manh-8k_20191022.htm
false MANHATTAN ASSOCIATES INC 0001056696 0001056696 2019-10-22 2019-10-22

 

 

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):  October 22, 2019

 

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, Tenth Floor, 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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock

MANH

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

 

 

 


Item 2.02  Results of Operations and Financial Condition.

 

On October 22, 2019, Manhattan Associates, Inc. (“we”, “our”, “us” or the “Company”) issued a press release providing its financial results for the three and nine months ended September 30, 2019. 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 and margin, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share and certain adjusted cost measures (collectively, “adjusted results”), which variously exclude the impact of equity-based compensation and acquisition-related costs, and the related income tax effects of these items, as well as the impact of the enactment of the Tax Cuts and Jobs Act. We have developed our internal reporting, compensation and planning systems using these additional financial measures.

These various measures are not in accordance with, or alternatives 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.

Non-GAAP measures used in the press release exclude the impact of the items described above for the following reasons:

 

 

Equity-based compensation expense typically does not require cash settlement by the Company. We do not include this expense and the related income tax effects when assessing our operating performance, and believe our peers also typically present non-GAAP results that exclude equity-based compensation expense.

 

 

From time to time, we incur acquisition-related costs consisting primarily of (i) accounting and legal expenses, whether or not we ultimately consummate a proposed acquisition, (ii) certain unusual costs, such as employee retention benefits, resulting from pre-acquisition arrangements, and (iii) amortization of acquisition-related intangible assets.  These costs are difficult to predict and, if and when incurred, generally are not expenses associated with our core operations.  We exclude these costs and the related income tax effects from our internal assessments of our operating performance, and believe our peers also typically present non-GAAP results that exclude similar acquisition-related costs.

 

 

The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in a provisional net one-time charge based on a reasonable estimate of the income tax effects. The charge was primarily from a tax on accumulated foreign earnings and the remeasurement of deferred tax assets. We believe tax reform on the scale of the Tax Cuts and Jobs Act is infrequent, and that the resulting charge is therefore an unusual one. We have excluded the charge from our internal assessment of our operating performance and non-GAAP results.

2

 


We believe reporting adjusted results facilitates investors’ understanding of our historical operating trends, because it provides supplemental measurement information in evaluating the operating results of our business. We also believe that adjusted results provide a basis for comparisons to other companies in the industry and enable investors to evaluate our operating performance in a manner consistent with our internal basis of measurement.  Management refers to adjusted results 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 results facilitate management’s internal comparisons to our historical operating results and comparisons to competitors’ operating results.

Further, we rely on adjusted results 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, restructurings 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 October 22, 2019

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

3

 

 


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Manhattan Associates, Inc.

 

 

 

By:  /s/ Dennis B. Story

Dennis B. Story

Executive Vice President, Chief Financial Officer and Treasurer

 

 

 

Dated:  October 22, 2019

 

4

 

manh-ex991_6.htm

Exhibit 99.1

 

 

Contact:

 

Matt Humphries, CFA

 

Rick Fernandez

 

 

Senior Director,

Investor Relations

 

Senior Manager, 

Corporate Communications

 

 

Manhattan Associates, Inc.

 

Manhattan Associates, Inc.

 

 

678-597-6574

 

678-597-6988

 

 

mhumphries@manh.com

 

rfernandez@manh.com

 

 

 

 

 

 

Manhattan Associates Reports Record Third Quarter 2019 Revenue

Company raises full-year Revenue and EPS guidance

 

ATLANTA – October 22, 2019 – Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported record total revenue of $162.3 million for the third quarter ended September 30, 2019, applying the new revenue recognition standard retrospectively. GAAP diluted earnings per share for Q3 2019 was $0.42 compared to $0.43 in Q3 2018. Non-GAAP adjusted diluted earnings per share for Q3 2019 was $0.51 compared to $0.49 in Q3 2018.

“Due to robust demand across all of our core solutions, Manhattan Associates posted strong organic growth in the quarter, resulting in an all-time record revenue quarter. Cloud, License and Services revenue momentum exceeded our expectations driving exceptional operating results in our ongoing Cloud transition,” said Manhattan Associates president and CEO Eddie Capel. “Our suite of Manhattan Active® omnichannel, inventory and supply chain solutions continues to drive solid pipeline and revenue momentum positioning us well for the balance of 2019 and beyond. Based on our outlook for the remainder of the year, we are raising our 2019 full-year revenue and earnings guidance.”

