manh-8k_20200421.htm
false 0001056696 0001056696 2020-04-21 2020-04-21

 

 

United States

Securities And Exchange Commission

Washington, DC 20549

______________

FORM 8-K

_____________

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  April 21, 2020

 

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 April 21, 2020, Manhattan Associates, Inc. (“we”, “our”, or the “Company”) issued a press release providing its financial results for the three months ended March 31, 2020. 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. 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 when assessing our operating performance and believe our peers also typically present non-GAAP results that exclude equity-based compensation expense. We similarly exclude the tax benefits or deficiencies of vested stock awards caused by differences in the amount deductible for tax purposes related to the stock award from the compensation expense recorded for financial reporting purposes.

 

 

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.

 

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

2

 


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 April 21, 2020

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:  April 21, 2020

 

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 First Quarter 2020 Revenue

 

ATLANTA – April 21, 2020 – Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported record first quarter revenue of $153.9 million for the first quarter ended March 31, 2020, applying the new revenue recognition standard retrospectively. GAAP diluted earnings per share for Q1 2020 was $0.35 compared to $0.32 in Q1 2019. Non-GAAP adjusted diluted earnings per share for Q1 2020 was $0.40 compared to $0.41 in Q1 2019.

“Q1 was a solid quarter for Manhattan Associates, especially in light of the impact the COVID-19 pandemic is having globally,” said Manhattan Associates president and CEO Eddie Capel. “Our growing cloud business outperformed, with noticeable revenue growth and continued strength in overall bookings. Despite near-term uncertainty, we continue to see growing enthusiasm for our unified supply chain and omnichannel commerce solutions as companies around the world are beginning to realize more than ever that the modern supply chain is absolutely mission-critical and strategically important.”

Regarding the COVID-19 pandemic, Mr. Capel added, “We are seeing some shifts in the expected timing of deal closings from Q2 to the second half of the year and delays of some of our services projects. But in general, we are not seeing cancelations and are seeing a larger pipeline of opportunities for the balance of the year versus a quarter ago. During this period of greater uncertainty, we are focusing first and foremost on the health and safety of our employees, while continuing to best serve our customers in a virtual environment. At the same time, we are taking appropriate actions, such as previously announced expense management strategies, that we believe will allow us to manage through this volatile period while ensuring we are best-positioned to capitalize on the market opportunities when we return to a more normal operating environment.”

“We remain confident on our long-term growth trajectory,” Mr. Capel concluded, “but we are taking a conservative approach as we position the business in the near term.” Mr. Capel stated


 

 

 

that, “As such, we are updating our full-year financial guidance to reflect what we know today and with the visibility we have for the remainder of the year.”

FIRST QUARTER 2020 FINANCIAL SUMMARY:

 

Consolidated total revenue was $153.9 million in Q1 2020, compared to $148.4 million in Q1 2019.

 

 

o

Cloud subscription revenue was $17.3 million in Q1 2020, compared to $7.9 million in Q1 2019.

 

 

o

License revenue was $9.7 million in Q1 2020, compared to $12.4 million in Q1 2019.

 

 

o

Service revenue was $87.4 million in Q1 2020, compared to $88.6 million in Q1 2019.

 

 

GAAP diluted earnings per share was $0.35 in Q1 2020 compared to $0.32 in Q1 2019.

 

 

Adjusted diluted earnings per share, a non-GAAP measure, was $0.40 in Q1 2020, compared to $0.41 in Q1 2019.

 

 

GAAP operating income was $24.2 million in Q1 2020, compared to $28.3 million in Q1 2019.

 

 

Adjusted operating income, a non-GAAP measure, was $31.9 million in Q1 2020, compared to $35.6 million in Q1 2019.

 

 

Cash flow from operations was $11.6 million for Q1 2020, compared to $35.2 million for Q1 2019. Days Sales Outstanding was 67 days at March 31, 2020, compared to 61 days at December 31, 2019.

 

 

Cash and investments totaled $75.3 million at March 31, 2020, compared to $110.7 million at December 31, 2019.

 

 

During the three months ended March 31, 2020, the Company repurchased 337,007 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $25.0 million.

 

 

In April 2020, our Board authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock but also suspended the Company’s stock

 


 

 

 

 

repurchase program indefinitely because of Covid-19-related considerations and until conditions improve for the resumption of the program.

