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

Manhattan Associates, Inc.

(Exact Name of Registrant as Specified in Its Charter)

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

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 July 20, 2010, Manhattan Associates, Inc. (the “Company”) issued a press release providing the results for its financial performance for the second quarter and the six months ended June 30, 2010. 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, 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, 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, the collection of the taxes from our customers or a sales tax audit refund 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 restructuring charge incurred in 2009 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.
	•		As discussed above, we excluded stock option expense from adjusted non-GAAP results because it is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control. Therefore, we also excluded the related tax benefit generated upon their disposition.

     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 July 20, 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: July 20, 2010

EXHIBIT INDEX

Exhibit
Number		Description
99.1		Press Release, dated July 20, 2010.

Exhibit 99.1

For Immediate Release

		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 Strong Second Quarter Earnings Per Share
Company posts Q2 Total Revenue of $77.6 Million, a 33% Increase over Q2 2009

ATLANTA – July 20, 2010 – Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported second quarter 2010 non-GAAP adjusted diluted earnings per share of $0.38 compared to $0.14 in the second quarter of 2009, on license revenue of $15.5 million and total revenue of $77.6 million. GAAP diluted earnings per share was $0.36 compared to a GAAP loss per share of $0.02 in the prior year second quarter.

Manhattan Associates President and CEO Pete Sinisgalli commented, “We are pleased with our second quarter and first half 2010 financial results and our strengthening competitive position in the supply chain optimization market. Our continued investment in platform-based solution efficiencies and innovation is paying dividends both in terms of sales momentum and customer satisfaction. “

SECOND QUARTER 2010 FINANCIAL SUMMARY:

	•		Adjusted diluted earnings per share, a non-GAAP measure, was $0.38 in the second quarter of 2010, compared to $0.14 in the second quarter of 2009.
	•		The Company reported GAAP diluted earnings per share of $0.36, compared to a GAAP loss per share of $0.02 in the second quarter of 2009.
	•		Consolidated revenue for the second quarter of 2010 was $77.6 million, compared to $58.4 million in the second quarter of 2009. License revenue was $15.5 million in the second quarter of 2010, compared to $4.1 million in the second quarter of 2009.
	•		Adjusted operating income, a non-GAAP measure, was $12.8 million in the second quarter of 2010, compared to $5.2 million in the second quarter of 2009.
	•		GAAP operating income for the second quarter of 2010 was $12.0 million, compared to an operating loss of $0.4 million in the second quarter of 2009. Operating income for the

			second quarter of 2010 includes $0.8 million of recoveries of previously recorded state sales tax associated with expiring sales tax audit statutes, while the operating loss for the second quarter of 2009 includes a pre-tax restructuring charge of $3.8 million.
	•		Cash flow from operations was $10.0 million in the second quarter of 2010, compared to $10.8 million in the second quarter of 2009. Days Sales Outstanding were 55 days at June 30, 2010, compared to 53 days at March 31, 2010.
	•		Cash and investments on-hand at June 30, 2010 was $120.2 million, compared to $123.1 million at March 31, 2010.
	•		The Company repurchased approximately 869,000 common shares totaling $25.0 million at an average share price of $28.77 in the second quarter of 2010, completing its $25.0 million stock repurchase program approved in April 2010. In July 2010, Manhattan’s Board of Directors approved the repurchase of up to an additional $25.0 million of Manhattan Associates outstanding common stock.

SIX MONTH 2010 FINANCIAL SUMMARY:

	•		Adjusted diluted earnings per share, a non-GAAP measure, was $0.74 for the six months ended June 30, 2010, compared to $0.22 for the six months ended June 30, 2009.
	•		GAAP diluted earnings per share for the six months ended June 30, 2010 was $0.68, compared to a GAAP loss per share of $0.01 for the six months ended June 30, 2009.
	•		Consolidated revenue for the six months ended June 30, 2010 was $151.6 million, compared to $119.2 million for the six months ended June 30, 2009. License revenue was $29.7 million for the six months ended June 30, 2010, compared to $9.0 million in the six months ended June 30, 2009.
	•		Adjusted operating income, a non-GAAP measure, was $25.6 million for the six months ended June 30, 2010, compared to $8.0 million for the six months ended June 30, 2009.
	•		GAAP operating income was $23.5 million for the six months ended June 30, 2010, compared to $0.2 million for the six months ended June 30, 2009, which included a restructuring charge of $3.9 million. The first half of 2010 operating income includes $1.2 million of recoveries of previously expensed sales tax associated with expiring sales tax audit statutes.

