UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 incorporation)		(Commission File Number)		(IRS Employer Identification No.)

2300 Windy Ridge Parkway, Suite 1000, Atlanta, Georgia		30339
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (770) 955-7070

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 1, 2011, Manhattan Associates, Inc. (the “Company”) issued a press release providing the results for its financial performance for the fourth quarter and the year ended December 31, 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.

This press release also includes our historic adjusted results, and our adjusted earnings per share estimate for the fiscal year ended December 31, 2011, excluding all equity compensation expense, not just stock option expense. The Company previously did not exclude restricted stock expense from its adjusted results, but anticipates doing so on an ongoing basis.

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 the items described above 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 and peers 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.

•

On a going forward basis, we intend to exclude all equity compensation expense—not just stock option expense—from our adjusted results, because equity compensation is not an expense that typically requires or will require cash settlement by the Company, and because we believe our competitors and peers typically present non-GAAP results excluding all equity compensation expense.

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 1, 2011

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 1, 2011

EXHIBIT INDEX

Exhibit
Number				Description
	99.1			Press Release, dated February 1, 2011.

Exhibit 99.1

Contact:		Dennis Story Chief Financial Officer Manhattan Associates, Inc. 678-597-7115 dstory@manh.com		Will Haraway Senior Manager, Media Relations Manhattan Associates, Inc. 678-597-7466 wharaway@manh.com

Manhattan Associates Reports Fourth Quarter and Full Year
2010 Revenue and Earnings

Q4 Total Revenue of $71.5 Million is up 15% over Q4 2009

ATLANTA — February 1, 2011 — Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported fourth quarter 2010 non-GAAP adjusted diluted earnings per share of $0.32 compared to $0.31 in the 2009 fourth quarter, and GAAP diluted earnings per share of $0.29 compared to $0.26 in the prior year fourth quarter. The Company posted total fourth quarter revenue of $71.5 million, an increase of 15% from overall revenue posted in the fourth quarter of 2009.

For the year ended December 31, 2010, non-GAAP adjusted diluted earnings per share of $1.38 compared to $0.96 for the full year 2009, and record GAAP diluted earnings per share of $1.25 compared to $0.73 in the prior year. For the twelve months ended December 31, 2010, the Company posted total revenue of $297.1 million, an increase of 20%, compared to 2009 full year revenue.

Manhattan Associates President and CEO Pete Sinisgalli commented, “We posted solid fourth quarter and full year financial results. We are particularly pleased with our market’s acceptance of our latest Supply Chain Optimization solutions and remain quite optimistic about our ability to deliver meaningful value to customers and shareholders.”

FOURTH QUARTER 2010 FINANCIAL SUMMARY:

•

Adjusted diluted earnings per share, a non-GAAP measure, was $0.32 in the fourth quarter of 2010, compared to $0.31 in the fourth quarter of 2009.

•

The Company reported GAAP diluted earnings per share of $0.29 in the fourth quarter of 2010, compared to $0.26 in the fourth quarter of 2009.

•

Consolidated revenue for the fourth quarter of 2010 was $71.5 million, compared to $62.1 million in the fourth quarter of 2009. License revenue was $12.7 million in the fourth quarter of 2010, compared to $14.3 million in the fourth quarter of 2009.

•

Adjusted operating income, a non-GAAP measure, was $10.1 million in the fourth quarter of 2010, compared to $12.0 million in the fourth quarter of 2009.

•

GAAP operating income for the fourth quarter of 2010 was $8.8 million, compared to $9.9 million in the fourth quarter of 2009.

•

Cash flow from operations was $14.6 million in the fourth quarter of 2010, compared to $19.4 million in the fourth quarter of 2009. Days Sales Outstanding were 61 days at December 31, 2010, compared to 60 days at September 30, 2010.

•

Cash and investments on-hand at December 31, 2010 was $126.9 million, compared to $116.7 million at September 30, 2010.

•

The Company repurchased approximately 680,000 common shares under the share repurchase program authorized by the Board of Directors, totaling $21.0 million at an average share price of $30.92 in the fourth quarter of 2010. In January 2011, Manhattan’s Board of Directors approved raising the Company’s share repurchase authority for Manhattan Associates common stock to a total of $50 million.

