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8-K - FORM 8-K - MANHATTAN ASSOCIATES INCc15712e8vk.htm
Exhibit 99.1
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Contact:
  Dennis Story   Will Haraway
 
  Chief Financial Officer   Senior Manager, Media Relations
 
  Manhattan Associates, Inc.   Manhattan Associates, Inc.
 
  678-597-7115   678-597-7466
 
  dstory@manh.com   wharaway@manh.com
Manhattan Associates Reports First Quarter
2011 Revenue and Earnings


Raises Outlook for Full-year Earnings Per Share
ATLANTA — April 19, 2011 — Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported first quarter 2011 non-GAAP adjusted diluted earnings per share of $0.41 compared to $0.40 in the first quarter of 2010, on license revenue of $7.8 million and total revenue of $71.7 million. First quarter 2011 GAAP earnings per share were $0.32, equal to the prior year first quarter earnings per share.
Manhattan Associates President and CEO Pete Sinisgalli commented, “Overall we posted a solid quarter to start 2011. While license revenue was soft, services revenue was solid, our competitive win rate remains strong and our sales pipelines are attractive. As the global economy improves I expect our license revenue will grow significantly.  Based on our first quarter results and our view of the balance of 2011, we are raising our outlook for our full-year 2011 earnings per share by 10 cents per share on both a GAAP and non-GAAP basis over the outlook we shared in our 2010 year-end press release and conference call.” Sinisgalli concluded.
FIRST QUARTER 2011 FINANCIAL SUMMARY:
    Adjusted diluted earnings per share, a non-GAAP measure, was $0.41 in the first quarter of 2011, compared to $0.40 in the first quarter of 2010.
    GAAP diluted earnings per share remained unchanged at $0.32 per share for the first quarter of 2011 compared to the first quarter of 2010.
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    Consolidated revenue for the first quarter of 2011 was $71.7 million, compared to $73.9 million in the first quarter of 2010. License revenue was $7.8 million in the first quarter of 2011, compared to $14.2 million in the first quarter of 2010.
    Adjusted operating income, a non-GAAP measure, was $10.4 million in the first quarter of 2011, compared to $14.3 million in the first quarter of 2010.
    GAAP operating income for the first quarter of 2011 was $7.6 million, compared to $11.5 million in the first quarter of 2010.
    Adjusted and GAAP income tax expense for the first quarter of 2011 includes a $2.0 million tax benefit resulting from the release of a valuation allowance associated with a change in India tax law. The benefit is attributable to the elimination of the tax holiday for Indian companies under the STPI “Software Technology Park of India” tax plan, based on the recent budget proposed by the India Finance Ministry, which will allow the Company to utilize tax assets previously reserved.
    Cash flow from operations was $8.1 million in the first quarter of 2011, compared to $13.9 million in the first quarter of 2010. Days Sales Outstanding were 57 days at March 31, 2011, compared to 61 days at December 31, 2010.
    Cash and investments on-hand at March 31, 2011 was $118.6 million, compared to $126.9 million at December 31, 2010.
    The Company repurchased approximately 826,000 common shares under the share repurchase program authorized by the Board of Directors, totaling $25.6 million at an average share price of $31.01 in the first quarter of 2011. In April 2011, the Board of Directors approved raising the Company’s remaining share repurchase authority from $24.4 million to $50.0 million of Manhattan Associates outstanding common stock.
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: ATB-Market LTD; Baihong; Masscash (Pty) Limited; Chanel, Inc.; China DRTV; Federal-Mogul Corporation; Monoprice, Inc.; and Office Depot Mexico.
    Expanding partnerships with existing customers such as: A.N. Deringer, Inc.; Anna’s Linens; Christian Dior Perfumes LLC on behalf of LVMH Affiliates; Denso Europe B.V.; Fitness Quest; Gulf State Toyota; Harlequin Sales Corporation; Marketing Services by Vectra; Northern Tool and Equipment Co., Inc.; Panalpina Management AG; Pacific Sunwear of California, Inc.; Performance Team Freight Systems, Inc.; Radiant Group (Pty) Ltd.; Retail Brand Alliance, Inc.; Sara Lee Corporation; Southern Wine & Spirits of America, Inc.; Super Retail Group; The Beistle Company; The Harvard Drug Group LLC and Wineworks Marlborough Ltd.
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2011 GUIDANCE
Manhattan Associates provided the following revenue and diluted earnings per share guidance for the full year 2011. As detailed in Note 8 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
    1.87       1.92       18 %     22 %
GAAP earnings per share
    1.55       1.60       24 %     28 %
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 June 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 July 2011.
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CONFERENCE CALL
The Company’s conference call regarding its first quarter 2011 financial results will be held at 4:30 p.m. Eastern Time on Tuesday, April 19, 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 53582954 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’ second 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 March 31, 2011.
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 equity-based compensation — all net of income tax effects and unusual tax adjustments. A reconciliation of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.
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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 organisations 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. Forward-looking statements in this press release include any predictions concerning confidence or improvements in the global economy, predictions of future growth in Manhattan Associates’ software license revenue and the information set forth under “2011 Guidance.” 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: uncertainty about the global economy; delays in product development; competitive pressures; software errors; and additional risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. 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 March 31,  
    2011     2010  
    (unaudited)  
Revenue:
               