•

For the six months ended June 30, 2010, the Company repurchased approximately 1.5 million common shares under the share repurchase program authorized by the Board of Directors at an average share price of $27.33, for a total investment of $40.0 million.

SALES ACHIEVEMENTS:

	•		Recognized two contracts of $1.0 million or more in license revenue during the quarter.
	•		Completed software license wins with new customers such as Aluminium Specialities Group, Associated Hygienic Products LLC, Cotton on Group Services, Guangdong Xin Yang Logistics Equipment, Guangzhou Fengshen Logistics Co., HVHC, Inc.,
			Osotspa Co., Pickwick SAS, Qingdao Haier Logistics Co., The C.D. Hartnett Company and The Chamberlain Group, Inc.
	•		Expanded partnerships with existing customers such as 3 Suisses International, A.N. Deringer, Inc., Avon Products, Inc., Benjamin Moore & Co., Challenger Motor Freight, Inc., Chanel (Australia) Pty Ltd, Converse, Inc., Devil-Dog Mfg. Co., Dick’s Sporting Goods, Inc., EXE c&t Co., Exel, Inc., McKesson Corporation, MTD Products, Inc., Panalpina Management AG, Phillips-Van Heusen Corporation, Southern Wine & Spirits of America, Speed Transportation, The Harvard Drug Group LLC.

CONFERENCE CALL

The Company’s conference call regarding its second quarter financial results will be held at 4:30 p.m. Eastern Time on Tuesday, July 20, 2010. Investors are invited to listen to a live webcast of the conference call through the investor relations section of Manhattan Associates’ website at www.manh.com. To listen to the live webcast, please go to www.manh.com at least 15 minutes before the call to download and install any necessary audio software. For those who cannot listen to the content live, 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 83562530, or via the Web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet replay will be available until Manhattan Associates’ third 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 June 30, 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 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 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.

###

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

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
		(unaudited)								(unaudited)
Revenue:
Software license		$	15,485			$	4,126			$	29,692			$	9,048
Services			54,780				49,422				108,241				100,265
Hardware and other			7,376				4,861				13,657				9,921
Total revenue			77,641				58,409				151,590				119,234
Costs and expenses:
Cost of license			1,611				1,035				3,160				2,459
Cost of services			24,906				21,319				48,970				44,476
Cost of hardware and other			6,205				4,177				11,274				8,298
Research and development			10,334				9,188				20,774				19,415
Sales and marketing			12,073				9,026				22,541				19,105
General and administrative			8,177				7,251				16,638				15,213
Depreciation and amortization			2,318				3,010				4,733				6,175
Restructuring charge			—				3,829				—				3,892
Total costs and expenses			65,624				58,835				128,090				119,033
Operating income (loss)			12,017				(426	)			23,500				201
Other income (expense), net			304				(404	)			(194	)			(637	)
Income (loss) before income taxes			12,321				(830	)			23,306				(436	)
Income tax provision (benefit)			4,132				(274	)			7,922				(142	)
Net income (loss)		$	8,189			$	(556	)		$	15,384			$	(294	)
Basic earnings (loss) per share		$	0.38			$	(0.02	)		$	0.70			$	(0.01	)
Diluted earnings (loss) per share		$	0.36			$	(0.02	)		$	0.68			$	(0.01	)
Weighted average number of shares:
Basic			21,718				22,391				21,837				22,687
Diluted			22,776				22,391				22,655				22,687

