MANHATTAN ASSOCIATES, INC.
United States
Securities And Exchange Commission
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 3, 2006
Manhattan Associates, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
|
|
Georgia
(State or Other Jurisdiction of
Incorporation or organization)
|
|
0-23999
(Commission File Number)
|
|
58-2373424
(I.R.S. Employer Identification No.) |
2300 Windy Ridge Parkway, Suite 700, Atlanta, Georgia
30339
(Address of Principal Executive Offices)
(Zip Code)
(770) 955-7070
(Registrants telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing in intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
1
Item 2.02 Results of Operations and Financial Condition.
On April 3, 2006, Manhattan Associates, Inc. (the Company) issued a press release providing
the preliminary results for its financial performance for the first quarter ended March 31, 2006.
A copy of this press release is attached as Exhibit 99.1. Pursuant to General Instruction B.2 of
Form 8-K, this exhibit is furnished and not filed for purposes of Section 18 of the Securities
Exchange Act of 1934.
The press release includes, as additional information regarding our operating results, our
adjusted net income per share, which excludes the impact of acquisition-related costs and the
amortization thereof, the recapture of previously recognized transaction tax expense, and stock
option expense under FAS 123R, all net of income tax effects. Adjusted net income per share is not
in accordance with, or an alternative for, net income per share under generally accepted accounting
principles in the United States (GAAP) and may be different from non-GAAP net income per share
measures used by other companies. Non-GAAP financial measures should not be used as a substitute
for, or considered superior to, measures of financial performance prepared in accordance with the
GAAP.
We believe that these adjusted (non-GAAP) results provide more meaningful information
regarding those aspects of our current operating performance that can be effectively managed and
consequently have developed our internal reporting, compensation and planning systems using these
measures.
|
|
|
Because we sporadically engage in strategic acquisitions, we incur
acquisition-related costs that consist of primarily expenses from accounting and
legal due diligence incurred whether or not we ultimately proceed with the
transaction. Additionally, we might assume and incur certain unusual costs, such
as employee retention benefits, that result from arrangements made prior to the
acquisition. These acquisition costs are practically difficult to predict and do
not correlate to the expenses of our core operations. The amortization of
acquisition-related intangible assets is commonly excluded from the GAAP net income
per share by companies in our industry and we therefore exclude these amortization
costs to provide more relevant and meaningful comparisons of our operating results
with that of our competitors. |
|
|
|
|
Because we have recognized the full potential amount of the transaction (sales)
tax expense in prior periods, any recovery of that expense resulting from the
expiration of the state sales tax statutes or the collection of the taxes from our
customers would overstate the current period net income derived from our core
operations as the recovery is not a result of anything occurring within our control
during the current period. |
|
|
|
|
Because stock option expense under FAS 123R 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. The excluding the impact of FAS 123R in adjusted net income and
adjusted net income per share is consistent with our competitors and other
companies within our industry. |
For these reasons, we have developed our internal reporting, compensation and planning systems
using non-GAAP measures which adjust for these amounts.
We believe the reporting of adjusted net income per share facilitates investors understanding
of our historical operating trends, because it provide 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 the investors
with useful insight into our
2
profitability exclusive of unusual adjustments. While these adjusted items may not be
considered as non-recurring in nature in a strictly accounting sense, the management regards those
items as infrequent and not arising out of the ordinary course of business and finds it useful to
utilize a non-GAAP measure in evaluating the performance of our underlying core business.
We also believe that adjusted net income per share provides a basis for more relevant
comparisons to other companies in the industry and enables investors to evaluate our operating
performance in a manner consistent with our internal basis of measurement and also presents our
investors our operating results on the same basis as that used by our management. Management
refers to adjusted net income per share in making operating decisions because it provides
meaningful supplemental information regarding our operational performance and our ability to invest
in research and development and fund acquisitions and capital expenditures. In addition, adjusted
net income per share facilitates managements internal comparisons to our historical operating
results and comparisons to competitors operating results. Further, we rely on adjusted net income
per share information as a primary measure to review and assess the operating performance of our
company and our management team in connection with our executive compensation and bonus plans.
Since most of our employees are not directly involved with decisions surrounding acquisitions or
severance related activities and other items irrelevant to our core operations, we do not believe
it is appropriate and fair to have their incentive compensation affected by these items. By
adjusting those items not indicative of ongoing operating results, the non-GAAP financial measure
could serve as an alternative useful measure to evaluate our prospect for future performance
because our investors are able to more conveniently predict the results of our operating activities
on an on-going basis when excluding these less common items.
