ATLANTA, April 20, 2010 (GLOBE NEWSWIRE) -- Leading supply chain optimization provider Manhattan Associates, Inc. (Nasdaq:MANH) today reported record first quarter 2010 non-GAAP adjusted diluted earnings per share of $0.36 compared to $0.07 in the first quarter of 2009, on license revenue of $14.2 million and total revenue of $73.9 million. GAAP earnings per share were a record $0.32 compared to earnings of $0.01 per share in the prior year first quarter.
Manhattan Associates President and CEO Pete Sinisgalli commented, "We posted strong operating results in the first quarter of 2010 and are pleased with the market's enthusiasm for the latest releases of our platform-based Supply Chain Optimization solutions."
FIRST QUARTER 2010 FINANCIAL SUMMARY:
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Adjusted diluted earnings per share, a non-GAAP measure, was $0.36 in the first quarter of 2010, compared to $0.07 in the first quarter of 2009.
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The Company reported GAAP diluted earnings per share of $0.32, compared to $0.01 in the first quarter of 2009.
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Consolidated revenue for the first quarter of 2010 was $73.9 million, compared to $60.8 million in the first quarter of 2009. License revenue was $14.2 million in the first quarter of 2010, compared to $4.9 million in the first quarter of 2009.
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Adjusted operating income, a non-GAAP measure, was $12.9 million in the first quarter of 2010, compared to $2.8 million in the first quarter of 2009.
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GAAP operating income for the first quarter of 2010 was $11.5 million compared to $0.6 million in the first quarter of 2009.
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Cash flow from operations was $13.9 million in the first quarter of 2010, compared to $12.7 million in the first quarter of 2009. Days Sales Outstanding were 53 days at March 31, 2010, compared to 56 days at December 31, 2009.
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Cash and investments on-hand at March 31, 2010 was $123.1 million compared to $123.0 million at December 31, 2009.
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The Company repurchased approximately 595,000 common shares totaling $15.0 million at an average share price of $25.21 in the first quarter of 2010, self-funded from cash flow provided from operations.
- In April 2010, the Board of Directors approved raising the Company's remaining share repurchase authority from $10.0 million to $25.0 million of Manhattan Associates outstanding common stock.
SALES ACHIEVEMENTS:
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Recognized four contracts of $1.0 million or more in license revenue during the quarter.
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Completed software license wins with new customers such as BodyBuilding.com, LLC, Bon Preu SAU, Beijing Pacific Logistics Co., Devanlay SA, Dubois Chemicals, Inc., Hawaii Transfer Co., Kawasaki-Rikuso Transportation Co., Leroy Merlin France SA, Panther Expedited Services, Inc., Sanitex ,Shanghai Shenda Logistics Co. and Syms Corporation.
- Expanded partnerships with existing customers such as APL Co., Archbrook Laguna, Bulova Corporation, Catering Engros A/S, Devil-Dog Mfg. Co., DHL Supply Chain Asia Pacific, DSW, Inc., ERC, Gordon Trucking, Inc., Jefferson Smurfit Corporation, Morris & Dickson Co., O'Reilly Automotive, Performance Team Freight Systems, Inc., PETsMart, Inc., Prime Success International Group, Rocky Brands, Inc., SFI Food Sdn Bhd and Sigma Aldrich.
CONFERENCE CALL
The Company's conference call regarding its first quarter financial results will be held at 4:30 p.m. Eastern Time on Tuesday, April 20, 2010. Investors are invited to listen to a live Web cast of the conference call through the investor relations section of Manhattan Associates' Web site at www.manh.com. 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 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 64254359 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 2010 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, 2010.
The non-GAAP adjusted operating income, adjusted net income and adjusted earnings per share measures exclude the impact of acquisition-related costs and the amortization thereof, the recapture of previously recognized sales tax expense, stock option expense, and restructuring charges, all net of income tax effects. A reconciliation of the Company's GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.
ABOUT MANHATTAN ASSOCIATES, INC.