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

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
Operating income (loss)		$	12,017			$	(426	)		$	23,500			$	201
Stock option expense (a)			901				1,010				2,079				2,410
Purchase amortization (b)			639				741				1,277				1,482
Restructuring charge (c)			—				3,829				—				3,892
Sales tax recoveries (d)			(792	)			—				(1,212	)			—
Adjusted operating income (Non-GAAP)		$	12,765			$	5,154			$	25,644			$	7,985
Income tax provision (benefit)		$	4,132			$	(274	)		$	7,922			$	(142	)
Stock option expense (a)			311				314				717				783
Purchase amortization (b)			221				234				441				482
Restructuring charge (c)			—				1,244				—				1,265
Sales tax recoveries (d)			(273	)			—				(418	)			—
Unusual tax adjustments (e)			118				—				118				—
Adjusted income tax provision (Non-GAAP)		$	4,509			$	1,518			$	8,780			$	2,388
Net income (loss)		$	8,189			$	(556	)		$	15,384			$	(294	)
Stock option expense (a)			590				696				1,362				1,627
Purchase amortization (b)			418				507				836				1,000
Restructuring charge (c)			—				2,585				—				2,627
Sales tax recoveries (d)			(519	)			—				(794	)			—
Unusual tax adjustments (e)			(118	)			—				(118	)			—
Adjusted net income (Non-GAAP)		$	8,560			$	3,232			$	16,670			$	4,960
Diluted earnings (loss) per share		$	0.36			$	(0.02	)		$	0.68			$	(0.01	)
Stock option expense (a)			0.03				0.03				0.06				0.07
Purchase amortization (b)			0.02				0.02				0.04				0.04
Restructuring charge (c)			—				0.12				—				0.12
Sales tax recoveries (d)			(0.02	)			—				(0.04	)			—
Unusual tax adjustments (e)			(0.01	)			—				(0.01	)			—
Adjusted diluted EPS (Non-GAAP)		$	0.38			$	0.14			$	0.74			$	0.22
Fully diluted shares			22,776				22,391				22,655				22,687
Effect of common stock equivalents (f)			—				53				—				44
Adjusted fully diluted shares (Non-GAAP)			22,776				22,444				22,655				22,731

		Three Months Ended June 30,								Six Months Ended June 30,
		2010				2009				2010				2009
Cost of services		$	129			$	188			$	268			$	321
Research and development			156				258				322				471
Sales and marketing			296				(42	)			616				405
General and administrative			320				606				873				1,213
Total stock option expense		$	901			$	1,010			$	2,079			$	2,410

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

		June 30, 2010				December 31, 2009
		(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	117,663			$	120,217
Accounts receivable, net of allowance of $6,379 and $4,943 in 2010 and 2009, respectively			46,747				37,945
Deferred income taxes			5,793				5,745
Income taxes receivable			1,038				—
Prepaid expenses and other current assets			5,573				4,847
Total current assets			176,814				168,754
Property and equipment, net			14,951				15,759
Long-term investments			2,532				2,797
Goodwill, net			62,251				62,280
Acquisition-related intangible assets, net			2,196				3,473
Deferred income taxes			9,831				9,826
Other assets			2,165				1,822
Total assets		$	270,740			$	264,711
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	7,747			$	4,434
Accrued compensation and benefits			17,552				12,855
Accrued and other liabilities			15,094				15,430
Deferred revenue			38,632				37,436
Income taxes payable			—				796
Total current liabilities			79,025				70,951
Other non-current liabilities			10,422				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; 22,167,568 and 22,467,123 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively			222				225
Additional paid-in capital			—				2,892
Retained earnings			183,412				182,387
Accumulated other comprehensive loss			(2,341	)			(2,139	)
Total shareholders’ equity			181,293				183,365
Total liabilities and shareholders’ equity		$	270,740			$	264,711