 



 

 

 

2020 GUIDANCE

Manhattan Associates provides the following updated revenue, operating margin and diluted earnings per share guidance for the full year 2020:

 

 

Guidance Range - 2020 Full Year

 

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

$ Range

 

 

% Growth Range

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue - current guidance

$

541

 

 

$

565

 

 

-12%

 

 

-9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue - previous guidance

$

644

 

 

$

656

 

 

4%

 

 

6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin - current guidance

 

17.5

%

 

 

17.9

%

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

5.4

%

 

 

5.2

%

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin(1) - current guidance

 

22.9

%

 

 

23.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin - previous guidance

 

14.6

%

 

 

15.2

%

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

5.4

%

 

 

5.3

%

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin(1) - previous guidance

 

20.0

%

 

 

20.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (EPS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS - current guidance

$

1.16

 

 

$

1.24

 

 

-12%

 

 

-6%

 

 

 

Equity-based compensation, net of tax

 

0.40

 

 

 

0.40

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefit on stock vesting(2)

 

(0.06

)

 

 

(0.06

)

 

 

 

 

 

 

 

 

 

 

Adjusted EPS(1) - current guidance

$

1.50

 

 

$

1.58

 

 

-14%

 

 

-9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS - previous guidance

$

1.12

 

 

$

1.19

 

 

-15%

 

 

-10%

 

 

 

Equity-based compensation, net of tax

 

0.47

 

 

 

0.47

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefit on stock vesting(2)

 

(0.06

)

 

 

(0.06

)

 

 

 

 

 

 

 

 

 

 

Adjusted EPS(1) - previous guidance

$

1.53

 

 

$

1.60

 

 

-12%

 

 

-8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

 

 

 

(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2020.

 

 

 

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. See our cautionary note regarding “forward-looking statements” below. We note in particular that the severity, duration and ultimate impact of the COVID-19 pandemic are difficult to predict at this time. In addition, those statements 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 first quarter 2020 financial results will be held today, April 21, 2020, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. 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 7183662 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’ second quarter 2020 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 months ended March 31, 2020.


 

 

 

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, (from time to time) restructuring charges – all net of income tax effects. 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 “2020 Guidance,” any statements about the future effect of the COVID-19 pandemic on our business, customers or the global economy, our business prospects following the pandemic 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 of those 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 those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: the risk that the duration and severity of the COVID-19 pandemic, and its ultimate effects on the global economy, our customers and our business, may be worse than expected; 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 and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products’ technology and customer implementations; and the other risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, 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 March 31,

 

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

17,260

 

 

$

7,859

 

Software license

 

 

9,735

 

 

 

12,414

 

Maintenance

 

 

35,744

 

 

 

36,099

 

Services

 

 

87,406

 

 

 

88,631

 

Hardware

 

 

3,758

 

 

 

3,401

 

Total revenue

 

 

153,903

 

 

 

148,404

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of software license

 

 

555

 

 

 

592

 

Cost of cloud subscriptions, maintenance and services

 

 

74,276

 

 

 

66,578

 

Research and development

 

 

23,328

 

 

 

21,213

 

Sales and marketing

 

 

13,088

 

 

 

14,781

 

General and administrative

 

 

16,114

 

 

 

15,050

 

Depreciation and amortization

 

 

2,346

 

 

 

1,914

 

Total costs and expenses

 

 

129,707

 

 

 

120,128

 

Operating income

 

 

24,196

 

 

 

28,276

 

Other income (loss), net

 

 

1,420

 

 

 

(371

)

Income before income taxes

 

 

25,616

 

 

 

27,905

 

Income tax provision

 

 

3,086

 

 

 

6,933

 

Net income

 

$

22,530

 

 

$

20,972

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.35

 

 

$

0.32

 

Diluted earnings per share

 

$

0.35

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

Basic

 

 

63,592

 

 

 

64,909

 

Diluted

 

 

64,342

 

 

 

65,204

 

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Reconciliation of Selected GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

 

 

 

 

Three Months Ended March 31,

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

$

24,196

 

 

$

28,276

 

Equity-based compensation (a)

 

 

 

7,564

 

 

 

7,182

 

Purchase amortization (c)

 

 

 

107

 

 

 

108

 

Adjusted operating income (Non-GAAP)

 

 

$

31,867

 

 

$

35,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

$

3,086

 

 

$

6,933

 

Equity-based compensation (a)

 

 

 

890

 

 

 

1,760

 

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

 

 

 

3,682

 

 

 

(96

)