Manhattan Associates continues to deliver on its 20-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 organizations 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. 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. Forward-looking statements contained in this press release include, among other statements, any statements expressing general optimism about the Company's prospects for the balance of the fiscal year. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the global economic downturn; disruptions in credit markets; 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, 2009. 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 OPERATIONS | |||
| (in thousands, except per share amounts) | |||
| Three Months Ended March 31, | |||
| 2010 | 2009 | ||
| (unaudited) | |||
| Revenue: | |||
| Software license | $ 14,207 | $ 4,922 | |
| Services | 53,461 | 50,843 | |
| Hardware and other | 6,281 | 5,060 | |
| Total revenue | 73,949 | 60,825 | |
| Costs and expenses: | |||
| Cost of license | 1,549 | 1,424 | |
| Cost of services | 24,064 | 23,157 | |
| Cost of hardware and other | 5,069 | 4,121 | |
| Research and development | 10,440 | 10,227 | |
| Sales and marketing | 10,468 | 10,079 | |
| General and administrative | 8,461 | 7,962 | |
| Depreciation and amortization | 2,415 | 3,165 | |
| Restructuring charge | -- | 63 | |
| Total costs and expenses | 62,466 | 60,198 | |
| Operating income | 11,483 | 627 | |
| Other expense, net | (498) | (233) | |
| Income before income taxes | 10,985 | 394 | |
| Income tax provision | 3,790 | 132 | |
| Net income | $ 7,195 | $ 262 | |
| Basic earnings per share | $ 0.33 | $ 0.01 | |
| Diluted earnings per share | $ 0.32 | $ 0.01 | |
| Weighted average number of shares: | |||
| Basic | 21,958 | 23,017 | |
| Diluted | 22,535 | 23,058 | |
| MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES | |||
| RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES | |||
| (in thousands, except per share amounts) | |||
|
Three Months Ended March 31, |
|||
| 2010 | 2009 | ||
| Operating income | $ 11,483 | $ 627 | |
| Stock option expense (a) | 1,178 | 1,400 | |
| Purchase amortization (b) | 638 | 741 | |
| Restructuring charge (c) | -- | 63 | |
| Sales tax recoveries (d) | (420) | -- | |
| Adjusted operating income (Non-GAAP) | $ 12,879 | $ 2,831 | |
| Income tax provision (benefit) | $ 3,790 | $ 132 | |
| Stock option expense (a) | 406 | 469 | |
| Purchase amortization (b) | 220 | 248 | |
| Restructuring charge (c) | -- | 21 | |
| Sales tax recoveries (d) | (145) | -- | |
| Adjusted income tax provision (Non-GAAP) | $ 4,271 | $ 870 | |
| Net income | $ 7,195 | $ 262 | |
| Stock option expense (a) | 772 | 931 | |
| Purchase amortization (b) | 418 | 493 | |
| Restructuring charge (c) | -- | 42 | |
| Sales tax recoveries (d) | (275) | -- | |
| Adjusted net income (Non-GAAP) | $ 8,110 | $ 1,728 | |
| Diluted EPS | $ 0.32 | $ 0.01 | |
| Stock option expense (a) | 0.03 | 0.04 | |
| Purchase amortization (b) | 0.02 | 0.02 | |
| Restructuring charge (c) | -- | -- | |
| Sales tax recoveries (d) | (0.01) | -- | |
| Adjusted diluted EPS (Non-GAAP) | $ 0.36 | $ 0.07 | |
| Fully diluted shares | 22,535 | 23,058 | |
| (a) Because stock option expense is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control, the impact of such expense is not subject to effective management by us. Thus, we have excluded the impact of this expense from adjusted non-GAAP results. The stock option expense is included in the following GAAP operating expense lines for the three months ended March 31, 2010 and 2009: | |||
|
Three Months Ended March 31, |
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| 2010 | 2009 | ||
| Cost of services | $ 139 | $ 133 | |
| Research and development | 166 | 213 | |
| Sales and marketing | 320 | 447 | |
| General and administrative | 553 | 607 | |
| Total stock option expense | $ 1,178 | $ 1,400 | |
| (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) We recorded additional employee severance expense of $63,000 in the first quarter of 2009 related to the restructuring action taken in the fourth quarter of 2008. We do not believe that the restructuring charge is common cost that resulted from normal operating activities. Consequently, we have excluded this charge from adjusted non-GAAP results. | |||
