EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Matt Roberts
Investor Relations/Business Analysis Manager
678.597.7317
mroberts@manh.com
MANHATTAN ASSOCIATES REPORTS EARNINGS FOR THIRD QUARTER 2004
Final Earnings Meet Midpoint of October 7, 2004 Pre-Announcement
ATLANTA - OCTOBER 20, 2004 - Manhattan Associates(R), Inc. (Nasdaq: MANH), the
global leader in providing supply chain execution (SCE) and optimization
solutions, today announced final results for the third quarter ended September
30, 2004.
KEY QUARTERLY FINANCIAL HIGHLIGHTS FOR MANHATTAN ASSOCIATES INCLUDE:
- - Software and hosting fees for the quarter ended September 30, 2004, were
$10.3 million, an increase of 6% over the third quarter of 2003;
- - Services revenue for the quarter ended September 30, 2004, was a record
$36.8 million, an increase of 10% over the third quarter of 2003;
- - Core Revenue, consisting of license fees and services revenue, but
excluding hardware revenue and reimbursed travel, was $47.0 million, an
increase of 9% over the third quarter of 2003;
- - Total revenue for the quarter ended September 30, 2004, was $51.9 million,
an increase of 3% over the third quarter of 2003;
- - Net income for the quarter ended September 30, 2004, was $4.7 million, a
decrease of 7% from the third quarter of 2003;
- - Cash from operations for the quarter ended September 30, 2004, was $9.2
million, and total cash and investments was $173.0 million as of September
30, 2004;
- - International revenue for the quarter ended September 30, 2004, was $12.2
million, which represents 24% of total revenue in the third quarter; and
- - Six more RFID deals were booked in the quarter bringing our total number of
RFID customers to more than thirty.
GAAP net income was $4.7 million, or $0.15 per fully diluted share, for the
third quarter of 2004 compared to $5.0 million, or $0.16 per fully diluted
share, for the third quarter of 2003.
Adjusted net income for the third quarter of 2004, which excludes the
amortization of acquisition-related intangible assets, net of taxes, was $5.2
million, or $0.17 per fully diluted share. Adjusted net income for the third
quarter of 2003, which excludes the acquisition-related expenses and the
amortization of acquisition-related intangible assets, net of taxes, was $6.1
million, or $0.20 per fully diluted share.
The company provides adjusted net income and adjusted net income per share in
this press release as additional information regarding 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 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 36.6% for the third quarter of 2004.
"While I am disappointed with our EPS result from the third quarter, we were
quite successful in a number of areas during the quarter," said Pete Sinisgalli,
president and chief executive officer. "Our services revenue was a new record
and was ten percent greater than the prior year. In addition, our core revenue
posted nine percent growth over the prior year's third quarter. Most important,
customer satisfaction continued to improve and we made substantial progress in
delivering our Integrated Logistics Solutions(TM)."
OTHER SIGNIFICANT ACHIEVEMENTS DURING THE QUARTER INCLUDE:
- - Securing new customer wins at companies such as British Land Company PLC;
Distribudora Flexi, S.A. de C.V.; Hewlett-Packard Oy; Follett Higher
Education Group, Ltd.; Genco Distribution System, Inc,; Global Home
Products; Japan Logistics Development Co., Ltd.; K.K. IT Frontier; Nippon
Express USA, Inc.; Ready Pac Produce, Inc.; Sinopharm Logistics Co. Ltd.;
The Cato Corporation; The Forzani Group Ltd.; and Urban Outfitters, Inc.;
- - Expanding customer relationships with companies Alco Industries; Deschenes
Group, Inc.; Dollar General Corporation; Excell Home Fashions, Inc; Jockey
International, Inc.; Newell Rubbermaid, Inc.; Olympus America, Inc.; Pearl,
Incorporated; Perry Ellis International; Raley's; Robinson Manufacturing;
Scholastic Inc.; and Sodimac S.A.;
- - Achieving incorporation of Manhattan Associates Software Company Limited in
China, Manhattan Associates K.K. in Japan and Manhattan Associates Software
Pte. Ltd. in Singapore;
- - Launching EPC Manager as part of our RFID in a Box(TM) solution. This
standalone solution captures and tracks unique EPC read data and is
designed to operate independent of other applications so that it can be
implemented in conjunction with existing third party, custom or legacy
systems; and
- - Continuing stock buy back program with $3.7 million bought back during the
third quarter.
Business Outlook for 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 include 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 December 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 first week of February 2005.
