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): February 2, 2010

Manhattan Associates, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Georgia		0-23999		58-2373424
(State or Other Jurisdiction of Incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

2300 Windy Ridge Parkway, Suite 1000, Atlanta, Georgia
30339
(Address of Principal Executive Offices)
(Zip Code)

(770) 955-7070
(Registrant’s 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 is 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))

 

 

Item 2.02 Results of Operations and Financial Condition.

     On February 2, 2010, Manhattan Associates, Inc. (the “Company”) issued a press release providing the results for its financial performance for the fourth quarter and full year ended December 31, 2009. 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.

     Non-GAAP Financial Measures in the Press Release

     The press release includes, as additional information regarding our operating results, our adjusted operating income, adjusted net income and adjusted earnings per share, which excludes the impact of acquisition-related costs and the amortization thereof, the recapture of previously recognized transaction tax expense, stock option expense, asset impairment charges, and restructuring charges, all net of income tax effects, and unusual tax adjustments. These various measures are not in accordance with, or an alternative for, financial measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) and may be different from similarly titled non-GAAP financial 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 GAAP.

     Adjusted Income and Earnings Per Share

     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. Non-GAAP measures used in the press release exclude the impact of acquisition-related costs, transaction tax expense recapture, stock option expense, asset impairment charges, restructuring charges and unusual tax adjustments for the following reasons:

	•		Because we sporadically engage in acquisitions, we incur acquisition-related costs that consist primarily of expenses from accounting and legal due diligence, 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 difficult to predict and do not correlate to the expenses of our core operations. We believe our competitors typically present as a non-GAAP measure adjusted net income and adjusted earnings per share that exclude the amortization of acquisition-related intangible assets, and thus we exclude these amortization costs when calculating adjusted net income and adjusted earnings per share to facilitate 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 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. We believe

excluding the impact of stock option expense in adjusted operating income, adjusted net income and adjusted earnings per share is consistent with similar practice by our competitors and other companies within our industry.

	•		We do not believe that the asset impairment charges recorded in the third quarter of 2008 are common costs that result from normal operating activities because, among reasons, the company does not regularly invest in the particular types of assets that were impaired. We do not include the impairments in the assessment of our operating performance.
	•		We do not believe that the restructuring charge incurred in 2009 and 2008 related to our reductions in force, or future restructuring charges related to staff reductions, are common costs that result from normal operating activities; rather, we believe these staff rationalizations relate to the extremely depressed economic conditions that have pervaded global markets since 2008. Thus, we have not included these restructuring charges in the assessment of our operating performance.
	•		Because we recorded the majority of income tax reserves through retained earnings in conjunction with the adoption of ASC 740, Income Taxes, on January 1, 2007, the release of those reserves during 2009 and 2008 due to the expiration of tax audit statutes for U.S. federal income tax returns filed for 2005 and prior years would overstate the current period net income derived from our core operations, as such release is not a result of anything occurring within our control during the current period. The reserve reversal during 2009 is partially offset by the establishment in tax reserves associated with the treatment of currency gains under the Company’s transfer pricing policy with one of its foreign subsidiaries. The reserve reversal during 2008 is partially offset by tax expense on the repatriation of cash from a foreign subsidiary associated with the settlement of several large intercompany balances in order to reduce the unrealized foreign exchange gain/loss volatility in other income. The majority of the large intercompany balances were associated with a non-operating legal entity in Europe.

     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 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 the investors with useful insight into our profitability exclusive of unusual adjustments. While these adjusted items may not be considered as non-recurring in nature in a strictly accounting sense, 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 operating income, adjusted net income and adjusted earnings per share provide a basis for more relevant comparisons to other companies in the industry, enable investors to evaluate our operating performance in a manner consistent with our internal basis of measurement and also present our investors our operating results on the same basis as that used by our management. Management refers to adjusted operating income, adjusted net income and adjusted earnings per share in making operating decisions because we believe they provide 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 operating income, adjusted net income and

adjusted earnings per share facilitate management’s internal comparisons to our historical operating results and comparisons to competitors’ operating results.

     Further, we rely on adjusted operating income, adjusted net income and adjusted net income per share information as primary measures 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 that are not central to our core operations, we do not believe it is appropriate or fair to have their incentive compensation affected by these items.