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

		Six Months Ended
		2010				2009
		(unaudited)
Operating activities:
Net income (loss)		$	15,384			$	(294	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			4,733				6,175
Stock compensation			5,087				4,018
Loss on disposal of equipment			(6	)			12
Tax benefit (deficiency) of stock awards exercised/vested			1,237				(1,088	)
Excess tax benefits from stock based compensation			(342	)			(9	)
Deferred income taxes			(25	)			386
Unrealized foreign currency loss			24				723
Changes in operating assets and liabilities:
Accounts receivable, net			(9,299	)			25,082
Other assets			(1,122	)			2,342
Accounts payable, accrued and other liabilities			8,285				(9,872	)
Income taxes			(1,837	)			(2,944	)
Deferred revenue			1,743				(986	)
Net cash provided by operating activities			23,862				23,545
Investing activities:
Purchase of property and equipment			(2,706	)			(1,360	)
Net maturies of investments			98				80
Net cash used in investing activities			(2,608	)			(1,280	)
Financing activities:
Purchase of common stock			(41,022	)			(20,540	)
Proceeds from issuance of common stock from options exercised			17,445				544
Excess tax benefits from stock based compensation			342				9
Net cash used in financing activities			(23,235	)			(19,987	)
Foreign currency impact on cash			(573	)			(49	)
Net change in cash and cash equivalents			(2,554	)			2,229
Cash and cash equivalents at beginning of period			120,217				85,739
Cash and cash equivalents at end of period		$	117,663			$	87,968

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				2nd Qtr				YTD
GAAP Diluted EPS		$	0.01			$	(0.02	)		$	0.50			$	0.26			$	0.73			$	0.32			$	0.36			$	0.68
Adjustments to GAAP:
Stock option expense			0.04				0.03				0.04				0.04				0.15				0.03				0.03				0.06
Purchase amortization			0.02				0.02				0.02				0.02				0.09				0.02				0.02				0.04
Restructuring charge			—				0.12				—				—				0.11				—				—				—
Sales tax recoveries			—				—				—				—				—				(0.01	)			(0.02	)			(0.04	)
Unusual tax adjustments			—				—				(0.12	)			—				(0.12	)			—				(0.01	)			(0.01	)
Adjusted Diluted EPS		$	0.07			$	0.14			$	0.43			$	0.31			$	0.96			$	0.36			$	0.38			$	0.74

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				2nd Qtr				YTD
Revenue:
Americas		$	50,827			$	47,372			$	55,626			$	52,733			$	206,558			$	61,889			$	64,875			$	126,764
EMEA			7,030				7,818				6,527				6,650				28,025				7,989				8,587				16,576
APAC			2,968				3,219				3,141				2,756				12,084				4,071				4,179				8,250
		$	60,825			$	58,409			$	65,294			$	62,139			$	246,667			$	73,949			$	77,641			$	151,590
GAAP Operating Income (Loss):
Americas		$	260			$	(407	)		$	10,736			$	10,859			$	21,448			$	10,333			$	9,836			$	20,169
EMEA			738				1,124				20				(789	)			1,093				418				1,530				1,948
APAC			(371	)			(1,143	)			299				(184	)			(1,399	)			732				651				1,383
		$	627			$	(426	)		$	11,055			$	9,886			$	21,142			$	11,483			$	12,017			$	23,500
Adjustments (pre-tax):
Americas:
Stock option expense		$	1,400			$	1,010			$	1,369			$	1,374			$	5,153			$	1,178			$	901			$	2,079
Purchase amortization			741				741				741				741				2,964				638				639				1,277
Restructuring charge			59				2,960				—				—				3,019				—				—				—
Sales tax recoveries			—				—				—				—				—				(420	)			(792	)			(1,212	)
		$	2,200			$	4,711			$	2,110			$	2,115			$	11,136			$	1,396			$	748			$	2,144
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			$	748			$	2,144
Adjusted non-GAAP Operating Income (Loss):
Americas		$	2,460			$	4,304			$	12,846			$	12,974			$	32,584			$	11,729			$	10,584			$	22,313
EMEA			738				1,144				20				(789	)			1,113				418				1,530				1,948
APAC			(367	)			(294	)			299				(194	)			(556	)			732				651				1,383
		$	2,831			$	5,154			$	13,165			$	11,991			$	33,141			$	12,879			$	12,765			$	25,644

