a piece of middleware that will
streamline the deployment of RFID initiatives by bridging the gap between
legacy software and new RFID hardware.
- - Formalized its strategic partnership with RFID hardware manufacturer Alien
Technology Corp. that calls for joint development, joint marketing and
cross selling between the two
companies. In addition, the Company made a $2 million investment in Alien
Technology Corp. on July 11, 2003.
- - Unveiled its synchronized product development initiative and released its
revised product branding.
- - Enrolled five additional companies in its Independent Software Vendor (ISV)
Certification Program including webMethods and GlobeRanger. Manhattan
Associates' ISV Certification Program provides customers with interface
standardization between third party applications and its SCE solutions.
- - Signed a Preferred Partner Agreement with Siemens-Dematic.
- - Closed its first deal as part of its PeopleSoft alliance.
- - In addition, Manhattan Associates announced that the appointment of Paul
Goodwin to the board of directors has been approved by the shareholders.
Mr. Goodwin has served as the vice chairman and chief financial officer of
CSX Corporation since April 2000. Prior to April 2000, Mr. Goodwin served
CSX Corporation as its executive vice president of finance and chief
financial officer. Separately, Manhattan Associates also announced that
John Hardesty has resigned from the board of directors, effective July 22,
2003, for personal reasons.
BUSINESS OUTLOOK FOR 2003
Manhattan Associates currently intends to publish, in each quarterly earnings
release, certain expectations with respect to future financial performance. The
following statements regarding future financial performance are based on current
expectations. 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, 2003,
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 Business
Outlook section as still being Manhattan Associates' current expectation on
matters covered, unless Manhattan
Associates publishes a notice stating otherwise. The public should not rely on
previously published expectations during 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,
presently scheduled for the third or fourth week of October 2003.
For the year ending December 31, 2003, Manhattan Associates currently expects to
achieve adjusted earnings, which excludes the Kmart recovery, restructuring
charge and the amortization of acquisition-related intangibles in the range of
$0.82 to $0.92 per fully diluted share and GAAP earnings per share of $0.75 to
$0.85 per fully diluted share. These expectations assume that the current
general economic and capital spending environment will improve modestly over the
balance of the year.
ABOUT MANHATTAN ASSOCIATES, INC.
Manhattan Associates, Inc., is the global leader in providing supply chain
execution solutions. We enable operational excellence through our warehousing
and distribution, transportation and trading partner management applications.
These integrated solutions leverage state-of-the-art technologies, innovative
practices and our domain expertise to enhance performance, profitability and
competitive advantage. Manhattan Associates has licensed more than 870 customers
representing more than 1,300 facilities worldwide, which include some of the
world's leading manufacturers, distributors and retailers. For more information
about Manhattan Associates, visit www.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 and general economic conditions. Additional factors are set forth
in "Safe Harbor Compliance Statement for Forward-Looking Statements" included as
Exhibit 99.1 to the Company's Annual Report on Form 10-K for the year ended
December 31, 2002. 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2003 2002 2003 2002
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue:
Software and hosting fees ............................. $ 11,357 $ 10,239 $ 21,516 $ 19,612
Services .............................................. 33,385 28,152 63,625 54,557
Hardware and other .................................... 5,455 6,722 11,153 13,087
Recovery relating to bankrupt customer ................ 848 -- 848 --
-------- -------- -------- --------
Total revenue ..................................... 51,045 45,113 97,142 87,256
Costs and Expenses:
Cost of software and hosting fees ..................... 1,222 470 2,345 862
Cost of services ...................................... 14,084 11,808 26,850 23,430
Cost of hardware and other ............................ 4,629 5,539 9,556 10,859
Research and development .............................. 7,007 5,387 13,761 10,244
Sales and marketing ................................... 8,608 6,994 16,180 12,750
General and administrative ............................ 5,869 5,307 11,603 10,401
Amortization of acquisition-related intangibles ....... 825 534 1,588 1,068
Restructuring charge .................................. 893 -- 893 --
-------- -------- -------- --------
Total costs and expenses .......................... 43,137 36,039 82,776 69,614
-------- -------- -------- --------
Operating income ........................................... 7,908 9,074 14,366 17,642
Other income, net .......................................... 1,055 1,014 1,612 1,187
-------- -------- -------- --------
Income before income taxes ................................. 8,963 10,088 15,978 18,829
Income tax provision ....................................... 3,174 3,839 5,649 7,073
-------- -------- -------- --------
Net income ................................................. $ 5,789 $ 6,249 $ 10,329 $ 11,756
======== ======== ======== ========
Basic net income per share ................................. $ 0.20 $ 0.22 $ 0.35 $ 0.41
======== ======== ======== ========
Diluted net income per share ............................... $ 0.19 $ 0.20 $ 0.34 $ 0.38
======== ======== ======== ========
Weighted average number of shares:
Basic .................................................. 29,332 28,687 29,206 28,427
======== ======== ======== ========
Diluted ................................................ 30,688 30,753 30,564 30,617
======== ======== ======== ========
Reconciliation of Adjusted Net Income:
Net income ................................................. $ 5,789 $ 6,249 $ 10,329 $ 11,756
Amortization of acquisition-related intangibles ............ 825 534 1,588 1,068
Recovery relating to bankrupt customer ..................... (848) -- (848) --
Restructuring charge ....................................... 893 -- 893 --
Income tax effect .......................................... (308) (203) (577) (401)
-------- -------- -------- --------
Adjusted net income ........................................ 6,351 6,580 11,385 12,423
======== ======== ======== ========
Adjusted net income per diluted share ...................... $ 0.21 $ 0.21 $ 0.37 $ 0.41
======== ======== ======== ========
-MORE-
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
2003 2002
-------- -------------
ASSETS
Current Assets:
Cash and cash equivalents .................................. $127,431 $ 64,664
Short-term investments ..................................... 4,015 57,193
Accounts receivable, net ................................... 33,375 32,384
Prepaid expenses and other current assets .................. 4,732 3,199
Deferred income taxes ...................................... 1,708 1,768
-------- --------
Total current assets ................................... 171,261 159,208
Long-term investments ........................................... 12,031 --
Property and equipment, net ..................................... 12,730 12,352
Intangible and other assets ..................................... 48,006 48,636
-------- --------
Total assets ........................................... $244,028 $220,196
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities ................... $ 17,396 $ 19,047
Current portion of capital lease obligations ............... 164 164
Deferred revenue ........................................... 20,203 15,318
-------- --------
Total current liabilities .............................. 37,763 34,529
Long-term portion of capital lease obligations .................. 126 240
Deferred income taxes ........................................... 213 141
Total shareholders' equity ...................................... 205,926 185,286
-------- --------
Total liabilities and shareholders' equity ................. $244,028 $220,196
======== ========
###