FULL YEAR FINANCIAL SUMMARY:

•

Adjusted diluted earnings per share, a non-GAAP measure, was $1.38 for the twelve months ended December 31, 2010, compared to $0.96 for the twelve months ended December 31, 2009.

•

GAAP diluted earnings per share for the twelve months ended December 31, 2010 was a record $1.25, compared to $0.73 for the twelve months ended December 31, 2009.

•

Consolidated revenue for the full year of 2010 was $297.1 million, compared to $246.7 million for the year ended December 31, 2009. License revenue was $54.5 million for the twelve months ended December 31, 2010, compared to $34.7 million in the twelve months ended December 31, 2009.

•

Adjusted operating income, a non-GAAP measure, was $46.8 million for the twelve months ended December 31, 2010, compared to $33.1 million for the twelve months ended December 31, 2009.

•

GAAP operating income was $41.9 million for the twelve months ended December 31, 2010, which includes $1.2 million of recoveries of previously expensed sales tax associated with expiring sales tax audit statutes, compared to $21.1 million for the twelve months ended December 31, 2009, which includes restructuring charges of $3.9 million associated with the workforce reduction executed in the second quarter of 2009.

•

For the twelve months ended December 31, 2010, the Company repurchased approximately 2.7 million common shares at an average share price of $28.15, for a total investment of $76.5 million.

SALES ACHIEVEMENTS:

•

Closing one contract of $1.0 million or more in recognized license revenue during the quarter.

•

Completing software license wins with new customers such as: Axstores AB; Baoxiniao Group Co.; Chanel (China) Co.; Five Below, Inc.; Itochu Logistics China Co.; Factory Motor Parts; Kane Warehousing, Inc.; Mitsubishi Fuso Truck and Bus Company; Lam Soon Edible Oils; Mitsubishi Motors; Oatey Co.; Petro LLC; Shanghai KW Logistics Co.; Total Sweeteners, Inc.; VIP Shop; and YiFeng Super Drugstore.

•

Expanding partnerships with existing customers such as: 3 Suisses International; AAA Cooper Transportation, Inc.; adidas AG; Brown Shoe Company, Inc.; C&J Clark America, Inc, Chico’s Retail Services, Inc., Cornerstone Brands, Inc., Costa’s PTY; Fasteners for Retail; Dick’s Sporting Goods; Excell Home Fashions Inc.; Guitar Center; Innotrac Corporation; Jasco Products Company LLC; Lamps Plus, Inc.; Mulberry Group; Northern Safety Co., Inc.; Olympus Corporation of the Americas; O’Reilly Automotive, Inc.; Panalpina Management AG; PETsMART, Inc.; RGH Enterprises, Inc.; Speed Transportation; Union Underwear Company, Inc; Unipart Logistics Limited; Vera Bradley Designs; VF Services, Inc.; and Wirtz Corporation.

2011 GUIDANCE

Manhattan Associates provided the following revenue and diluted earnings per share guidance for the full year 2011. As detailed in Note 10 in the supplemental attachments to this release, this guidance excludes restricted stock expense previously included in adjusted results.

Additionally, a full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.

		Guidance Range — 2011 Full year
		$ Range								% Growth range
Total revenue (in millions)		$	325			$	330				10	%			11	%
Diluted earnings per share:
Adjusted earnings per share — Non-GAAP			1.77				1.82				12	%			15	%
GAAP earnings per share			1.45				1.50				16	%			20	%

Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. These statements are forward-looking. Actual results may differ materially, especially in the current uncertain economic environment. These statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of this release.

Manhattan Associates will make its earnings release and published expectations available on its Web site (www.manh.com). Beginning March 16, 2011, Manhattan Associates will observe a “Quiet Period” during which Manhattan Associates and its representatives will not comment concerning previously published financial expectations. Prior to the start of the Quiet Period, the public can continue to rely on the expectations published in this 2011 Guidance section as still being Manhattan Associates’ current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. During the Quiet Period, previously published expectations should be considered historical only, speaking only as of or prior to the Quiet Period, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until the date when Manhattan Associates’ next quarterly earnings release is published, currently scheduled for the third week of April 2011.

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 1, 2011. 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 the website 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 35221052 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 2011 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 December 31, 2010.

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; and restructuring charges — all net of income tax effects and unusual tax adjustments. In addition, the Company’s forward-looking non-GAAP adjusted earnings per share included with its 2011 Guidance excludes all equity compensation expense. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.