Software license
  $ 7,762     $ 14,207  
Services
    56,078       53,461  
Hardware and other
    7,870       6,281  
 
           
Total revenue
    71,710       73,949  
Costs and expenses:
               
Cost of license
    1,239       1,549  
Cost of services
    24,958       24,064  
Cost of hardware and other
    6,300       5,069  
Research and development
    10,383       10,440  
Sales and marketing
    10,600       10,468  
General and administrative
    8,676       8,461  
Depreciation and amortization
    2,001       2,415  
 
           
Total costs and expenses
    64,157       62,466  
 
           
Operating income
    7,553       11,483  
Other income (loss), net
    18       (498 )
 
           
Income before income taxes
    7,571       10,985  
Income tax provision
    405       3,790  
 
           
Net income
  $ 7,166     $ 7,195  
 
           
 
               
Basic earnings per share
  $ 0.34     $ 0.33  
Diluted earnings per share
  $ 0.32     $ 0.32  
 
               
Weighted average number of shares:
               
Basic
    21,027       21,958  
Diluted
    22,079       22,535  

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES
(in thousands, except per share amounts)
                 
    Three Months Ended March 31,  
    2011     2010  
 
               
Operating income
  $ 7,553     $ 11,483  
Equity-based compensation (a)
    2,409       2,585  
Purchase amortization (b)
    439       638  
Sales tax recoveries (c)
          (420 )
 
           
Adjusted operating income (Non-GAAP)
  $ 10,401     $ 14,286  
 
           
 
               
Income tax provision
  $ 405     $ 3,790  
Equity-based compensation (a)
    807       892  
Purchase amortization (b)
    147       220  
Sales tax recoveries (c)
          (145 )
Unusual tax adjustments (d)
    106        
 
           
Adjusted income tax provision (Non-GAAP)
  $ 1,465     $ 4,757  
 
           
 
               
Net income
  $ 7,166     $ 7,195  
Equity-based compensation (a)
    1,602       1,693  
Purchase amortization (b)
    292       418  
Sales tax recoveries (c)
          (275 )
Unusual tax adjustments (d)
    (106 )      
 
           
Adjusted net income (Non-GAAP)
  $ 8,954     $ 9,031  
 
           
 
               
Diluted EPS
  $ 0.32     $ 0.32  
Equity-based compensation (a)
    0.07       0.08  
Purchase amortization (b)
    0.01       0.02  
Sales tax recoveries (c)
          (0.01 )
Unusual tax adjustments (d)
           
 
           
Adjusted diluted EPS (Non-GAAP)
  $ 0.41     $ 0.40  
 
           
 
               
Fully diluted shares
    22,079       22,535  
(a)   Beginning in 2011, to be consistent with other companies in the software industry, we began to report adjusted results excluding all equity-based compensation. The equity-based compensation is included in the following GAAP operating expense lines for the three months ended March 31, 2011 and 2010:
                 
    Three Months Ended March 31,  
    2011     2010  
Cost of services
  $ 347     $ 337  
Research and development
    372       372  
Sales and marketing
    586       698  
General and administrative
    1,104       1,178  
 
           
Total equity-based compensation
  $ 2,409     $ 2,585  
 
           
(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)   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.
 