“While appropriately cautious regarding global geopolitical and economic volatility, we continue to be optimistic on the market opportunity ahead, with supply chain complexity and retail evolution in our target markets bringing continued need for our solutions. Positive customer feedback and strong competitive win rates, combined with continued product advancements, are enabling our clients to Push Possible® with their commerce supply chains,” added Mr. Capel.

THIRD QUARTER 2019 FINANCIAL SUMMARY:

 

Consolidated total revenue was $162.3 million in Q3 2019, compared to $142.4 million in Q3 2018. License revenue was $15.5 million in Q3 2019, compared to $11.5 million in Q3 2018. Cloud subscription revenue was $14.2 million in Q3 2019, compared to $6.5

 


 

 

 

 

million in Q3 2018. Service revenue was $91.6 million in Q3 2019, compared to $84.1 million in Q3 2018.

 

 

GAAP diluted earnings per share was $0.42 in Q3 2019 compared to $0.43 in Q3 2018.

 

 

Adjusted diluted earnings per share, a non-GAAP measure, was $0.51 in Q3 2019, compared to $0.49 in Q3 2018.

 

 

GAAP operating income was $35.0 million in Q3 2019, compared to $36.1 million in Q3 2018.

 

 

Adjusted operating income, a non-GAAP measure, was $43.1 million in Q3 2019, compared to $41.5 million in Q3 2018.

 

 

Cash flow from operations was $39.9 million for Q3 2019, compared to $35.2 million for Q3 2018. Days Sales Outstanding was 61 days at September 30, 2019, compared to 59 days at June 30, 2019.

 

 

Cash and investments totaled $113.6 million at September 30, 2019, compared to $119.4 million at June 30, 2019.

 

 

During the three months ended September 30, 2019, the Company repurchased 429,539 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $36.0 million. In October 2019, our Board authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock.

 

NINE MONTH 2019 FINANCIAL SUMMARY:

 

Consolidated total revenue for the nine months ended September 30, 2019, was $465.0 million, compared to $414.8 million for the nine months ended September 30, 2018. License revenue was $39.6 million for the nine months ended September 30, 2019, compared to $32.1 million for the nine months ended September 30, 2018. Cloud subscription revenue was $31.1 million for the nine months ended September 30, 2019, compared to $16.3 million for the nine months ended September 30, 2018. Service revenue was $274.2 million for the nine months ended September 30, 2019, compared to $245.2 million, for the nine months ended September 30, 2018

 

 

GAAP diluted earnings per share for the nine months ended September 30, 2019, was $1.06, compared to $1.18 for the nine months ended September 30, 2018.  

 


 

 

 

 

Adjusted diluted earnings per share a non-GAAP measure, was $1.34 for the nine months ended September 30, 2019, compared to $1.33 for the nine months ended September 30, 2018.

 

 

GAAP operating income was $90.9 million for the nine months ended September 30, 2019, compared to $99.6 million for the nine months ended September 30, 2018.

 

 

Adjusted operating income a non-GAAP measure, was $114.8 million for the nine months ended September 30, 2019, compared to $114.5 million for the nine months ended September 30, 2018. 

 

 

Cash flow from operations was $112.3 million for the nine months ended September 30, 2019, compared to $103.3 million for the nine months ended September 30, 2018.

 

 

During the nine months ended September 30, 2019, the Company repurchased 1,195,203 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $80.9 million.