The Company also has presented certain information excluding the effect between periods of changes in exchange rates between the U.S. dollar and the functional currencies of its foreign subsidiaries. Certain information regarding the effect of currency exchange rate fluctuation on results is included in Note 5 to the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES, INC.

Manhattan Associates continues to deliver on its 21-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. 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 December 31,								Year Ended December 31,
		2010				2009				2010				2009
		(unaudited)								(unaudited)
Revenue:
Software license		$	12,666			$	14,278			$	54,450			$	34,686
Services			52,023				42,668				213,750				189,850
Hardware and other			6,824				5,193				28,917				22,131
Total revenue			71,513				62,139				297,117				246,667
Costs and expenses:
Cost of license			1,541				1,105				6,172				4,726
Cost of services			25,145				20,176				98,776				84,349
Cost of hardware and other			5,478				4,242				23,844				18,386
Research and development			9,868				8,485				40,508				36,681
Sales and marketing			9,832				8,406				42,702				36,137
General and administrative			8,668				7,271				34,027				29,946
Depreciation and amortization			2,166				2,578				9,161				11,418
Restructuring charge			—				(10	)			—				3,882
Total costs and expenses			62,698				52,253				255,190				225,525
Operating income			8,815				9,886				41,927				21,142
Other income (loss), net			239				(374	)			(143	)			(756	)
Income before income taxes			9,054				9,512				41,784				20,386
Income tax provision			2,609				3,639				13,723				3,824
Net income		$	6,445			$	5,873			$	28,061			$	16,562
Basic earnings per share		$	0.31			$	0.27			$	1.31			$	0.74
Diluted earnings per share		$	0.29			$	0.26			$	1.25			$	0.73
Weighted average number of shares:
Basic			21,078				22,128				21,497				22,385
Diluted			22,350				22,667				22,450				22,558

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

		Three Months Ended December 31,								Year Ended December 31,
		2010				2009				2010				2009
		(unaudited)								(unaudited)
Operating income		$	8,815			$	9,886			$	41,927			$	21,142
Stock option expense (a)			860				1,374				3,792				5,153
Purchase amortization (b)			439				741				2,287				2,964
Restructuring charge (c)			—				(10	)			—				3,882
Sales tax recoveries (d)			—				—				(1,212	)			—
Adjusted operating income (Non-GAAP)		$	10,114			$	11,991			$	46,794			$	33,141
Income tax provision		$	2,609			$	3,639			$	13,723			$	3,824
Stock option expense (a)			303				563				1,315				1,791
Purchase amortization (b)			155				308				793				1,030
Restructuring charge (c)			—				84				—				1,349
Sales tax recoveries (d)			(2	)			—				(420	)			—
Unusual tax adjustments (e)			80				—				209				2,770
Adjusted income tax provision (Non-GAAP)		$	3,145			$	4,594			$	15,620			$	10,764
Net income		$	6,445			$	5,873			$	28,061			$	16,562
Stock option expense (a)			557				811				2,477				3,362
Purchase amortization (b)			284				433				1,494				1,934
Restructuring charge (c)			—				(94	)			—				2,533
Sales tax recoveries (d)			2				—				(792	)			—
Unusual tax adjustments (e)			(80	)			—				(209	)			(2,770	)
Adjusted net income (Non-GAAP)		$	7,208			$	7,023			$	31,031			$	21,621
Diluted EPS		$	0.29			$	0.26			$	1.25			$	0.73
Stock option expense (a)			0.02				0.04				0.11				0.15
Purchase amortization (b)			0.01				0.02				0.07				0.09
Restructuring charge (c)			—				—				—				0.11
Sales tax recoveries (d)			—				—				(0.04	)			—
Unusual tax adjustments (e)			—				—				(0.01	)			(0.12	)
Adjusted diluted EPS (Non-GAAP)		$	0.32			$	0.31			$	1.38			$	0.96
Fully diluted shares			22,350				22,667				22,450				22,558

		Three Months Ended December 31,								Year Ended December 31,
		2010				2009				2010				2009
Cost of services		$	97			$	154			$	487			$	630
Research and development			112				205				571				884
Sales and marketing			276				391				1,174				1,185
General and administrative			375				624				1,560				2,454
Total stock option expense		$	860			$	1,374			$	3,792			$	5,153