| (d) Adjustment represents recovery of previously expensed sales tax resulting from a sales tax audit refund. Because we have recognized the full potential amount of the sales tax expense in prior periods, any recovery of that expense 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 this recovery from adjusted non-GAAP results. | |||
| MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except per share amounts) | ||
| March 31, 2010 | December 31, 2009 | |
| (unaudited) | ||
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 120,411 | $ 120,217 |
| Accounts receivable, net of allowance of $5,619 and $4,943 in 2010 and 2009, respectively | 42,561 | 37,945 |
| Deferred income taxes | 5,755 | 5,745 |
| Prepaid expenses and other current assets | 6,611 | 4,847 |
| Total current assets | 175,338 | 168,754 |
| Property and equipment, net | 15,193 | 15,759 |
| Long-term investments | 2,699 | 2,797 |
| Acquisition-related intangible assets, net | 2,835 | 3,473 |
| Goodwill, net | 62,268 | 62,280 |
| Deferred income taxes | 9,642 | 9,826 |
| Other assets | 2,453 | 1,822 |
| Total assets | $ 270,428 | $ 264,711 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 5,615 | $ 4,434 |
| Accrued compensation and benefits | 15,190 | 12,855 |
| Accrued and other liabilities | 15,216 | 15,430 |
| Deferred revenue | 40,717 | 37,436 |
| Income taxes payable | 1,953 | 796 |
| Total current liabilities | 78,691 | 70,951 |
| Other non-current liabilities | 10,629 | 10,395 |
| Shareholders' equity: | ||
| Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2010 or 2009 | -- | -- |
| Common stock, $.01 par value; 100,000,000 shares authorized; 22,357,384 and 22,467,123 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively | 224 | 225 |
| Additional paid-in capital | -- | 2,892 |
| Retained earnings | 182,379 | 182,387 |
| Accumulated other comprehensive loss | (1,495) | (2,139) |
| Total shareholders' equity | 181,108 | 183,365 |
| Total liabilities and shareholders' equity | $ 270,428 | $ 264,711 |
| MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| (in thousands) | |||
| Three Months Ended March 31, | |||
| 2010 | 2009 | ||
| (unaudited) | |||
| Operating activities: | |||
| Net income | $ 7,195 | $ 262 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 2,415 | 3,165 | |
| Stock compensation | 2,585 | 2,318 | |
| Loss on disposal of equipment | 1 | 13 | |
| Tax benefit (deficiency) of stock awards exercised/vested | 176 | (901) | |
| Excess tax benefits from stock based compensation | (129) | (2) | |
| Deferred income taxes | 164 | 637 | |
| Unrealized foreign currency loss | 229 | 421 | |
| Changes in operating assets and liabilities: | |||
| Accounts receivable, net | (4,867) | 17,381 | |
| Other assets | (2,375) | (626) | |
| Accounts payable, accrued and other liabilities | 3,738 | (11,562) | |
| Income taxes | 1,155 | (1,924) | |
| Deferred revenue | 3,572 | 3,523 | |
| Net cash provided by operating activities | 13,859 | 12,705 | |
| Investing activities: | |||
| Purchase of property and equipment | (1,177) | (873) | |
| Net maturies of investments | 99 | 24 | |
| Net cash used in investing activities | (1,078) | (849) | |
| Financing activities: | |||
| Purchase of common stock | (15,938) | (10,484) | |
| Proceeds from issuance of common stock from options exercised | 3,081 | 210 | |
| Excess tax benefits from stock based compensation | 129 | 2 | |
| Net cash used in financing activities | (12,728) | (10,272) | |
| Foreign currency impact on cash | 141 | (1,055) | |
| Net change in cash and cash equivalents | 194 | 529 | |
| Cash and cash equivalents at beginning of period | 120,217 | 85,739 | |
| Cash and cash equivalents at end of period | $ 120,411 | $ 86,268 | |
| MANHATTAN ASSOCIATES, INC. | ||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||
| 1. GAAP and Adjusted Earnings per share by quarter are as follows: | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| GAAP Diluted EPS | $ 0.01 | $ (0.02) | $ 0.50 | $ 0.26 | $ 0.73 | $ 0.32 | ||||
| Adjustments to GAAP: | ||||||||||
| Stock option expense | 0.04 | 0.03 | 0.04 | 0.04 | 0.15 | 0.03 | ||||
| Purchase amortization | 0.02 | 0.02 | 0.02 | 0.02 | 0.09 | 0.02 | ||||
| Restructuring charge | -- | 0.12 | -- | -- | 0.11 | -- | ||||
| Sales tax recoveries | -- | -- | -- | -- | -- | (0.01) | ||||
| Unusual tax adjustments | -- | -- | (0.12) | -- | (0.12) | -- | ||||
| Adjusted Diluted EPS | $ 0.07 | $ 0.14 | $ 0.43 | $ 0.31 | $ 0.96 | $ 0.36 | ||||
| 2. Revenues and operating income (loss) by reportable segment are as follows (in thousands): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Revenue: | ||||||||||