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				2nd Qtr				YTD
Professional services		$	32,345			$	30,767			$	27,158			$	22,500			$	112,770			$	33,960			$	34,349			$	68,309
Customer support and software enhancements			18,498				18,655				19,759				20,168				77,080				19,501				20,431				39,932
Total services revenue		$	50,843			$	49,422			$	46,917			$	42,668			$	189,850			$	53,461			$	54,780			$	108,241

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				2nd Qtr				YTD
Hardware revenue		$	3,080			$	2,992			$	5,086			$	3,474			$	14,632			$	4,518			$	5,053			$	9,571
Billed travel			1,980				1,869				1,931				1,719				7,499				1,763				2,323				4,086
Total hardware and other revenue		$	5,060			$	4,861			$	7,017			$	5,193			$	22,131			$	6,281			$	7,376			$	13,657

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):

		2009																				2010
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				YTD
Revenue		$	(2,387	)		$	(1,996	)		$	(764	)		$	876			$	(4,271	)		$	1,053			$	(72	)		$	981
Costs and expenses			(3,307	)			(2,560	)			(1,286	)			1,205				(5,948	)			1,346				235				1,581
Operating income			920				564				522				(329	)			1,677				(293	)			(307	)			(600	)
Foreign currency gains (losses) in other income			(366	)			(506	)			294				(427	)			(1,005	)			(415	)			187				(228	)
		$	554			$	58			$	816			$	(756	)		$	672			$	(708	)		$	(120	)		$	(828	)

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				2nd Qtr				YTD
Operating income		$	1,129			$	800			$	458				(249	)		$	2,138			$	(395	)		$	(340	)		$	(735	)
Foreign currency gains (losses) in other income			336				(367	)			2				(276	)			(305	)			(289	)			245				(44	)
Total impact of changes in the Indian Rupee		$	1,465			$	433			$	460			$	(525	)		$	1,833			$	(684	)		$	(95	)		$	(779	)

6.

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

		2009																				2010
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				YTD
Interest income		$	137			$	95			$	71			$	65			$	368			$	80			$	109			$	189
Foreign currency gains (losses)			(366	)			(506	)			294				(427	)			(1,005	)			(415	)			187				(228	)
Other non-operating (expense) income			(4	)			7				(110	)			(12	)			(119	)			(163	)			8				(155	)
Total other income (expense)		$	(233	)		$	(404	)		$	255			$	(374	)		$	(756	)		$	(498	)		$	304			$	(194	)

7.

Capital expenditures are as follows (in thousands):

		2009																				2010
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				YTD
Capital expenditures		$	873			$	487			$	366			$	652			$	2,378			$	1,177			$	1,529			$	2,706

8.		Stock Repurchase Activity
		During 2010, under the share repurchase program authorized by the Board of Directors, we repurchased approximately 1.5 million shares of common stock totaling $40.0 million at an average price of $27.33. In 2009, we repurchased approximately 1.4 million shares of common stock totaling $22.8 million at an average price of $16.63.
9.		Effective Tax Rate Reconciliation for GAAP and Adjusted Results (in thousands except tax rate and per share data):

		Three Months Ended June 30, 2010																				Six Months Ended June 30, 2010
		Income before				Income tax				Net				Diluted				Effective				Income before				Income tax				Net				Diluted				Effective
		income taxes				provision				income				EPS				Tax Rate				income taxes				provision				Net income				EPS				Tax Rate
GAAP results before tax adjustments		$	12,321			$	4,250			$	8,071			$	0.35				34.5	%		$	23,306			$	8,040			$	15,266			$	0.67				34.5	%
Unusual tax adjustments (a)			—				(118	)			118				0.01								—				(118	)			118				0.01
GAAP results- reported		$	12,321			$	4,132			$	8,189			$	0.36				33.5	%		$	23,306			$	7,922			$	15,384			$	0.68				34.0	%