ATLANTA, Oct. 23, 2007 (PRIME NEWSWIRE) -- Leading supply chain solutions provider Manhattan Associates, Inc. (Nasdaq:MANH), today reported record third quarter 2007 revenue and earnings and raised its Earnings Per Share (EPS) guidance for the year. Manhattan Associates' third quarter GAAP diluted earnings per share were $0.29, a 53% increase over the third quarter of 2006 on revenue of $84.6 million, a 17% increase. On a non-GAAP basis, adjusted diluted earnings per share were $0.34, a 26% increase over the third quarter of 2006.
Third Quarter Financial Highlights
Summarized highlights of the 2007 third quarter results, as compared to the 2006 third quarter, follow.
* Consolidated revenue increased 17% to $84.6 million. Excluding
the impact of currency changes, revenue increased 16%.
-- License revenue totaled $17.3 million, an increase
of 14%.
-- Services revenue totaled $58.4 million, increasing 14%.
* GAAP Operating income increased 25% to $10.6 million. Excluding
the impact of currency changes, GAAP operating income increased
32%;
* Operating income, on a non-GAAP basis, increased 10% to $12.7
million. Excluding the impact of currency changes, operating
income on a non-GAAP basis increased 15%.
* GAAP diluted earnings per share increased 53% to $0.29.
* Adjusted diluted earnings per share increased 26% to $0.34 per
share.
* Appreciation of the Rupee (the company has a major research
and development center in India) and other currency changes
negatively impacted GAAP and adjusted operating income by
$0.6 million or $0.01 per share. The negative $0.01 impact
of currency changes on operating results was offset by $0.02
of foreign exchange gains in Other Income. The combined net
impact of currency appreciation and foreign exchange gains in
the quarter for GAAP and Adjusted EPS results was an increase
of $0.01 per diluted share.
* Cash Flow from Operations was $6.4 million, with Days Sales
Outstanding of 80 days.
* Cash and Investments on Hand at September 30, 2007 was $82.0
million.
* The Company repurchased 809,680 common shares totaling $22.2
million at an average share price of $27.37 in the quarter.
* The Board of Directors approved the repurchase of up to $50.0
million of Manhattan Associates' outstanding common stock.
The Board of Directors also appointed two additional members:
Pete Kight, Chairman and CEO of CheckFree Corporation, a
leading provider of financial e-commerce solutions; and Dan
Lautenbach, a 30-year veteran of technology solution
companies, primarily IBM, where he ran global software sales.
Year-To-Date Financial Highlights
Summarized highlights of the first nine months of 2007, as compared to the first nine months of 2006, follow.
* Consolidated revenue increased 19% to $252.4 million.
Excluding the impact of currency changes, revenue increased 17%.
-- License revenue was $54.5 million, increasing 15%.
-- Services revenue totaled $169.1 million, a 17% increase.
* GAAP operating income increased 41% to $31.5 million.
Excluding the impact of currency changes, GAAP operating
income increased 45%.
* On a non-GAAP basis, operating income increased 16% to $37.3
million. Excluding the impact of currency changes operating
income on a non-GAAP basis increased 19%.
* GAAP diluted earnings per share increased 54% to $0.80.
* Adjusted diluted earnings per share, on a non-GAAP basis,
increased 21% to $0.94.
* Appreciation of the Rupee and other currency changes
negatively impacted GAAP and adjusted operating income by
$1.0 million, or $0.02 per share. The negative $1.0 million
impact of currency changes on operating results was partially
offset by $0.3 million of foreign exchange gains in Other
Income. The combined net impact of currency appreciation
and foreign exchange gains on year-to-date GAAP and Adjusted
EPS results was a reduction of $0.02 per diluted share.
"The third quarter of 2007 marks our 12th consecutive quarter of double digit revenue growth," said Pete Sinisgalli, President and CEO. "Each of our three regions contributed to our solid license revenue growth and was profitable in the quarter. Importantly, more than half of our third quarter license revenue came from new customers as we continue to capture market share from competitors. Moreover, our forecast for the fourth quarter is strong. Therefore, we are increasing our adjusted EPS guidance range by 2 cents on the low end and by 3 cents on the high end to a revised range of $1.29 to $1.34," he added.
Significant sales-related achievements during the quarter follow.
* New customers such as: 3 Suisses; ASICS America Corporation;
Barnes Distribution; Bed, Bath & Beyond; Blackhawk Products
Group; Citi Trends, Inc.; Domaxel; Dalepak Limited; Elecon;
Electronics for Imaging, Inc.; ElektroKomplektServis;
Fitness Quest, Inc.; Gloria Jeans; H E Butt Grocery (HEB);
Jefferson Smurfit Corporation; Lamps Plus, Inc.; National
Freight, Inc.; Nelson Education Limited; Nestle Nespresso SA;
Nor-Cal Beverage Co., Inc.; Northern Safety Co., Inc.;
Orchard Brands, Inc. (aka Blair Corp); Performance
Warehouse; Reckitt Benckiser, Inc; Restoration Hardware;
Safeway, Inc.; Target Corporation; The Apparel Group; and The
Tire Rack, Inc.