 



 

 

 

2019 GUIDANCE

Manhattan Associates provides the following updated revenue, operating margin and diluted earnings per share guidance for the full year 2019:

 

 

Guidance Range - 2019 Full Year

 

($'s in millions, except operating margin and EPS)

$ Range

 

 

% Growth Range

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue - current guidance

$

610

 

 

$

614

 

 

9%

 

 

10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue - previous guidance

$

598

 

 

$

604

 

 

7%

 

 

8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin - current guidance

 

17.7

%

 

 

17.9

%

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

5.3

%

 

 

5.3

%

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin(1) - current guidance

 

23.0

%

 

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin - previous guidance

 

15.6

%

 

 

15.8

%

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

5.4

%

 

 

5.4

%

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin(1) - previous guidance

 

21.0

%

 

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (EPS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS - current guidance

$

1.26

 

 

$

1.27

 

 

-20%

 

 

-20%

 

 

 

Equity-based compensation, net of tax

 

0.37

 

 

 

0.38

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS(1) - current guidance

$

1.63

 

 

$

1.65

 

 

-9%

 

 

-8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS - previous guidance

$

1.08

 

 

$

1.12

 

 

-32%

 

 

-29%

 

 

 

Equity-based compensation, net of tax

 

0.38

 

 

 

0.38

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS(1) - previous guidance

$

1.46

 

 

$

1.50

 

 

-18%

 

 

-16%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based

 

 

 

compensation and acquisition-related costs, and the related income tax effects of these items if applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. Those statements, including the guidance provided above, do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

Manhattan Associates will make its earnings release and published expectations available on its website (www.manh.com). Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance above, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.


 

 

 

CONFERENCE CALL

The Company’s conference call regarding its third quarter financial results will be held today, October 22, 2019, at 4:30 p.m. Eastern Time. We invite investors 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.

Those who cannot listen to the live broadcast may access a replay shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 2677286 or via the web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ fourth quarter 2019 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Company’s historical and projected operating results. These measures are not in accordance with – or alternatives to – GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors’ ability to understand and compare the Company’s results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three and nine months ended September 30, 2019.  

Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation, acquisition-related costs and the amortization of these costs, and (from time to time) restructuring charges – all net of income tax effects, and the impact of the enactment of the Tax Cuts and Jobs Act. We include reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.


 

 

 

ABOUT MANHATTAN ASSOCIATES

Manhattan Associates is a technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers. 

Manhattan Associates designs, builds and delivers leading edge cloud and on-premise solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc.  Forward-looking statements in this press release include, without limitation, the information set forth under “2019 Guidance,” statements we make about market adoption of our cloud-based solution and other statements identified by words such as “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate,” and similar expressions.  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: uncertainty about the global economy, risks related from transitioning our business from a traditional perpetual license software company (generally hosted by our customers on their own premises and equipment) to a subscription-based software-as-a service/cloud-based model, disruption in the retail sector, the possible effect of new U.S. tariffs on imports from other countries (and possible responsive tariffs on U.S. exports by other countries) on international commerce, delays in product development, competitive pressures, software errors, information security breaches and the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. 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 Income

(in thousands, except per share amounts)

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

14,242

 

 

$

6,455

 

 

$

31,110

 

 

$

16,301

 

Software license

 

 

15,486

 

 

 

11,526

 

 

 

39,621

 

 

 

32,054

 

Maintenance

 

 

37,763

 

 

 

37,177

 

 

 

111,185

 

 

 

110,567

 

Services

 

 

91,626

 

 

 

84,136

 

 

 

274,208

 

 

 

245,160

 

Hardware

 

 

3,158

 

 

 

3,057

 

 

 

8,896

 

 

 

10,709

 

Total revenue

 

 

162,275

 

 

 

142,351

 

 

 

465,020

 

 

 

414,791

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software license

 

 

748

 

 

 

1,211

 

 

 

1,963

 

 

 

4,615

 

Cost of cloud subscriptions, maintenance and services

 

 

73,618

 

 

 

59,975

 

 

 

211,151

 

 

 

173,446

 

Research and development

 

 

22,614

 

 

 

18,453

 

 

 

65,824

 

 

 

53,688

 

Sales and marketing

 

 

12,125

 

 

 

10,726

 

 

 

41,426

 

 

 

37,419

 

General and administrative

 

 

16,236

 

 

 

13,711

 

 

 

48,091

 

 

 

39,396

 

Depreciation and amortization

 

 

1,937

 

 

 

2,179

 

 

 

5,710

 

 

 

6,616

 

Total costs and expenses

 

 

127,278

 

 

 

106,255

 

 

 

374,165

 

 

 