Investors should be aware that this non-GAAP measure has inherent limitations, including its
variance from certain of the financial measurement principals underlying GAAP, should not be
considered as a replacement for net income per share, and should be read only in conjunction with
our consolidated financial statements prepared in accordance with GAAP. For instance, we exclude
the charges of the acquisition-related costs and the related amortization while we still retain the
acquisition-related benefits and revenue in calculation of the non-GAAP adjusted net income per
share. In addition, we exclude the employee compensation, which is commonly considered integral to
a companys operation performance. This supplemental non-GAAP information should not be construed
as an inference that the Companys future results will be unaffected by similar adjustments to net
earnings determined in accordance with GAAP.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release, dated April 3, 2006.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
Manhattan Associates, Inc.
|
|
|
By: |
/s/ Dennis B. Story
|
|
|
|
Dennis B. Story |
|
|
|
Senior Vice President and Chief Financial Officer |
|
|
Dated: April 3, 2006
4
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Description |
99.1
|
|
Press Release, dated April 3, 2006. |
5
EX-99.1 PRESS RELEASE DATED APRIL 3, 2006
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Manhattan Associates Announces Preliminary First Quarter Results
ATLANTA April 3, 2006 Leading supply chain solutions provider, Manhattan Associates
(Nasdaq: MANH), today announced preliminary earnings per share for the quarter ended March 31,
2006. GAAP earnings per share are expected to be in the range of $0.05 to $0.07 per share and
adjusted earnings per share are expected to be in the range of $0.14 to $0.16 per share. Adjusted
earnings per share exclude the impact of acquisition-related costs and the amortization thereof,
the recapture of previously recognized transaction tax expense, stock option expense under FAS
123R, and the amortization of prepaid retention bonuses associated with the acquisition of
Evant, all net of income taxes.
Our results in the quarter were impacted by delays in closing software sales, said Pete
Sinisgalli, Manhattan Associates president and CEO. While disappointed with the EPS result for
the quarter, our services business continues to perform well and overall our business is healthy.
Our full-year EPS expectations are not changed as a result of the delays in closing software
sales.
First quarter results are preliminary, subject to the companys management and independent auditors
completing their customary quarterly closing and review procedures.
Manhattan Associates is scheduled to release its first quarter results on April 25, 2006.
Adjustments to GAAP Earnings per share:
|
|
|
|
|
|
|
Diluted EPS |
|
Q1 |
|
(1) |
|
Purchase amortization |
|
$ |
0.03 |
|
(2) |
|
Evant retention bonuses |
|
$ |
0.02 |
|
(3) |
|
FAS 123R |
|
$ |
0.05 |
|
(4) |
|
Sales tax |
|
$ |
(0.01 |
) |
|
|
|
TOTAL |
|
$ |
0.09 |
|
These adjustments are preliminary estimates. A full reconciliation will be
provided with the April 25, 2006 earnings release.
(1) |
|
Tax adjusted purchase amortization from prior acquisitions;
effective rate 38.5%. |
|
(2) |
|
In conjunction with the Evant acquisition, Manhattan
Associates paid $2.8
million into escrow for employee retention
purposes. These funds are being distributed to employees upon
completion of up to 12 months of service
with Manhattan Associates. The amount is being expensed over the required
employee retention period. |
|
(3) |
|
The Company adopted FAS 123 (revised 2004) on January 1,
2006 using the modified prospective method.
FAS 123R requires the Company to expense stock options
issued to employees. Previously the Company
did not record compensation expense for employee stock options.
The Company expects the accounting required
by FAS 123R to reduce 2006 diluted earnings per share by
approximately $0.22 and will result in an
effective tax rate of 42.1% for 2006 GAAP earnings. |
|
(4) |
|
Sales tax represents recoveries of previously expensed sales tax
resulting from the expiration of the sales
tax audit statutes in certain states. |
About Manhattan Associates, Inc.
Manhattan Associates® is a leading supply chain solutions provider. The companys supply chain
planning, supply chain execution, business intelligence and business process platform capabilities
enable its more than 1200 customers worldwide to enhance profitability, performance and 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 factors are set forth in Safe
Harbor Compliance Statement for Forward-Looking Statements included as Exhibit 99.1 to the
Companys Annual Report on Form 10-K for the year ended December 31, 2005. 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.