Item 9.01. Financial Statements and Exhibits.

          (d) Exhibits.

Exhibit
Number		Description
99.1		Press Release, dated February 2, 2010

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, hereunto duly authorized.

Dated: February 2, 2010

EXHIBIT INDEX

Exhibit
Number		Description
99.1		Press Release, dated February 2, 2010.

Exhibit 99.1

Contact:		Dennis Story		Terrie O’Hanlon
		Chief Financial Officer		Chief Marketing Officer
		Manhattan Associates, Inc.		Manhattan Associates, Inc.
		678-597-7115		678-597-7120
		dstory@manh.com		tohanlon@manh.com

Manhattan Associates Reports Fourth Quarter and Full Year
2009 Results

ATLANTA — February 2, 2010 — Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported fourth quarter 2009 non-GAAP adjusted diluted earnings per share of $0.31 compared to $0.26 in the 2008 fourth quarter, and GAAP diluted earnings per share of $0.26 compared to $0.08 in the prior year fourth quarter. The Company posted total fourth quarter revenue of $62.1 million, which was down 18% from overall revenue posted in the same quarter of 2008.

Manhattan Associates President and CEO Pete Sinisgalli commented, “Our fourth quarter results include modest year-over-year license revenue growth, reflecting a further rebound in supply chain investments by both existing and new customers. Our competitive win rate was strong in the quarter, and we significantly strengthened our market position through new releases of core solutions on our Supply Chain Process Platform — including Warehouse Management.”

FOURTH QUARTER 2009 FINANCIAL SUMMARY:

	•		Adjusted diluted earnings per share, a non-GAAP measure, was $0.31 in the fourth quarter of 2009, compared to $0.26 in the same quarter of 2008.
	•		The Company reported GAAP diluted earnings per share of $0.26, compared to $0.08 in the fourth quarter of 2008. Results for the fourth quarter of 2008 include the impact of a $4.7 million restructuring charge associated with a workforce reduction action executed in the quarter.
	•		Consolidated revenue for the fourth quarter of 2009 was $62.1 million, compared to $75.7 million in the fourth quarter of 2008. License revenue was $14.3 million in the fourth quarter of 2009, compared to $13.8 million in the fourth quarter of 2008.

www.manh.com

	•		Adjusted operating income, a non-GAAP measure, was $12.0 million in the fourth quarter of 2009, compared to $7.2 million in the same quarter of 2008.
	•		GAAP operating income for the fourth quarter of 2009 was $9.9 million compared to $0.4 million in the fourth quarter of 2008. Results for the fourth quarter of 2008 include the impact of a $4.7 million restructuring charge associated with a workforce reduction action executed in the quarter.
	•		Cash flow from operations was $19.4 million in the fourth quarter of 2009, compared to $18.3 million in the fourth quarter of 2008. Days Sales Outstanding were 56 days at December 31, 2009, compared to 78 days at December 31, 2008.
	•		Cash and investments on-hand at December 31, 2009 was $123.0 million compared to $88.7 million at December 31, 2008.
	•		For the three months ended December 31, 2009, the Company repurchased approximately 115 thousand common shares at an average price of $24.28, for a total investment of $2.8 million.
	•		In January 2010, the Board of Directors approved raising the Company’s remaining share repurchase authority from $12.2 million to $25.0 million of Manhattan Associates outstanding common stock.

FULL YEAR 2009 FINANCIAL SUMMARY:

	•		Adjusted diluted earnings per share, a non-GAAP measure, were $0.96 for the year ended December 31, 2009, compared to $1.38 for full year ended December 31, 2008.
	•		GAAP diluted earnings per share for the full year 2009 was $0.73, compared to $0.94 for the full year 2008. Results for the year ended December 31, 2009 include pre-tax restructuring charges of $3.9 million, or $0.11 per share, and the release of tax contingency reserves associated with expiring tax audit statutes for 2005. Results for the year ended December 31, 2008 include pre-tax impairment charges of $5.2 million, or $0.22 per share, pre-tax restructuring charges of $4.7 million, or $0.13 per share, and the release of tax contingency reserves associated with expiring tax audit statutes for 2004 and prior.
	•		Consolidated revenue for the year ended December 31, 2009 was $246.7 million compared to $337.2 million for the year ended December 31, 2008. License revenue was $34.7 million for the full year 2009, compared to $65.3 million in the full year 2008.