Purchase amortization (c)

 

 

 

27

 

 

 

26

 

Adjusted income tax provision (Non-GAAP)

 

 

$

7,685

 

 

$

8,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

22,530

 

 

$

20,972

 

Equity-based compensation (a)

 

 

 

6,674

 

 

 

5,422

 

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

 

 

 

(3,682

)

 

 

96

 

Purchase amortization (c)

 

 

 

81

 

 

 

82

 

Adjusted net income (Non-GAAP)

 

 

$

25,603

 

 

$

26,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

 

$

0.35

 

 

$

0.32

 

Equity-based compensation (a)

 

 

 

0.10

 

 

 

0.08

 

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

 

 

 

(0.06

)

 

 

-

 

Purchase amortization (c)

 

 

 

-

 

 

 

-

 

Adjusted diluted EPS (Non-GAAP)

 

 

$

0.40

 

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

Fully diluted shares

 

 

 

64,342

 

 

 

65,204

 

 

(a)

Adjusted results exclude all equity-based compensation to facilitate comparison with our peers and because it typically does not require cash settlement. As explained in our Current Report on Form 8-K filed today with the SEC, we do not include this expense when assessing our operating performance. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly due to Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives. The Tax Cuts and Jobs Act further increased those limitations. Thus, effective January 2019, we changed from applying an overall effective rate in our tax adjustment to using the actual tax benefit for equity-based compensation included in our GAAP results after considering the impact of non-deductible equity-based compensation.

 

 

 

 

Three Months Ended March 31,

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

$

2,285

 

 

$

2,097

 

Research and development

 

 

 

1,541

 

 

 

1,376

 

Sales and marketing

 

 

 

803

 

 

 

819

 

General and administrative

 

 

 

2,935

 

 

 

2,890

 

Total equity-based compensation

 

 

$

7,564

 

 

$

7,182

 

 

(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.

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

March 31, 2020

 

 

December 31, 2019

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,279

 

 

$

110,678

 

Accounts receivable, net of allowance of $3,360 and $2,826, at March 31, 2020 and December 31, 2019, respectively

 

 

112,467

 

 

 

100,937

 

Prepaid expenses and other current assets

 

 

29,209

 

 

 

20,426

 

Total current assets

 

 

216,955

 

 

 

232,041

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

21,189

 

 

 

22,725

 

Operating lease right-of-use assets

 

 

33,713

 

 

 

35,896

 

Goodwill, net

 

 

62,234

 

 

 

62,237

 

Deferred income taxes

 

 

1,212

 

 

 

6,814

 

Other assets

 

 

12,741

 

 

 

12,566

 

Total assets

 

$

348,044

 

 

$

372,279

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

22,517

 

 

$

20,561

 

Accrued compensation and benefits

 

 

28,906

 

 

 

45,991

 

Accrued and other liabilities

 

 

18,801

 

 

 

19,325

 

Deferred revenue

 

 

105,475

 

 

 

94,371

 

Income taxes payable

 

 

489

 

 

 

1,348

 

Total current liabilities

 

 

176,188

 

 

 

181,596

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

30,093

 

 

 

32,416

 

Other non-current liabilities

 

 

15,894

 

 

 

15,989

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2020 and 2019

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 63,495,687 and 63,456,986 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively

 

 

635

 

 

 

635

 

Retained earnings

 

 

146,552

 

 

 

159,490

 

Accumulated other comprehensive loss

 

 

(21,318

)

 

 

(17,847

)

Total shareholders' equity

 

 

125,869

 

 

 

142,278

 

Total liabilities and shareholders' equity

 

$

348,044

 

 

$

372,279

 

 

 

 


 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

22,530

 

 

$

20,972

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,346

 

 

 

1,914

 

Equity-based compensation

 

 

7,564

 

 

 

7,182

 

Loss on disposal of equipment

 

 

7

 

 

 

6

 

Deferred income taxes

 

 

5,511

 

 

 

1,782

 

Unrealized foreign currency (gain) loss

 

 

(1,130

)

 

 

381

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(12,217

)

 

 

(7,478

)

Other assets

 

 

(4,889

)

 

 

(3,021

)

Accounts payable, accrued and other liabilities

 

 

(14,794

)

 

 

(809

)

Income taxes

 

 

(5,385

)

 

 

1,831

 

Deferred revenue

 

 

12,045

 

 

 

12,427

 

Net cash provided by operating activities

 

 

11,588

 

 

 

35,187

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,245

)

 

 

(616

)

Net maturities of investments

 

 

-

 

 

 

1,439

 

Net cash (used in) provided by investing activities

 

 

(1,245

)

 

 

823

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(43,032

)

 

 

(30,160

)

Net cash used in financing activities

 

 

(43,032

)

 

 

(30,160

)

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(2,710

)

 

 

(97

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(35,399

)

 

 

5,753

 

Cash and cash equivalents at beginning of period

 

 

110,678

 

 

 

99,126

 

Cash and cash equivalents at end of period

 

$

75,279

 

 

$

104,879

 

 


 

 


 

MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

1.