For the quarter ending December 31, 2004, Manhattan Associates currently expects
to achieve adjusted earnings, which excludes the amortization of
acquisition-related intangibles in the range of to $0.17 to $0.21 per fully
diluted share and GAAP earnings per share of $0.15 to $0.19 per fully diluted
share. "We believe our target for adjusted earnings per share of $0.17 to $0.21
allows us to continue to invest in our long-term future and deliver solid
profits in the near term," said Sinisgalli.
ABOUT MANHATTAN ASSOCIATES
Manhattan Associates, Inc., is the global leader in providing supply chain
execution and optimization solutions. It enables operational excellence through
its warehouse, transportation, distributed order management, reverse logistics
and trading partner management applications, as well as its RFID, performance
management and event management capabilities. These Integrated Logistics
Solutions(TM) 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 900 customers
representing more than 1,600 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, 2003. 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 INCOME
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ---------------------------
2004 2003 2004 2003
---------- --------- ----------- -----------
(unaudited) (unaudited)
Revenue:
Software and hosting fees ..................... $ 10,257 $ 9,636 $ 36,347 $ 31,152
Services ...................................... 36,759 33,546 106,693 97,171
Hardware and other ............................ 4,853 7,045 16,092 18,198
Recovery relating to bankrupt customer ........ -- -- -- 848
--------- --------- --------- ---------
Total revenue ............................. 51,869 50,227 159,132 147,369
Costs and Expenses:
Cost of software and hosting fees ............. 977 1,027 2,650 3,372
Cost of services .............................. 17,009 13,911 48,628 40,761
Cost of hardware and other .................... 4,211 6,016 13,860 15,572
Research and development ...................... 7,281 6,822 22,084 20,583
Sales and marketing ........................... 8,062 7,276 24,924 23,456
General and administrative .................... 6,642 6,041 19,453 17,644
Amortization of acquisition-related intangibles 894 866 2,655 2,454
Acquisition-related expenses .................. -- 885 -- 885
Restructuring charge .......................... -- -- -- 893
--------- --------- --------- ---------
Total costs and expenses .................. 45,076 42,844 134,254 125,620
--------- --------- --------- ---------
Operating income ................................... 6,793 7,383 24,878 21,749
Other income, net .................................. 540 402 1,233 2,014
--------- --------- --------- ---------
Income before income taxes ......................... 7,333 7,785 26,111 23,763
Income tax provision ............................... 2,683 2,795 9,164 8,444
--------- --------- --------- ---------
Net income ......................................... $ 4,650 $ 4,990 $ 16,947 $ 15,319
========= ========= ========= =========
Basic net income per share ......................... $ 0.16 $ 0.17 $ 0.56 $ 0.52
========= ========= ========= =========
Diluted net income per share ....................... $ 0.15 $ 0.16 $ 0.54 $ 0.50
========= ========= ========= =========
Weighted average number of shares:
Basic .......................................... 29,891 29,750 30,110 29,389
========= ========= ========= =========
Diluted ........................................ 30,787 31,208 31,214 30,746
========= ========= ========= =========
Reconciliation of Adjusted Net Income:
Net income ......................................... $ 4,650 $ 4,990 $ 16,947 $ 15,319
Amortization of acquisition-related intangibles .... 894 866 2,655 2,454
Recovery relating to bankrupt customer ............. -- -- -- (848)
Acquisition-related expenses ....................... -- 885 -- 885
Restructuring charge ............................... -- -- -- 893
Income tax effect .................................. (327) (629) (934) (1,206)
--------- --------- --------- ---------
Adjusted net income ................................ $ 5,217 $ 6,112 $ 18,668 $ 17,497
========= ========= ========= =========
Adjusted net income per diluted share .............. $ 0.17 $ 0.20 $ 0.60 $ 0.57
========= ========= ========= =========
-more-
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2004 2003
------------- -------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents ............................. $130,558 $140,964
Short-term investments ................................ 18,625 4,992
Accounts receivable, net .............................. 44,149 40,790
Prepaid expenses and other current assets ............. 5,959 4,627
Deferred income taxes ................................. 3,655 2,086
-------- --------
Total current assets .............................. 202,946 193,459
Long-term investments ...................................... 23,823 9,447
Property and equipment, net ................................ 12,351 12,152
Intangible and other assets ................................ 47,700 48,961
-------- --------
Total assets ...................................... $286,820 $264,019
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities .............. $ 15,308 $ 17,024
Current portion of capital lease obligations .......... 150 132
Deferred revenue ...................................... 22,102 17,937
-------- --------
Total current liabilities ......................... 37,560 35,093
Long-term portion of capital lease obligations ............. 183 288
Deferred income taxes ...................................... 381 396
Total shareholders' equity ................................. 248,696 228,242
-------- --------
Total liabilities and shareholders' equity ............ $286,820 $264,019
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