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

		December 31, 2010				December 31, 2009
		(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	120,744			$	120,217
Short term investments			4,414				—
Accounts receivable, net of allowance of $5,711 and $4,943 in 2010 and 2009, respectively			47,419				37,945
Deferred income taxes			7,214				5,745
Income taxes receivable			2,446				—
Prepaid expenses and other current assets			6,743				4,847
Total current assets			188,980				168,754
Property and equipment, net			14,833				15,759
Long-term investments			1,711				2,797
Goodwill, net			62,265				62,280
Acquisition-related intangible assets, net			1,186				3,473
Deferred income taxes			8,816				9,826
Other assets			2,673				1,822
Total assets		$	280,464			$	264,711
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	7,745			$	4,434
Accrued compensation and benefits			19,807				12,855
Accrued and other liabilities			13,856				15,430
Deferred revenue			44,974				37,436
Income taxes payable			—				796
Total current liabilities			86,382				70,951
Other non-current liabilities			10,282				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; 21,729,789 and 22,467,123 shares issued and outstanding at December 31, 2010 and 2009, respectively			217				225
Additional paid-in capital			487				2,892
Retained earnings			184,152				182,387
Accumulated other comprehensive loss			(1,056	)			(2,139	)
Total shareholders’ equity			183,800				183,365
Total liabilities and shareholders’ equity		$	280,464			$	264,711

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

		Year Ended December 31,
		2010				2009
		(unaudited)
Operating activities:
Net income		$	28,061			$	16,562
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			9,161				11,418
Stock compensation			10,420				8,622
(Gain) loss on disposal of equipment			(4	)			130
Tax benefit (deficiency) of stock awards exercised/vested			2,207				(1,023	)
Excess tax benefits from stock based compensation			(475	)			(64	)
Deferred income taxes			(463	)			2,077
Unrealized foreign currency loss			210				1,022
Changes in operating assets and liabilities:
Accounts receivable, net			(9,454	)			26,658
Other assets			(2,661	)			3,058
Accounts payable, accrued and other liabilities			8,271				(10,453	)
Income taxes			(2,934	)			(3,502	)
Deferred revenue			7,633				3,818
Net cash provided by operating activities			49,972				58,323
Investing activities:
Purchase of property and equipment			(5,872	)			(2,378	)
Net (purchases) maturities of investments			(3,011	)			84
Net cash used in investing activities			(8,883	)			(2,294	)
Financing activities:
Purchase of common stock			(77,703	)			(23,435	)
Proceeds from issuance of common stock from options exercised			36,368				1,662
Excess tax benefits from stock based compensation			475				64
Net cash used in financing activities			(40,860	)			(21,709	)
Foreign currency impact on cash			298				158
Net change in cash and cash equivalents			527				34,478
Cash and cash equivalents at beginning of period			120,217				85,739
Cash and cash equivalents at end of period		$	120,744			$	120,217

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1.

GAAP and Adjusted earnings (loss) per share by quarter are as follows:

		2009																				2010
		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
GAAP Diluted EPS		$	0.01			$	(0.02	)		$	0.50			$	0.26			$	0.73			$	0.32			$	0.36			$	0.28			$	0.29			$	1.25
Adjustments to GAAP:
Stock option expense			0.04				0.03				0.04				0.04				0.15				0.03				0.03				0.03				0.02				0.11
Purchase amortization			0.02				0.02				0.02				0.02				0.09				0.02				0.02				0.02				0.01				0.07
Restructuring charge			—				0.12				—				—				0.11				—				—				—				—				—
Sales tax recoveries			—				—				—				—				—				(0.01	)			—				—				—				(0.04	)
Unusual tax adjustments			—				—				(0.12	)			—				(0.12	)			—				—				—				—				(0.01	)
Adjusted Diluted EPS		$	0.07			$	0.14			$	0.43			$	0.31			$	0.96			$	0.36			$	0.38			$	0.32			$	0.32			$	1.38

As discussed below in note 10, in 2011, to be consistent with other companies in the software industry, we will exclude restricted stock expense from our adjusted results. For comparability, we will also present historical adjusted results excluding restricted stock expense. See note 10 for the restricted stock expense impact on the reported results.

