EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Matt Roberts
Investor Relations/Business Analysis Manager
678.597.7317
mroberts@manh.com
MANHATTAN ASSOCIATES ANNOUNCES FINANCIAL RESULTS FOR THE FOURTH
QUARTER OF 2003
Record Software and Hosting Fees of $12.1 million
ATLANTA - FEBRUARY 10, 2004 - Manhattan Associates(R), Inc. (Nasdaq: MANH), the
global leader in providing supply chain execution (SCE) solutions, today
announced results for the fourth quarter ended December 31, 2003.
KEY QUARTERLY FINANCIAL HIGHLIGHTS FOR MANHATTAN ASSOCIATES INCLUDE:
- - Software and hosting fees for the quarter ended December 31, 2003, was
a record $12.1 million, an increase of 14% over the fourth quarter of
2002.
- - Services revenue for the quarter ended December 31, 2003, was $32.1
million, an increase of 17% over the fourth quarter of 2002. The
services' gross margin remained strong at 58%.
- - Total revenue for the quarter ended December 31, 2003, was $49.4
million, an increase of 14% over the fourth quarter of 2002, excluding
the Kmart recovery.
GAAP net income was $6.5 million or $0.21 per fully diluted share for the fourth
quarter of 2003 compared to $7.5 million or $0.25 per fully diluted share for
its fourth quarter of 2002.
Adjusted net income for the fourth quarter of 2003, which excludes the
amortization of acquisition-related intangible assets, net of taxes, was a
record $7.2 million, or $0.23 per fully
diluted share. Adjusted net income for the fourth quarter of 2002, which
excludes the Kmart recovery, in-process research and development charge and the
amortization of acquisition-related intangible assets, net of taxes, was $7.0
million, or $0.23 per fully diluted share.
For the year ended December 31, 2003, total revenue was a record $196.8 million,
with core revenue, which excludes hardware resales, increasing approximately 14%
over the prior year. GAAP net income was $21.8 million, or $0.71 per fully
diluted share for the year ended December 31, 2003. Adjusted net income for the
year ended December 31, 2003, which excludes a $0.8 million Kmart recovery,
acquisition-related expenses, restructuring charge and the amortization of
acquisition-related intangible assets, net of taxes, was $24.7 million, or $0.80
per fully diluted share. Adjusted net income for 2002, which excludes a $2.3
million Kmart recovery, in-process research and development charge and the
amortization of acquisition-related intangible assets, net of taxes, was $25.8
million, or $0.85 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 non-GAAP net income and non-GAAP per share measures used by other
companies. 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 was 31.4% for the fourth quarter of 2003
and 34.3% for the year ended December 31, 2003.
"We are very pleased with the record fourth quarter and our overall strong
performance in 2003," said Richard Haddrill, Manhattan Associates president and
CEO. "The quarter's record license and hosting fees show strong demand for our
solutions. With the improving overall economic climate, our improved
international results and our strategic investments in 2003, we are in a
powerful position as we enter 2004."
OTHER KEY HIGHLIGHTS FOR MANHATTAN ASSOCIATES INCLUDE THE FOLLOWING:
- - Signed key new United States based customers in the quarter, including
Ability Tri-Modal; Acushnet Company; Harold's Stores, Inc.; Metron
North America; New York & Company, Group Inc.; Plaid Enterprises, Inc.;
Raley's; and Red Envelope, Inc.
- - Signed key new international customers including Clarks; Electronic
Data Systems; Hagar hf; TDG plc; Transports Graveleau; and Wella.
- - Expanded its partnerships with many existing United States based
clients, including American Eagle Outfitters; ARAMARK Uniform and
Career Apparel, Inc.; Cabela's Incorporated; McKesson Canada Corp.;
Taro Pharmaceutical; TNT Logistics North America, Inc.; USF
Corporation; and Wolverine Worldwide.
- - Expanded its partnerships with many existing international clients
including Exel plc; Halfords, Healthcare Logistics Ltd; NYK; and Office
Depot.
- - Unveiled its Integrated Logistics Solution for Retail, a new
retail-specific solution that utilizes the modules of its SCE
applications to create a comprehensive offering to manage the movement
of goods from source to consumption.
- - Received INDUSTRYWEEK's Technologies of the Year for 2003 award for its
"RFID in a Box"(TM)solution.
- - Named to Forbes' Best of the Web B2B list for 2003.
- - Completed the acquisition of Streamsoft LLC's slotting optimization
assets.
- - Completed the acquisition of distributed order management software
developer Avere, Inc. in January of 2004.
- - Launched corporate product branding in Europe, aligning North American
and European product branding to reflect core Transportation Management
Systems (TMS), Trading Partner Management (TPM) and Warehouse
Management Systems (WMS) nomenclature.
BUSINESS OUTLOOK FOR FIRST QUARTER 2004
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, which includes a modestly improving spending environment for
information technology. 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 15, 2004, 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 fourth week of April 2004.
For the year ending December 31, 2004, Manhattan Associates currently expects to
achieve adjusted earnings, which excludes the amortization of
acquisition-related intangibles in the range of $0.91 to $1.04 per fully diluted
share and GAAP earnings per share of $0.83 to $0.96 per fully diluted share.
These expectations assume that the current general economic and capital spending
environment will improve modestly over the course of the year.
ABOUT MANHATTAN ASSOCIATES
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 940 customers
representing more than 1,400 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, risks of international operations 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 Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
(unaudited) (unaudited)
Revenue:
Software and hosting fees ..................... $ 12,077 $ 10,583 $ 43,229 $ 40,233
Services ...................................... 32,149 27,552 129,320 110,516
Hardware and other ............................ 5,219 5,170 23,417 22,675
Recovery relating to bankrupt customer ........ -- 2,297 848 2,297
--------- --------- --------- ---------
Total revenue ............................. 49,445 45,602 196,814 175,721
Costs and Expenses:
Cost of software and hosting fees ............. 1,098 558 4,470 1,927
Cost of services .............................. 13,457 11,444 54,218 46,611
Cost of hardware and other .................... 4,551 4,474 20,123 19,027
Research and development ...................... 6,775 5,065 27,358 20,780
Sales and marketing ........................... 7,744 6,764 31,200 26,413
General and administrative .................... 6,067 5,393 23,711 20,943
Amortization of acquisition-related intangibles 978 170 3,432 1,772
Acquisition-related expenses .................. -- -- 885 --
Restructuring charge .......................... -- -- 893 --
In-process research and development charge .... -- 1,470 -- 1,470
--------- --------- --------- ---------
Total costs and expenses .................. 40,670 35,338 166,290 138,943
--------- --------- --------- ---------
Operating income ................................... 8,775 10,264 30,524 36,778
Other income, net .................................. 732 935 2,746 2,801
--------- --------- --------- ---------
Income before income taxes ......................... 9,507 11,199 33,270 39,579
Income tax provision ............................... 2,981 3,731 11,425 14,383
--------- --------- --------- ---------
Net income ......................................... $ 6,526 $ 7,468 $ 21,845 $ 25,196
========= ========= ========= =========
Basic net income per share ......................... $ 0.22 $ 0.26 $ 0.74 $ 0.88
========= ========= ========= =========
Diluted net income per share ....................... $ 0.21 $ 0.25 $ 0.71 $ 0.83
========= ========= ========= =========
Weighted average number of shares:
Basic ......................................... 29,957 28,873 29,532 28,653
========= ========= ========= =========
Diluted ....................................... 31,341 30,323 30,882 30,451
========= ========= ========= =========
Reconciliation of Adjusted Net Income:
Net income ......................................... $ 6,526 $ 7,468 $ 21,845 $ 25,196
Amortization of acquisition-related intangibles .... 978 170 3,432 1,772
Recovery relating to bankrupt customer ............. -- (2,297) (848) (2,297)
Acquisition-related expenses ....................... -- -- 885 --
Restructuring charge ............................... -- -- 893 --
In-process research and development charge ......... -- 1,470 -- 1,470
Income tax effect .................................. (307) 219 (1,498) (343)
--------- --------- --------- ---------
Adjusted net income ................................ $ 7,197 $ 7,030 $ 24,709 $ 25,798
========= ========= ========= =========
Adjusted net income per diluted share .............. $ 0.23 $ 0.23 $ 0.80 $ 0.85
========= ========= ========= =========
-MORE-
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents .............................. $140,964 $ 64,664
Short-term investments ................................. 4,992 57,193
Accounts receivable, net ............................... 40,790 32,384
Prepaid expenses and other current assets .............. 4,627 3,199
Deferred income taxes .................................. 2,086 1,768
-------- --------
Total current assets ............................... 193,459 159,208
Long-term investments ....................................... 9,447 --
Property and equipment, net ................................. 12,152 12,352
Intangible and other assets ................................. 48,961 48,636
-------- --------
Total assets ....................................... $264,019 $220,196
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities ............... $ 17,024 $ 19,047
Current portion of capital lease obligations ........... 132 164
Deferred revenue ....................................... 17,937 15,318
-------- --------
Total current liabilities .......................... 35,093 34,529
Long-term portion of capital lease obligations .............. 288 240
Deferred income taxes ....................................... 396 141
Total shareholders' equity .................................. 228,242 185,286
-------- --------
Total liabilities and shareholders' equity ............. $264,019 $220,196
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