| Americas | $ 50,827 | $ 47,372 | $ 55,626 | $ 52,733 | $ 206,558 | $ 61,889 | ||||
| EMEA | 7,030 | 7,818 | 6,527 | 6,650 | 28,025 | 7,989 | ||||
| APAC | 2,968 | 3,219 | 3,141 | 2,756 | 12,084 | 4,071 | ||||
| $ 60,825 | $ 58,409 | $ 65,294 | $ 62,139 | $ 246,667 | $ 73,949 | |||||
| GAAP Operating Income (Loss): | ||||||||||
| Americas | $ 260 | $ (407) | $ 10,736 | $ 10,859 | $ 21,448 | $ 10,333 | ||||
| EMEA | 738 | 1,124 | 20 | (789) | 1,093 | 418 | ||||
| APAC | (371) | (1,143) | 299 | (184) | (1,399) | 732 | ||||
| $ 627 | $ (426) | $ 11,055 | $ 9,886 | $ 21,142 | $ 11,483 | |||||
| Adjustments (pre-tax): | ||||||||||
| Americas: | ||||||||||
| Stock option expense | $ 1,400 | $ 1,010 | $ 1,369 | $ 1,374 | $ 5,153 | $ 1,178 | ||||
| Purchase amortization | 741 | 741 | 741 | 741 | 2,964 | 638 | ||||
| Restructuring charge | 59 | 2,960 | -- | -- | 3,019 | -- | ||||
| Sales tax recoveries | -- | -- | -- | -- | -- | (420) | ||||
| $ 2,200 | $ 4,711 | $ 2,110 | $ 2,115 | $ 11,136 | $ 1,396 | |||||
| EMEA: | ||||||||||
| Restructuring charge | -- | 20 | -- | -- | $ 20 | -- | ||||
| $ -- | $ 20 | $ -- | $ -- | $ 20 | $ -- | |||||
| APAC: | ||||||||||
| Restructuring charge | 4 | 849 | -- | (10) | $ 843 | -- | ||||
| $ 4 | $ 849 | $ -- | $ (10) | $ 843 | $ -- | |||||
| Total Adjustments | $ 2,204 | $ 5,580 | $ 2,110 | $ 2,105 | $ 11,999 | $ 1,396 | ||||
| Adjusted non-GAAP Operating Income (Loss): | ||||||||||
| Americas | $ 2,460 | $ 4,304 | $ 12,846 | $ 12,974 | $ 32,584 | $ 11,729 | ||||
| EMEA | 738 | 1,144 | 20 | (789) | 1,113 | 418 | ||||
| APAC | (367) | (294) | 299 | (194) | (556) | 732 | ||||
| $ 2,831 | $ 5,154 | $ 13,165 | $ 11,991 | $ 33,141 | $ 12,879 | |||||
| 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): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Professional services | $ 32,345 | $ 30,767 | $ 27,158 | $ 22,500 | $ 112,770 | $ 33,960 | ||||
| Customer support and software enhancements | 18,498 | 18,655 | 19,759 | 20,168 | 77,080 | 19,501 | ||||
| Total services revenue | $ 50,843 | $ 49,422 | $ 46,917 | $ 42,668 | $ 189,850 | $ 53,461 | ||||
| 4. Hardware and other revenue includes the following items (in thousands): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Hardware revenue | $ 3,080 | $ 2,992 | $ 5,086 | $ 3,474 | $ 14,632 | $ 4,518 | ||||
| Billed travel | 1,980 | 1,869 | 1,931 | 1,719 | 7,499 | 1,763 | ||||
| Total hardware and other revenue | $ 5,060 | $ 4,861 | $ 7,017 | $ 5,193 | $ 22,131 | $ 6,281 | ||||
| 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): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Revenue | $ (2,387) | $ (1,996) | $ (764) | $ 876 | $ (4,271) | $ 1,053 | ||||
| Costs and expenses | (3,307) | (2,560) | (1,286) | 1,205 | (5,948) | 1,346 | ||||
| Operating income | 920 | 564 | 522 | (329) | 1,677 | (293) | ||||
| Foreign currency gains (losses) in other income | (366) | (506) | 294 | (427) | (1,005) | (415) | ||||
| $ 554 | $ 58 | $ 816 | $ (756) | $ 672 | $ (708) | |||||
| 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): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Operating income | $ 1,129 | $ 800 | $ 458 | (249) | $ 2,138 | $ (395) | ||||
| Foreign currency gains (losses) in other income | 336 | (367) | 2 | (276) | (305) | (289) | ||||
| Total impact of changes in the Indian Rupee | $ 1,465 | $ 433 | $ 460 | $ (525) | $ 1,833 | $ (684) | ||||
| 6. Other income (expense) includes the following components (in thousands): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Interest income | $ 137 | $ 95 | $ 71 | $ 65 | $ 368 | $ 80 | ||||
| Foreign currency gains (losses) | (366) | (506) | 294 | (427) | (1,005) | (415) | ||||
| Other non-operating (expense) income | (4) | 7 | (110) | (12) | (119) | (163) | ||||
| Total other income (expense) | $ (233) | $ (404) | $ 255 | $ (374) | $ (756) | $ (498) | ||||
| 7. Capital expenditures are as follows (in thousands): | ||||||||||
| 2009 | 2010 | |||||||||
| 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | 1st Qtr | |||||
| Capital expenditures | $ 873 | $ 487 | $ 366 | $ 652 | $ 2,378 | $ 1,177 | ||||
| 8. Stock Repurchase Activity | ||||||||||
| During 2010, we repurchased approximately 595,000 shares of common stock totaling $15.0 million at an average price of $25.21. In 2009, we repurchased approximately 1.4 million shares of common stock totaling $22.8 million at an average price of $16.63. | ||||||||||