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				3rd Qtr				4th Qtr				Full Year
Revenue:
Americas		$	50,827			$	47,372			$	55,626			$	52,733			$	206,558			$	61,889			$	64,875			$	62,555			$	59,631			$	248,950
EMEA			7,030				7,818				6,527				6,650				28,025				7,989				8,587				8,266				7,324				32,166
APAC			2,968				3,219				3,141				2,756				12,084				4,071				4,179				3,193				4,558				16,001
		$	60,825			$	58,409			$	65,294			$	62,139			$	246,667			$	73,949			$	77,641			$	74,014			$	71,513			$	297,117
GAAP Operating Income (Loss):
Americas		$	260			$	(407	)		$	10,736			$	10,859			$	21,448			$	10,333			$	9,836			$	8,121			$	7,578			$	35,868
EMEA			738				1,124				20				(789	)			1,093				418				1,530				1,214				523				3,685
APAC			(371	)			(1,143	)			299				(184	)			(1,399	)			732				651				277				714				2,374
		$	627			$	(426	)		$	11,055			$	9,886			$	21,142			$	11,483			$	12,017			$	9,612			$	8,815			$	41,927
Adjustments (pre-tax):
Americas:
Stock option expense		$	1,400			$	1,010			$	1,369			$	1,374			$	5,153			$	1,178			$	901			$	853			$	860			$	3,792
Purchase amortization			741				741				741				741				2,964				638				639				571				439				2,287
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			$	1,424			$	1,299			$	4,867
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			$	1,424			$	1,299			$	4,867
Adjusted non-GAAP Operating Income (Loss):
Americas		$	2,460			$	4,304			$	12,846			$	12,974			$	32,584			$	11,729			$	10,584			$	9,545			$	8,877			$	40,735
EMEA			738				1,144				20				(789	)			1,113				418				1,530				1,214				523				3,685
APAC			(367	)			(294	)			299				(194	)			(556	)			732				651				277				714				2,374
		$	2,831			$	5,154			$	13,165			$	11,991			$	33,141			$	12,879			$	12,765			$	11,036			$	10,114			$	46,794

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				3rd Qtr				4th Qtr				Full Year
Professional services		$	32,345			$	30,767			$	27,158			$	22,500			$	112,770			$	33,960			$	34,349			$	33,349			$	30,213			$	131,871
Customer support and software enhancements			18,498				18,655				19,759				20,168				77,080				19,501				20,431				20,137				21,810				81,879
Total services revenue		$	50,843			$	49,422			$	46,917			$	42,668			$	189,850			$	53,461			$	54,780			$	53,486			$	52,023			$	213,750

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				3rd Qtr				4th Qtr				Full Year
Hardware revenue		$	3,080			$	2,992			$	5,086			$	3,474			$	14,632			$	4,518			$	5,053			$	5,763			$	4,612			$	19,946
Billed travel			1,980				1,869				1,931				1,719				7,499				1,763				2,323				2,673				2,212			$	8,971
Total hardware and other revenue		$	5,060			$	4,861			$	7,017			$	5,193			$	22,131			$	6,281			$	7,376			$	8,436			$	6,824			$	28,917

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				3rd Qtr				4th Qtr				Full Year
Revenue		$	(2,387	)		$	(1,996	)		$	(764	)		$	876			$	(4,271	)		$	1,053			$	(72	)		$	(548	)		$	(217	)		$	216
Costs and expenses			(3,307	)			(2,560	)			(1,286	)			1,205				(5,948	)			1,346				235				(262	)			(26	)			1,293
Operating income			920				564				522				(329	)			1,677				(293	)			(307	)			(286	)			(191	)			(1,077	)
Foreign currency gains (losses) in other income			(366	)			(506	)			294				(427	)			(1,005	)			(415	)			187				(436	)			—				(664	)
		$	554			$	58			$	816			$	(756	)		$	672			$	(708	)		$	(120	)		$	(722	)		$	(191	)		$	(1,741	)

MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

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				3rd Qtr				4th Qtr				Full Year
Operating income		$	1,129			$	800			$	458				(249	)		$	2,138			$	(395	)		$	(340	)		$	(180	)			(181	)		$	(1,096	)
Foreign currency gains (losses) in other income			336				(367	)			2				(276	)			(305	)			(289	)			246				(302	)			64				(281	)
Total impact of changes in the Indian Rupee		$	1,465			$	433			$	460			$	(525	)		$	1,833			$	(684	)		$	(94	)		$	(482	)		$	(117	)		$	(1,377	)