www.manh.com

	•		Adjusted operating income, a non-GAAP measure, was $33.1 million for the year ended December 31, 2009, compared to $44.3 million for the year ended December 31, 2008.
	•		GAAP operating income was $21.1 million for the year ended December 31, 2009, compared to $26.0 million for the year ended December 31, 2008. Results for the year ended December 31, 2009 include a restructuring charge of $3.9 million. The prior year’s results include asset write-downs of $5.2 million and a restructuring charge of $4.7 million.
	•		For the year ended December 31, 2009, the Company repurchased approximately 1.4 million common shares at an average share price of $16.63, for a total investment of $22.8 million.

SALES ACHIEVEMENTS:

	•		Closing two contracts of $1.0 million or more in recognized license revenue during the quarter.
	•		Completing software license wins with new customers such as: Goya Foods, Inc.; Groveport LLC; J&P Cycles, Inc.; Kwik Trip, Inc.; Milan Express, Inc.; Radiant Group (Pty) Ltd; ResMed Corp.; Tractor Supply Company; Richline Group, Inc.; Sigma-Aldrich and Vasanta Group.
	•		Expanding partnerships with existing customers such as: ACH Food Companies Inc.; Amerisource Bergen; Archbrook Laguna; Avon Products, Inc.; Carolina Logistics Services LLC; CEVA Logistics U.S. , Inc.; Fitness Quest, Inc.; Fowler Welch Coolchain; Genuine Parts Company; Guru Denim, Inc.; Jasco Products Company LLC; Jefferson Smurfit Corporation; O’Reilly Automotive, Inc.; PepsiCo, Inc.; Performance, Inc.; Tally Weijl; The Travis Association for the Blind; and Wirtz Corporation.

2010 GUIDANCE

During the second quarter of 2009, due to economic uncertainty and limited visibility, Manhattan Associates suspended its earnings guidance for the remainder of 2009. Due to continued economic uncertainty in 2010, the Company is continuing its suspension of earnings guidance.

CONFERENCE CALL

The Company’s conference call regarding its fourth quarter and full year financial results will be held at 4:30 p.m. Eastern Time on Tuesday, February 2, 2010. Investors are invited to

www.manh.com

listen to a live webcast of the conference call through the investor relations section of Manhattan Associates’ website. 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 48223822 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’ first 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 and full year ended December 31, 2009.

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; stock option expense; asset impairment charges; and restructuring charges — 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.

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

www.manh.com

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. 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, 2008. 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.

###

www.manh.com

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2009				2008				2009				2008
		(unaudited)								(unaudited)
Revenue:
Software license		$	14,278			$	13,834			$	34,686			$	65,313
Services			42,668				53,818				189,850				235,967
Hardware and other			5,193				7,999				22,131				35,921
Total revenue			62,139				75,651				246,667				337,201
Costs and Expenses:
Cost of license			1,105				1,648				4,726				5,961
Cost of services			20,176				26,195				84,349				116,707
Cost of hardware and other			4,242				6,651				18,386				29,270
Research and development			8,485				11,496				36,681				48,407
Sales and marketing			8,406				11,350				36,137				51,177
General and administrative			7,271				10,108				29,946				37,145
Depreciation and amortization			2,578				3,168				11,418				12,699
Asset impairment charges			—				—				—				5,205
Restructuring charge			(10	)			4,667				3,882				4,667
Total costs and expenses			52,253				75,283				225,525				311,238
Operating income			9,886				368				21,142				25,963
Other (expense) income, net			(374	)			1,667				(756	)			5,545
Income before income taxes			9,512				2,035				20,386				31,508
Income tax provision			3,639				57				3,824				8,710
Net income		$	5,873			$	1,978			$	16,562			$	22,798
Basic earnings per share		$	0.27			$	0.08			$	0.74			$	0.95
Diluted earnings per share		$	0.26			$	0.08			$	0.73			$	0.94
Weighted average number of shares:
Basic			22,128				23,500				22,385				24,053
Diluted			22,667				23,549				22,558				24,328