(d)   For the quarter ended March 31, 2011, the adjustment represents a tax benefit from disqualifying dispositions of incentive stock options that were previously expensed. As discussed above, we excluded equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry. Therefore, we also excluded the related tax benefit generated upon their disposition.

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
                 
    March 31, 2011     December 31, 2010  
    (unaudited)        
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 111,643     $ 120,744  
Short term investments
    6,072       4,414  
Accounts receivable, net of allowance of $4,729 and $5,711 in 2011 and 2010, respectively
    45,213       47,419  
Deferred income taxes
    7,476       7,214  
Income taxes receivable
    2,562       2,446  
Prepaid expenses and other current assets
    7,949       6,743  
 
           
Total current assets
    180,915       188,980  
 
               
Property and equipment, net
    14,640       14,833  
Long-term investments
    909       1,711  
Goodwill, net
    62,277       62,265  
Acquisition-related intangible assets, net
    747       1,186  
Deferred income taxes
    9,643       8,816  
Other assets
    2,713       2,673  
 
           
Total assets
  $ 271,844     $ 280,464  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
  $ 6,815     $ 7,745  
Accrued compensation and benefits
    11,491       19,807  
Accrued and other liabilities
    12,680       13,856  
Deferred revenue
    52,139       44,974  
 
           
Total current liabilities
    83,125       86,382  
 
               
Other non-current liabilities
    10,089       10,282  
 
               
Shareholders’ equity:
               
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2011 or 2010
           
Common stock, $.01 par value; 100,000,000 shares authorized; 21,619,572 and 21,729,789 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
    216       217  
Additional paid-in capital
          487  
Retained earnings
    179,355       184,152  
Accumulated other comprehensive loss
    (941 )     (1,056 )
 
           
Total shareholders’ equity
    178,630       183,800  
 
           
Total liabilities and shareholders’ equity
  $ 271,844     $ 280,464  
 
           

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    Three Months Ended March 31,  
    2011     2010  
    (unaudited)  
Operating activities:
               
Net income
  $ 7,166     $ 7,195  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    2,001       2,415  
Stock compensation
    2,409       2,585  
(Gain) loss on disposal of equipment
    (1 )     1  
Tax benefit of stock awards exercised/vested
    1,199       176  
Excess tax benefits from stock-based compensation
    (689 )     (129 )
Deferred income taxes
    (1,070 )     164  
Unrealized foreign currency loss
    52       229  
Changes in operating assets and liabilities:
               
Accounts receivable, net
    2,439       (4,867 )
Other assets
    (1,210 )     (2,375 )
Accounts payable, accrued and other liabilities
    (10,894 )     3,738  
Income taxes
    (102 )     1,155  
Deferred revenue
    6,804       3,572  
 
           
Net cash provided by operating activities
    8,104       13,859  
 
           
 
               
Investing activities:
               
Purchase of property and equipment
    (1,338 )     (1,177 )
Net (purchases) maturities of investments
    (842 )     99  
 
           
Net cash used in investing activities
    (2,180 )     (1,078 )
 
           
 
               
Financing activities:
               
Purchase of common stock
    (27,581 )     (15,938 )
Proceeds from issuance of common stock from options exercised
    11,522       3,081  
Excess tax benefits from stock-based compensation
    689       129  
 
           
Net cash used in financing activities
    (15,370 )     (12,728 )
 
           
 
               
Foreign currency impact on cash
    345       141  
 
           
 
               
Net change in cash and cash equivalents
    (9,101 )     194  
Cash and cash equivalents at beginning of period
    120,744       120,217  
 
           
Cash and cash equivalents at end of period
  $ 111,643     $ 120,411  
 
           

 

 


 

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1.   GAAP and Adjusted earnings (loss) per share by quarter are as follows:
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
GAAP Diluted EPS
  $ 0.32     $ 0.36     $ 0.28     $ 0.29     $ 1.25     $ 0.32  
Adjustments to GAAP:
                                               