Corporate Response to COVID-19:

 

Our results for the first quarter were in line with our internal expectations due to continued demand for our cloud-based supply chain and omnichannel commerce solutions. However, the impacts of global macroeconomic disruption directly related to coronavirus disease (“COVID-19”) on our business are currently uncertain. Therefore, we are taking a conservative approach and proactive measures to position our company for uncertainty in the near-term while maintaining flexibility to extend our market-leading position when a normalization of business activity resumes. As previously announced, effective April 1, 2020, we reduced the salaries of the chief executive officer and the board of directors by 25%, the chief financial officer by 15%, and other named executive officers by 10%; and suspended our share repurchase program. We are also aggressively reducing operating expenses globally.

 

Importantly, we believe these expense reductions will not materially impact our ability to support our customers or make key investments in research and development to further extend our competitive positioning. We will continue to actively monitor the situation and may take further actions that modify our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, and partners.

 

2.

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

 

2019

 

 

2020

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

GAAP Diluted EPS

$

0.32

 

 

$

0.32

 

 

$

0.42

 

 

$

0.26

 

 

$

1.32

 

 

$

0.35

 

Adjustments to GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

0.08

 

 

 

0.10

 

 

 

0.09

 

 

 

0.14

 

 

 

0.42

 

 

 

0.10

 

Tax benefit of stock awards vested

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.06

)

Purchase amortization

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted Diluted EPS

$

0.41

 

 

$

0.42

 

 

$

0.51

 

 

$

0.40

 

 

$

1.74

 

 

$

0.40

 

Fully Diluted Shares

 

65,204

 

 

 

65,093

 

 

 

64,992

 

 

 

64,807

 

 

 

65,103

 

 

 

64,342

 

 

 


 

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

 

2019

 

 

2020

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

Revenue:

 

Americas

$

114,873

 

 

$

121,778

 

 

$

132,028

 

 

$

121,155

 

 

$

489,834

 

 

$

123,146

 

EMEA

 

26,288

 

 

 

25,043

 

 

 

22,978

 

 

 

23,964

 

 

 

98,273

 

 

 

24,313

 

APAC

 

7,243

 

 

 

7,520

 

 

 

7,269

 

 

 

7,810

 

 

 

29,842

 

 

 

6,444

 

 

$

148,404

 

 

$

154,341

 

 

$

162,275

 

 

$

152,929

 

 

$

617,949

 

 

$

153,903

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Income:

 

Americas

$

18,051

 

 

$

16,826

 

 

$

26,310

 

 

$

17,437

 

 

$

78,624

 

 

$

16,282

 

EMEA

 

7,734

 

 

 

8,057

 

 

 

6,371

 

 

 

4,772

 

 

 

26,934

 

 

 

6,313

 

APAC

 

2,491

 

 

 

2,699

 

 

 

2,316

 

 

 

2,860

 

 

 

10,366

 

 

 

1,601

 

 

$

28,276

 

 

$

27,582

 

 

$

34,997

 

 

$

25,069

 

 

$

115,924

 

 

$

24,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (pre-tax):

 

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based

   compensation

$

7,182

 

 

$

8,462

 

 

$

8,002

 

 

$

8,195

 

 

$

31,841

 

 

$

7,564

 

Purchase amortization

 

108

 

 

 

107

 

 

 

108

 

 

 

107

 

 

 

430

 

 

 

107

 

 

$

7,290

 

 

$

8,569

 

 

$

8,110

 

 

$

8,302

 

 

$

32,271

 

 

$

7,671

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-GAAP Operating Income:

 

Americas

$

25,341

 

 

$

25,395

 

 

$

34,420

 

 

$

25,739

 

 

$

110,895

 

 

$

23,953

 

EMEA

 

7,734

 

 

 

8,057