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES
(in thousands, except per share amounts)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2009				2008				2009				2008
Operating income		$	9,886			$	368			$	21,142			$	25,963
Stock option expense (a)			1,374				1,383				5,153				5,458
Purchase amortization (b)			741				759				2,964				3,253
Restructuring charge (c)			(10	)			4,667				3,882				4,667
Asset impairment charges (d)			—				—				—				5,205
Sales tax recoveries (e)			—				—				—				(234	)
Adjusted operating income (Non-GAAP)		$	11,991			$	7,177			$	33,141			$	44,312
Income tax provision (benefit)		$	3,639			$	57			$	3,824			$	8,710
Stock option expense (a)			563				481				1,791				1,897
Purchase amortization (b)			308				263				1,030				1,130
Restructuring charge (c)			84				1,622				1,349				1,622
Asset impairment charges (d)			—				—				—				(94	)
Sales tax recoveries (e)			—				—				—				(81	)
Unusual tax adjustments (f)			—				381				2,770				3,032
Adjusted income tax provision (Non-GAAP)		$	4,594			$	2,804			$	10,764			$	16,216
Net income		$	5,873			$	1,978			$	16,562			$	22,798
Stock option expense (a)			811				902				3,362				3,561
Purchase amortization (b)			433				496				1,934				2,123
Restructuring charge (c)			(94	)			3,045				2,533				3,045
Asset impairment charges (d)			—				—				—				5,299
Sales tax recoveries (e)			—								—				(153	)
Unusual tax adjustments (f)			—				(381	)			(2,770	)			(3,032	)
Adjusted net income (Non-GAAP)		$	7,023			$	6,040			$	21,621			$	33,641
Diluted EPS		$	0.26			$	0.08			$	0.73			$	0.94
Stock option expense (a)			0.04				0.04				0.15				0.15
Purchase amortization (b)			0.02				0.02				0.09				0.09
Restructuring charge (c)			—				0.13				0.11				0.13
Asset impairment charges (d)			—				—				—				0.22
Sales tax recoveries (e)			—				—				—				(0.01	)
Unusual tax adjustments (f)			—				(0.02	)			(0.12	)			(0.12	)
Adjusted diluted EPS (Non-GAAP)		$	0.31			$	0.26			$	0.96			$	1.38
Fully diluted shares			22,667				23,549				22,558				24,328

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2009				2008				2009				2008
Cost of services		$	154			$	118			$	630			$	476
Research and development			205				199				884				790
Sales and marketing			391				436				1,185				1,717
General and administrative			624				630				2,454				2,475
Total stock option expense		$	1,374			$	1,383			$	5,153			$	5,458

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

		December 31,
		2009				2008
ASSETS
Current Assets:
Cash and cash equivalents		$	120,217			$	85,739
Accounts receivable, net of allowance of $4,943 and $5,566 in 2009 and 2008, respectively			37,945				63,896
Deferred income taxes			5,745				6,667
Prepaid expenses and other current assets			4,847				6,979
Total current assets			168,754				163,281
Property and equipment, net			15,759				21,721
Long-term investments			2,797				2,967
Acquisition-related intangible assets, net			3,473				6,438
Goodwill, net			62,280				62,276
Deferred income taxes			9,826				10,932
Other assets			1,822				2,606
Total assets		$	264,711			$	270,221
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	4,434			$	8,480
Accrued compensation and benefits			12,855				17,429
Accrued and other liabilities			15,430				16,188
Deferred revenue			37,436				32,984
Income taxes payable			796				2,365
Total current liabilities			70,951				77,446
Other non-current liabilities			10,395				12,936
Shareholders’ equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2009 or 2008			—				—
Common stock, $.01 par value; 100,000,000 shares authorized; 22,467,123 and 23,581,109 shares issued and outstanding at December 31, 2009 and 2008, respectively			225				234
Additional paid-in capital			2,892				—
Retained earnings			182,387				182,882
Accumulated other comprehensive loss			(2,139	)			(3,277	)
Total shareholders’ equity			183,365				179,839
Total liabilities and shareholders’ equity		$	264,711			$	270,221