Equity-based compensation
    0.08       0.07       0.08       0.08       0.30       0.07  
Purchase amortization
    0.02       0.02       0.02       0.01       0.07       0.01  
Sales tax recoveries
    (0.01 )     (0.02 )                 (0.04 )      
Unusual tax adjustments
          (0.01 )                 (0.01 )      
 
                                   
Adjusted Diluted EPS
  $ 0.40     $ 0.42     $ 0.38     $ 0.38     $ 1.58     $ 0.41  
 
                                   
2.   Revenues and operating income (loss) by reportable segment are as follows (in thousands):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
Revenue:
                                               
Americas
  $ 61,889     $ 64,875     $ 62,555     $ 59,631     $ 248,950     $ 60,185  
EMEA
    7,989       8,587       8,266       7,324       32,166       8,336  
APAC
    4,071       4,179       3,193       4,558       16,001       3,189  
 
                                   
 
  $ 73,949     $ 77,641     $ 74,014     $ 71,513     $ 297,117     $ 71,710  
 
                                   
 
                                               
GAAP Operating Income (Loss):
                                               
Americas
  $ 10,333     $ 9,836     $ 8,121     $ 7,578     $ 35,868     $ 7,087  
EMEA
    418       1,530       1,214       523       3,685       909  
APAC
    732       651       277       714       2,374       (443 )
 
                                   
 
  $ 11,483     $ 12,017     $ 9,612     $ 8,815     $ 41,927     $ 7,553  
 
                                   
 
                                               
Adjustments (pre-tax):
                                               
Americas:
                                               
Equity-based compensation
  $ 2,585     $ 2,502     $ 2,620     $ 2,713     $ 10,420     $ 2,409  
Purchase amortization
    638       639       571       439       2,287       439  
Sales tax recoveries
    (420 )     (792 )                 (1,212 )      
 
                                   
 
  $ 2,803     $ 2,349     $ 3,191     $ 3,152     $ 11,495     $ 2,848  
 
                                   
 
                                               
Adjusted non-GAAP Operating Income (Loss):
                                               
Americas
  $ 13,136     $ 12,185     $ 11,312     $ 10,730     $ 47,363     $ 9,935  
EMEA
    418       1,530       1,214       523       3,685       909  
APAC
    732       651       277       714       2,374       (443 )
 
                                   
 
  $ 14,286     $ 14,366     $ 12,803     $ 11,967     $ 53,422     $ 10,401  
 
                                   
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):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
Professional services
  $ 33,960     $ 34,349     $ 33,349     $ 30,213     $ 131,871     $ 35,184  
Customer support and software enhancements
    19,501       20,431       20,137       21,810       81,879       20,894  
 
                                   
Total services revenue
  $ 53,461     $ 54,780     $ 53,486     $ 52,023     $ 213,750     $ 56,078  
 
                                   
4.   Hardware and other revenue includes the following items (in thousands):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Hardware revenue
  $ 4,518     $ 5,053     $ 5,763     $ 4,612     $ 19,946     $ 5,504  
Billed travel
    1,763       2,323       2,673       2,212       8,971       2,366  
 
                                   
Total hardware and other revenue
  $ 6,281     $ 7,376     $ 8,436     $ 6,824     $ 28,917     $ 7,870  
 
                                   

 

 


 

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
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):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Revenue
  $ 1,053     $ (72 )   $ (548 )   $ (217 )   $ 216     $ 282  
Costs and expenses
    1,346       235       (262 )     (26 )     1,293       386  
 
                                   
Operating income
    (293 )     (307 )     (286 )     (191 )     (1,077 )     (104 )
Foreign currency gains (losses) in other income
    (415 )     187       (436 )           (664 )     (207 )
 
                                   
 
  $ (708 )   $ (120 )   $ (722 )   $ (191 )   $ (1,741 )   $ (311 )
 
                                   
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):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Operating income
  $ (395 )   $ (340 )   $ (180 )   $ (181 )   $ (1,096 )   $ (53 )
Foreign currency gains (losses) in other income
    (289 )     246       (302 )     64       (281 )     (112 )
 
                                   
Total impact of changes in the Indian Rupee
  $ (684 )   $ (94 )   $ (482 )   $ (117 )   $ (1,377 )   $ (165 )
 