315,180

 

Operating income

 

 

34,997

 

 

 

36,096

 

 

 

90,855

 

 

 

99,611

 

Other income, net

 

 

810

 

 

 

1,538

 

 

 

368

 

 

 

3,245

 

Income before income taxes

 

 

35,807

 

 

 

37,634

 

 

 

91,223

 

 

 

102,856

 

Income tax provision

 

 

8,700

 

 

 

9,179

 

 

 

22,219

 

 

 

24,081

 

Net income

 

$

27,107

 

 

$

28,455

 

 

$

69,004

 

 

$

78,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.42

 

 

$

0.43

 

 

$

1.07

 

 

$

1.18

 

Diluted earnings per share

 

$

0.42

 

 

$

0.43

 

 

$

1.06

 

 

$

1.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

64,247

 

 

 

65,658

 

 

 

64,591

 

 

 

66,539

 

Diluted

 

 

64,992

 

 

 

65,901

 

 

 

65,112

 

 

 

66,717

 

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Reconciliation of Selected GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

34,997

 

 

$

36,096

 

 

$

90,855

 

 

$

99,611

 

Equity-based compensation (a)

 

 

8,002

 

 

 

5,303

 

 

 

23,646

 

 

 

14,573

 

Purchase amortization (c)

 

 

108

 

 

 

107

 

 

 

323

 

 

 

322

 

Adjusted operating income (Non-GAAP)

 

$

43,107

 

 

$

41,506

 

 

$

114,824

 

 

$

114,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

$

8,700

 

 

$

9,179

 

 

$

22,219

 

 

$

24,081

 

Equity-based compensation (a)

 

 

1,960

 

 

 

1,299

 

 

 

5,793

 

 

 

3,570

 

Tax (deficiency) benefit of stock awards vested (b)

 

 

88

 

 

 

41

 

 

 

146

 

 

 

771

 

Purchase amortization (c)

 

 

26

 

 

 

26

 

 

 

79

 

 

 

79

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

348

 

Adjusted income tax provision (Non-GAAP)

 

$

10,774

 

 

$

10,545

 

 

$

28,237

 

 

$

28,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

27,107

 

 

$

28,455

 

 

$

69,004

 

 

$

78,775

 

Equity-based compensation (a)

 

 

6,042

 

 

 

4,004

 

 

 

17,853

 

 

 

11,003

 

Tax (deficiency) benefit of stock awards vested (b)

 

 

(88

)

 

 

(41

)

 

 

(146

)

 

 

(771

)

Purchase amortization (c)

 

 

82

 

 

 

81

 

 

 

244

 

 

 

243

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(348

)

Adjusted net income (Non-GAAP)

 

$

33,143

 

 

$

32,499

 

 

$

86,955

 

 

$

88,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.42

 

 

$

0.43

 

 

$

1.06

 

 

$

1.18

 

Equity-based compensation (a)

 

 

0.09

 

 

 

0.06

 

 

 

0.27

 

 

 

0.16

 

Tax (deficiency) benefit of stock awards vested (b)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.01

)

Purchase amortization (c)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.01

)

Adjusted diluted EPS (Non-GAAP)

 

$

0.51

 

 

$

0.49

 

 

$

1.34

 

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully diluted shares

 

 

64,992

 

 

 

65,901

 

 

 

65,112

 

 

 

66,717

 

 

(a)

Adjusted results exclude all equity-based compensation, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed today with the SEC. Equity-based compensation is included in the following GAAP operating expense lines for the three and nine months ended September 30, 2019, and 2018:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

$

2,407

 

 

$

1,531

 

 

$

6,952

 

 

$

4,204

 

Research and development

 

 

1,582

 

 

 

1,074

 

 

 

4,561

 

 

 

3,135

 

Sales and marketing

 

 

638

 

 

 

591

 

 

 

2,433

 

 

 

1,496

 

General and administrative

 

 

3,375

 

 

 

2,107

 

 

 

9,700

 

 

 

5,738

 

Total equity-based compensation

 

$

8,002

 

 

$

5,303

 

 

$

23,646

 

 

$

14,573

 

 

 

 


 

(b)

Adjustments represent the excess tax benefits and tax deficiencies of the stock awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible for an award of equity instruments on our tax return is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we excluded equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also excluded the related tax benefit (expense) generated upon their vesting.