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

		Twelve Months Ended
		December 31,
		2009				2008
Operating activities:
Net income		$	16,562			$	22,798
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			11,418				12,699
Asset impairment charge			—				5,205
Stock compensation			8,622				8,864
Loss on disposal of equipment			130				156
Tax (deficiency) benefit of stock awards exercised/vested			(1,023	)			202
Excess tax benefits from stock based compensation			(64	)			(100	)
Deferred income taxes			2,077				(1,389	)
Unrealized foreign currency loss (gain)			1,022				(694	)
Changes in operating assets and liabilities:
Accounts receivable, net			26,658				7,077
Other assets			3,058				2,691
Accounts payable, accrued and other liabilities			(10,453	)			5,997
Income taxes			(3,502	)			(1,324	)
Deferred revenue			3,818				1,659
Net cash provided by operating activities			58,323				63,841
Investing activities:
Purchase of property and equipment			(2,378	)			(7,708	)
Net maturities of investments			84				21,623
Net cash (used in) provided by investing activities			(2,294	)			13,915
Financing activities:
Purchase of common stock			(23,435	)			(35,107	)
Excess tax benefits from stock based compensation			64				100
Proceeds from issuance of common stock from options exercised			1,662				3,177
Net cash used in financing activities			(21,709	)			(31,830	)
Foreign currency impact on cash			158				(4,862	)
Net change in cash and cash equivalents			34,478				41,064
Cash and cash equivalents at beginning of period			85,739				44,675
Cash and cash equivalents at end of period		$	120,217			$	85,739

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1. GAAP and Adjusted Earnings per share by quarter are as follows:

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
GAAP Diluted EPS		$	0.30			$	0.37			$	0.18			$	0.08			$	0.94			$	0.01			$	(0.02	)		$	0.50			$	0.26			$	0.73
Adjustments to GAAP:
Stock option expense			0.03				0.04				0.04				0.04				0.15				0.04				0.03				0.04				0.04				0.15
Purchase amortization			0.02				0.02				0.02				0.02				0.09				0.02				0.02				0.02				0.02				0.09
Restructuring charge			—				—				—				0.13				0.13				—				0.12				—				—				0.11
Asset impairment charges			—				—				0.22				—				0.22				—				—				—				—				—
Sales tax recoveries			(0.01	)			—				—				—				(0.01	)			—				—				—				—				—
Unusual tax adjustments			—				—				(0.11	)			(0.02	)			(0.12	)			—				—				(0.12	)			—				(0.12	)
Adjusted Diluted EPS		$	0.35			$	0.42			$	0.34			$	0.26			$	1.38			$	0.07			$	0.14			$	0.43			$	0.31			$	0.96

2. Revenues and operating income (loss) by reportable segment are as follows (in thousands):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Revenue:
Americas		$	72,129			$	73,551			$	67,957			$	63,609			$	277,246			$	50,827			$	47,372			$	55,626			$	52,733			$	206,558
EMEA			12,028				11,961				10,083				8,726				42,798				7,030				7,818				6,527				6,650				28,025
APAC			4,167				4,978				4,696				3,316				17,157				2,968				3,219				3,141				2,756				12,084
		$	88,324			$	90,490			$	82,736			$	75,651			$	337,201			$	60,825			$	58,409			$	65,294			$	62,139			$	246,667
GAAP Operating Income (Loss):
Americas		$	7,065			$	10,643			$	1,618			$	(477	)		$	18,849			$	260			$	(407	)		$	10,736			$	10,859			$	21,448
EMEA			2,055				2,215				1,292				1,078				6,640				738				1,124				20				(789	)			1,093
APAC			(31	)			406				332				(233	)			474				(371	)			(1,143	)			299				(184	)			(1,399	)
		$	9,089			$	13,264			$	3,242			$	368			$	25,963			$	627			$	(426	)		$	11,055			$	9,886			$	21,142
Adjustments (pre-tax):
Americas:
Stock option expense		$	1,304			$	1,372			$	1,399			$	1,383			$	5,458			$	1,400			$	1,010			$	1,369			$	1,374			$	5,153
Purchase amortization			881				844				769				759				3,253				741				741				741				741				2,964
Restructuring charge			—				—				—				4,369				4,369				59				2,960				—				—				3,019
Asset impairment charges			—				—				5,205				—				5,205				—				—				—				—				—
Sales tax recoveries			(234	)			—				—				—				(234	)			—				—				—				—				—
		$	1,951			$	2,216			$	7,373			$	6,511			$	18,051			$	2,200			$	4,711			$	2,110			$	2,115			$	11,136
EMEA:
Restructuring charge			—				—				—				204			$	204				—				20				—				—				20
		$	—			$	—			$	—			$	204			$	204			$	—			$	20			$	—			$	—			$	20
APAC:
Restructuring charge			—				—				—				94			$	94				4				849				—				(10	)			843
		$	—			$	—			$	—			$	94			$	94			$	4			$	849			$	—			$	(10	)		$	843
Total Adjustments		$	1,951			$	2,216			$	7,373			$	6,809			$	18,349			$	2,204			$	5,580			$	2,110			$	2,105			$	11,999
Adjusted non-GAAP Operating Income (Loss):
Americas		$	9,016			$	12,859			$	8,991			$	6,034			$	36,900			$	2,460			$	4,304			$	12,846			$	12,974			$	32,584
EMEA			2,055				2,215				1,292				1,282				6,844				738				1,144				20				(789	)			1,113
APAC			(31	)			406				332				(139	)			568				(367	)			(294	)			299				(194	)			(556	)
		$	11,040			$	15,480			$	10,615			$	7,177			$	44,312			$	2,831			$	5,154			$	13,165			$	11,991			$	33,141

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):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Professional services		$	41,718			$	42,866			$	40,693			$	33,728			$	159,005			$	32,345			$	30,767			$	27,158			$	22,500			$	112,770
Customer support and software enhancements			18,119				19,423				19,330				20,090				76,962				18,498				18,655				19,759				20,168				77,080
Total services revenue		$	59,837			$	62,289			$	60,023			$	53,818			$	235,967			$	50,843			$	49,422			$	46,917			$	42,668			$	189,850

4. Hardware and other revenue includes the following items (in thousands):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Hardware revenue		$	7,141			$	5,428			$	5,756			$	4,916			$	23,241			$	3,080			$	2,992			$	5,086			$	3,474			$	14,632
Billed travel			3,034				3,408				3,155				3,083				12,680				1,980				1,869				1,931				1,719				7,499
Total hardware and other revenue		$	10,175			$	8,836			$	8,911			$	7,999			$	35,921			$	5,060			$	4,861			$	7,017			$	5,193			$	22,131

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):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Revenue		$	1,131			$	1,189			$	132			$	(2,209	)		$	243			$	(2,387	)		$	(1,996	)		$	(764	)		$	876			$	(4,271	)
Costs and expenses			1,601				911				(331	)			(3,112	)			(931	)			(3,307	)			(2,560	)			(1,286	)			1,205				(5,948	)
Operating income			(470	)			278				463				903				1,174				920				564				522				(329	)			1,677
Foreign currency gains (losses) in other income			1,641				299				542				1,395				3,877				(366	)			(506	)			294				(427	)			(1,005	)
		$	1,171			$	577			$	1,005			$	2,298			$	5,051			$	554			$	58			$	816			$	(756	)		$	672

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):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Operating income		$	(619	)		$	59			$	540				1,248			$	1,228			$	1,129			$	800			$	458				(249	)		$	2,138
Foreign currency gains (losses) in other income			94				385				787				549				1,815				336				(367	)			2				(276	)			(305	)
Total impact of changes in the Indian Rupee		$	(525	)		$	444			$	1,327			$	1,797			$	3,043			$	1,465			$	433			$	460			$	(525	)		$	1,833

6. Other income (expense) includes the following components (in thousands):

		2008																				2009
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Interest income		$	663			$	375			$	394			$	391			$	1,823			$	137			$	95			$	71			$	65			$	368
Foreign currency gains (losses)			1,641				299				542				1,395				3,877				(366	)			(506	)			294				(427	)			(1,005	)
Other non-operating (expense) income			(3	)			(24	)			(9	)			(119	)			(155	)			(4	)			7				(110	)			(12	)			(119	)
Total other income (expense)		$	2,301			$	650			$	927			$	1,667			$	5,545			$	(233	)		$	(404	)		$	255			$	(374	)		$	(756	)