                                   
6.   Other (expense) income includes the following components (in thousands):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Interest income
  $ 80     $ 109     $ 252     $ 195     $ 636     $ 225  
Foreign currency (losses) gains
    (415 )     187       (436 )           (664 )     (207 )
Other non-operating (expense) income
    (163 )     8       (4 )     44       (115 )      
 
                                   
Total other (expense) income
  $ (498 )   $ 304     $ (188 )   $ 239     $ (143 )   $ 18  
 
                                   
7.   Effective Tax Rate Reconciliation for GAAP and Adjusted Results (in thousands except tax rate and per share data):
                                         
    Three Months Ended March 31, 2011  
    Income before     Income tax                     Effective Tax  
    income taxes     provision     Net income     Diluted EPS     Rate  
 
                                       
GAAP results before tax adjustments
  $ 7,571     $ 2,536     $ 5,035     $ 0.23       33.5 %
Release of India valuation allowance (a)
          (2,025 )     2,025       0.09          
Disqualifying dispositions of incentive stock options (b)
          (106 )     106                
 
                             
GAAP results- reported
  $ 7,571     $ 405     $ 7,166     $ 0.32       5.4 %
 
                             
 
                                       
Adjusted results before tax adjustments
  $ 10,419     $ 3,490     $ 6,929     $ 0.31       33.5 %
Release of India valuation allowance (a)
          (2,025 )     2,025       0.09          
 
                             
Adjusted results- reported
  $ 10,419     $ 1,465     $ 8,954     $ 0.41       14.1 %
 
                             
(a)   Our subsidiary in India had a tax holiday under Software Technology Park of India Plan through March 2011. Late in the first quarter of 2011, the tax authorities in India announced that the tax holiday would not be extended. This decision eliminated uncertainty as to our ability to realize a tax credit carry-forward and other deferred tax assets. Therefore, we released the corresponding valuation allowance of approximately $2.0 million.
 
(b)   The adjustment represents a tax benefit from disqualifying dispositions of incentive stock options that were previously expensed.
8.   Beginning in 2011, to be consistent with other companies in the software industry, we began to report 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  

 

 


 

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
                                                                                 
    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  
9.   Total equity-based compensation is as follows (in thousands except per share amounts):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Stock options
  $ 1,178     $ 901     $ 853     $ 860     $ 3,792     $ 512  
Restricted stock
    1,407       1,601       1,767       1,853       6,628       1,897  
 
                                   
Total equity-based compensation
    2,585       2,502       2,620       2,713       10,420       2,409  
Income tax provision
    892       863       904       955       3,614       807  
 
                                   
Net income
  $ 1,693     $ 1,639     $ 1,716     $ 1,758     $ 6,806     $ 1,602  
 
                                   
Diluted earnings per share
  $ 0.08     $ 0.07     $ 0.08     $ 0.08     $ 0.30     $ 0.07  
 
                                               
Diluted earnings per share — stock options
  $ 0.03     $ 0.03     $ 0.03     $ 0.02     $ 0.11     $ 0.02  
Diluted earnings per share — restricted stock
  $ 0.04     $ 0.05     $ 0.05     $ 0.05     $ 0.19     $ 0.06  
10.   Capital expenditures are as follows (in thousands):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Capital expenditures
  $ 1,177     $ 1,529     $ 1,625     $ 1,541     $ 5,872     $ 1,338  
 
                                   
11.   Stock Repurchase Activity (in thousands):
                                                 
    2010     2011  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Full Year     1st Qtr  
 
                                               
Shares purchased under publicly-announced buy-back program
    595       869       573       680       2,717       826  
Shares withheld for taxes due upon vesting of restricted stock
    39       3       3       4       49       65  
 
                                   
Total shares purchased
    634       872       576       684       2,766       891  
 
                                               
Total cash paid for shares purchased under publicly-announced buy-back program
  $ 15,000     $ 25,000     $ 15,446     $ 21,023     $ 76,469     $ 25,621  
Total cash paid for shares withheld for taxes due upon vesting of restricted stock
    938       84       94       119       1,235       1,960  
 
                                   
Total cash paid for shares repurchased
  $ 15,938     $ 25,084     $ 15,540     $ 21,142     $ 77,704     $ 27,581