* Expanding partnerships with existing customers such as:
Always; Argos Limited; Fruit of the Loom Limited; Tesco
Stores Limited; and US Foodservice.
* Closing four large contracts, each of which generated $1
million or more in recognized license revenue.
2007 Guidance
Manhattan Associates provided the following diluted earnings per share guidance for the fourth quarter and full year 2007. The GAAP diluted earnings per share includes the impact of stock options expense under SFAS 123(R). A full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.
Fully Diluted EPS
--------------------------------
Per Share range % Growth range
-------------- --------------
GAAP Earnings Per Share
-----------------------
Q4 2007 - diluted earnings per share $0.30 $0.35 76% 106%
Full year 2007 - diluted earnings
per share $1.09 $1.14 58% 65%
Adjusted Earnings Per Share
---------------------------
Q4 2007 - diluted earnings per share $0.35 $0.40 13% 29%
Full year 2007 - diluted earnings
per share $1.29 $1.34 19% 24%
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 December 15, 2007, 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 2007 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 first week of February 2008.
Conference Call
The Company's conference call regarding its third quarter financial results will be held at 4:30 p.m. Eastern time on Tuesday, October 23, 2007 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 will be available shortly after the call by dialing +1.800.642.1687 in the U.S. or Canada and +1.706.645.9291 outside the U.S., and entering the conference identification number 16923337, 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 archived at Manhattan Associates' Web site.
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. The 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 this presentation of adjusted operating income, adjusted net income and adjusted earnings per share facilitates investors' understanding of our historical operating trends, because it provides important supplemental measurement information in evaluating the operating results of our business, as distinct from results that include items that are not indicative of ongoing operating results, and thus provide investors with useful insight into our profitability exclusive of unusual adjustments. This release should be read in conjunction with our Form 8-K earnings release filing for the quarter ended September 30, 2007.
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). A reconciliation of our GAAP financial measures to non-GAAP adjustments is included in the supplemental attachment to this release.
The Company also provides revenue, GAAP and adjusted operating income, and GAAP and adjusted diluted earnings per share excluding the impact of foreign currency exchange. This information is not in accordance with -- or an alternative for -- GAAP, and may be different from measures used by other companies. The Company believes that this information allows a more meaningful comparison of the Company's performance from period to period.
About Manhattan Associates, Inc.
Manhattan Associates(r) provides global supply chain solutions to organizations that consider supply chain software, processes and technology strategic to market leadership. The company's software portfolio includes five key Supply Chain Solution Suites: Planning and Forecasting, Inventory Optimization, Order Lifecycle Management, Transportation Lifecycle Management and Distribution Management. These solution suites are enhanced by Platform Applications -- including Supply Chain Intelligence, Supply Chain Visibility and Supply Chain Event Management -- that organize and deliver the information and processes needed to optimize supply chains across functions and locations within and outside an enterprise.. A Supply Chain Process Platform provides a unifying architecture that fosters agility and scalability while minimizing solution implementation, evolution and support costs. More than 1,200 customers worldwide use Manhattan Associates' global supply chain solutions to enhance profitability and build sustainable competitive advantage. For more information, please 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 risk factors are set forth in Item 1A. of the Company's Annual Report on Form 10-K for the year ended December 31, 2006. 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
CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
-------- -------- -------- --------
Revenue:
License $ 17,303 $ 15,217 $ 54,454 $ 47,540
Services 58,437 51,049 169,100 144,642
Hardware and other 8,849 6,046 28,854 20,816
-------- -------- -------- --------
Total Revenue 84,589 72,312 252,408 212,998
Costs and Expenses:
Cost of license 1,599 1,400 4,045 4,410
Cost of services 28,348 24,231 81,631 69,908
Cost of hardware and
other 7,286 5,356 24,511 18,328
Research and development 11,887 9,765 35,316 30,398
Sales and marketing 13,079 11,407 40,177 34,018
General and
administrative 8,397 7,896 24,926 21,863
Depreciation and
amortization 3,406 3,377 10,261 9,914
Asset impairment charge -- 270 -- 270
Acquisition-related
charges -- 174 -- 1,503
-------- -------- -------- --------
Total costs and
expenses 74,002 63,876 220,867 190,612
-------- -------- -------- --------
Operating income 10,587 8,436 31,541 22,386
Other income, net 1,619 630 3,009 2,727
-------- -------- -------- --------
Income before income
taxes 12,206 9,066 34,550 25,113
Income tax provision 4,321 3,822 12,253 10,596
-------- -------- -------- --------
Net income $ 7,885 $ 5,244 $ 22,297 $ 14,517
======== ======== ======== ========
Basic earnings per share $ 0.31 $ 0.19 $ 0.84 $ 0.53
Diluted earnings per
share $ 0.29 $ 0.19 $ 0.80 $ 0.52
Weighted average number
of shares:
Basic 25,739 26,969 26,536 27,151
Diluted 26,879 27,462 27,723 27,688
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1. GAAP and Adjusted Earnings per share by quarter are as follows:
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
GAAP
Diluted
EPS $ 0.08 $ 0.25 $ 0.19 $ 0.17 $ 0.19 $ 0.32 $ 0.29
Adjust-
ments
to GAAP:
Stock
option
ex-
pense $ 0.04 $ 0.06 $ 0.05 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Purchase
amorti-
zation $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Acq-
uisition
related
charg-
es $ 0.02 $ 0.01 $ -- $ -- $ -- $ -- $ --
Write
off
of
receiv-
able
and
settle-
ment
charg-
es $ -- $ -- $ -- $ 0.09 $ -- $ -- $ --
Asset
impair-
ment
charge $ -- $ -- $ 0.01 $ -- $ -- $ -- $ --
Sales
tax
recover-
ies $ (0.01) $ (0.01) $ (0.01) $ (0.01) $ (0.01) $ (0.02) $ (0.01)
------- ------- ------- ------- ------- ------- -------
Adjusted
Diluted
EPS $ 0.16 $ 0.34 $ 0.27 $ 0.31 $ 0.23 $ 0.36 $ 0.34
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
GAAP
Diluted
EPS $ 0.52 $ 0.80
Adjustments
to GAAP:
Stock
option
expense $ 0.15 $ 0.08
Purchase
amortization $ 0.08 $ 0.08
Acquisition
related
charges $ 0.03 $ --
Write off
of
receivable
and
settlement
charges $ -- $ --
Asset
impairment
charge $ 0.01 $ --
Sales tax
recoveries $ (0.02) $ (0.03)
------- -------
Adjusted
Diluted
EPS $ 0.78 $ 0.94
======= =======
2. Revenues and operating income (loss) by reportable segment are as
follows (in thousands):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Revenue:
Amer-
icas $51,143 $65,695 $60,799 $64,683 $68,446 $75,599 $69,850
EMEA 6,952 6,850 6,478 7,071 5,844 9,809 10,463
Asia
Pacific 4,690 5,356 5,035 4,116 3,900 4,221 4,276
------- ------- ------- ------- ------- ------- -------
$62,785 $77,901 $72,312 $75,870 $78,190 $89,629 $84,589
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Revenue:
Americas $177,637 $213,895
EMEA 20,280 26,116
Asia
Pacific 15,081 12,397
------- -------
$212,998 $252,408
======= =======
GAAP
Operat-
ing
Income
(Loss):
Amer-
icas $ 2,467 $10,095 $ 9,131 $11,054 $ 8,734 $12,338 $ 8,894
EMEA 245 3 (839) (2,226) (1,321) 1,145 1,432
Asia
Pacific 401 739 144 (459) (131) 189 261
------- ------- ------- ------- ------- ------- -------
$ 3,113 $10,837 $ 8,436 $ 8,369 $ 7,282 $13,672 $10,587
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
GAAP
Operating
Income
(Loss):
Americas $21,693 $29,966
EMEA (591) 1,256
Asia
Pacific 1,284 319
------- -------
$22,386 $31,541
======= =======
Adjust-
ments
(pre-tax):
Americas:
Stock
option
ex-
pense $ 1,558 $ 1,819 $ 1,700 $ 1,177 $ 1,082 $ 1,090 $ 1,184
Purchase
amorti-
zation 1,217 1,217 1,217 1,217 1,195 1,195 1,180
Acq-
uisition
related
charges 722 607 174 -- -- -- --
Settle-
ment
charges -- -- -- 810 -- -- --
Asset
impair-
ment
charge -- -- 270 -- -- -- --
Sales tax
recov-
eries (267) (465) (324) (514) (373) (650) (269)
------- ------- ------- ------- ------- ------- -------
$ 3,230 $ 3,178 $ 3,037 $ 2,690 $ 1,904 $ 1,635 $ 2,095
------- ------- ------- ------- ------- ------- -------
EMEA:
Stock
option
ex-
pense $ 118 $ 125 $ 131 $ 15 $ 39 $ 40 $ 40
Write
off
of
receiv-
able
and
settle-
ment
char-
ges -- -- -- 2,046 -- -- --
------- ------- ------- ------- ------- ------- -------
$ 118 $ 125 $ 131 $ 2,061 $ 39 $ 40 $ 40
------- ------- ------- ------- ------- ------- -------
Total
Adjust-
ments $ 3,348 $ 3,303 $ 3,168 $ 4,751 $ 1,943 $ 1,675 $ 2,135
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Adjustments
(pre-tax):
Americas:
Stock
option
expense $ 5,077 $ 3,356
Purchase
amortization 3,651 3,570
Acquisition
related
charges 1,503 --
Settlement
charges -- --
Asset
impairment
charge 270 --
Sales tax
recoveries (1,056) (1,292)
------- -------
$ 9,445 $ 5,634
------- -------
EMEA:
Stock
option
expense $ 374 $ 119
Write off
of
receivable
and
settlement
charges --
------- -------
$ 374 $ 119
------- -------
Total
Adjustments $ 9,819 $ 5,753
======= =======
Adjusted
non-GAAP
Operat-
ing
Income
(Loss):
Amer-
icas $ 5,697 $13,273 $12,168 $13,744 $10,638 $13,973 $10,989
EMEA 363 128 (708) (165) (1,282) 1,185 1,472
Asia
Pacific 401 739 144 (459) (131) 189 261
------- ------- ------- ------- ------- ------- -------
$ 6,461 $14,140 $11,604 $13,120 $ 9,225 $15,347 $12,722
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Adjusted
non-GAAP
Operating
Income
(Loss):
Americas $31,138 $35,600
EMEA (217) 1,375
Asia
Pacific 1,284 319
------- -------
$32,205 $37,294
======= =======
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):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Profess-
ional
serv-
ices $31,801 $34,376 $36,105 $34,105 $38,831 $39,865 $41,488
Customer
support
and
software
enhance-
ments 13,361 14,055 14,944 15,774 15,969 15,998 16,949
------- ------- ------- ------- ------- ------- -------
Total
services
rev-
enue $45,162 $48,431 $51,049 $49,879 $54,800 $55,863 $58,437
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Professional
services
Customer
support
and
software
enhancements
$102,282 $120,184
Total
services
revenue
42,360 48,916
------- -------
$144,642 $169,100
======= =======
4. Hardware and other revenue includes the following items
(in thousands):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Hardware
revenue 4,471 5,424 3,326 4,967 6,666 7,270 5,614
Billed
Travel 2,076 2,799 2,720 2,021 2,971 3,098 3,235
------- ------- ------- ------- ------- ------- -------
Total
Hardware
and
other
rev-
enue $ 6,547 $ 8,223 $ 6,046 $ 6,988 $ 9,637 $10,368 $ 8,849
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Hardware
revenue $13,221 $19,550
Billed
Travel 7,595 9,304
------- -------
Total
Hardware
and
other
revenue $20,816 $28,854
======= =======
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):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Revenue $ (853) $ (158) $ 251 $ 779 $ 748 $ 992 $ 1,049
Costs
and
Expenses (823) (324) 53 1,030 858 1,306 1,629
Operating
Income (30) 166 198 (251) (110) (314) (580)
Foreign
currency
gains
(losses)
in other
income 98 275 (34) (91) (22) (602) 897
------- ------- ------- ------- ------- ------- -------
$ 68 $ 441 $ 164 $ (342) $ (132) $ (916) $ 317
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Revenue $ (760) $ 2,789
Costs and
Expenses (1,094) 3,793
Operating
Income 334 (1,004)
Foreign
currency
gains
(losses)
in other
income 339 273
------- -------
$ 673 $ (731)
======= =======
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):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Operating
Income 53 145 235 (32) (14) (443) (693)
Foreign
currency
gains
(losses)
in other
income (30) 25 87 (136) (82) (536) (312)
------- ------- ------- ------- ------- ------- -------
Total
impact
of
changes
in the
Indian
Rupee $ 23 $ 170 $ 322 $ (168) $ (96) $ (979) $(1,005)
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Operating
Income $ 433 $(1,150)
Foreign
currency
gains
(losses)
in other
income 82 (930)
------- -------
Total
impact
of
changes
in the
Indian
Rupee $ 515 $(2,080)
======= =======
6. Capital expenditures are as follows (in thousands):
2006 2007
---------------------------------- -------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
------- ------- ------- ------- ------- ------- -------
Capital
expen-
di-
tures $ 2,195 $ 2,603 $ 2,731 $ 2,112 $ 2,956 $ 3,511 $ 1,467
======= ======= ======= ======= ======= ======= =======
2006 2007
------- -------
YTD YTD
------- -------
Capital
expenditures $ 7,529 $ 7,934
======= =======
7. Stock Repurchase Activity
During the first nine months of 2007, we repurchased 2.7 million
shares of common stock totaling $75 million at an average price
of $28.10. In 2006 for the full year, we repurchased 0.8 million
shares of common stock totaling $16.0 million at an average cost
of $20.73.