 

(c)

Adjustments represent purchased intangibles amortization from a prior acquisition. We exclude that amortization from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC.

 

(d)

In the fourth quarter of 2017, we recorded a provisional net one-time tax of $2.8 million due to the enactment of the Tax Cuts and Jobs Act in December 2017. We calculated that amount based on a reasonable estimate of the income tax effects, primarily from a tax on accumulated foreign earnings and the remeasurement of deferred tax assets. We adjusted our estimate by $0.3 million during the nine months ended September 30, 2018.


 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

113,618

 

 

$

99,126

 

Short-term investments

 

 

-

 

 

 

1,440

 

Accounts receivable, net of allowance of $2,611 and $2,589, respectively

 

 

108,397

 

 

 

100,108

 

Prepaid expenses and other current assets

 

 

19,580

 

 

 

14,708

 

Total current assets

 

 

241,595

 

 

 

215,382

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

20,959

 

 

 

14,318

 

Operating lease right-of-use assets

 

 

37,178

 

 

 

-

 

Goodwill, net

 

 

62,233

 

 

 

62,240

 

Deferred income taxes

 

 

6,747

 

 

 

5,442

 

Other assets

 

 

11,585

 

 

 

9,768

 

Total assets

 

$

380,297

 

 

$

307,150

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

21,190

 

 

$

18,181

 

Accrued compensation and benefits

 

 

40,023

 

 

 

29,485

 

Accrued and other liabilities

 

 

19,334

 

 

 

12,161

 

Deferred revenue

 

 

97,302

 

 

 

81,894

 

Income taxes payable

 

 

4,645

 

 

 

3,543

 

Total current liabilities

 

 

182,494

 

 

 

145,264

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

33,929

 

 

 

-

 

Other non-current liabilities

 

 

12,224

 

 

 

14,739

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2019 and 2018

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 63,900,528 and 64,860,419 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

639

 

 

 

649

 

Retained earnings

 

 

169,560

 

 

 

163,359

 

Accumulated other comprehensive loss

 

 

(18,549

)

 

 

(16,861

)

Total shareholders' equity

 

 

151,650

 

 

 

147,147

 

Total liabilities and shareholders' equity

 

$

380,297

 

 

$

307,150

 

 

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

69,004

 

 

$

78,775

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,710

 

 

 

6,616

 

Equity-based compensation

 

 

23,646

 

 

 

14,573

 

(Gain) loss on disposal of equipment

 

 

(436

)

 

 

56

 

Deferred income taxes

 

 

(1,331

)

 

 

(244

)

Unrealized foreign currency gain

 

 

(570

)

 

 

(1,373

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(9,178

)

 

 

(1,995

)

Other assets

 

 

(7,042

)

 

 

(5,296

)

Accounts payable, accrued and other liabilities

 

 

16,271

 

 

 

11,059

 

Income taxes

 

 

576

 

 

 

(7,488

)

Deferred revenue

 

 

15,696

 

 

 

8,635

 

Net cash provided by operating activities

 

 

112,346

 

 

 

103,318

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(11,358

)

 

 

(5,536

)

Net maturities (purchases) of investments

 

 

1,439

 

 

 

(5,196

)

Net cash used in investing activities

 

 

(9,919

)

 

 

(10,732

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(86,459

)

 

 

(124,558

)

Net cash used in financing activities

 

 

(86,459

)

 

 

(124,558

)

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(1,476

)

 

 

(3,801

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

14,492

 

 

 

(35,773

)

Cash and cash equivalents at beginning of period

 

 

99,126

 

 

 

125,522

 

Cash and cash equivalents at end of period

 

$

113,618

 

 

$

89,749

 

 


 

 


 

MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

1.

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

 

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

YTD

 

GAAP Diluted EPS

$

0.33

 

 

$

0.42

 

 

$

0.43

 

 

$

0.40

 

 

$

1.58

 

 

$

0.32

 

 

$

0.32

 

 

$

0.42

 

 

$

1.06

 

Adjustments to GAAP: