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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

[Mark One]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number:  0-23999

MANHATTAN ASSOCIATES, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Georgia

 

 

58-2373424

(State or Other Jurisdiction of

Incorporation or Organization)

 

 

(I.R.S. Employer

Identification No.)

 

2300 Windy Ridge Parkway, Tenth Floor

 

 

 

Atlanta, Georgia

 

 

30339

(Address of Principal Executive Offices)

 

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (770) 955-7070

 

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:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes     No  

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes      No  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

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.    

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes     No  

The number of shares of the Registrant’s class of capital stock outstanding as of July 26, 2021, the latest practicable date, is as follows: 63,399,891 shares of common stock, $0.01 par value per share.

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended June 30, 2021

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020

3

 

 

Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2021 and 2020 (unaudited)

4

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2021 and 2020 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended June 30, 2021 and 2020 (unaudited)

7

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

8

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

15

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

27

 

 

 

Item 4.

Controls and Procedures.

27

 

 

 

 

PART II

 

 

 

 

 

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings.

29

 

 

 

Item 1A.

Risk Factors.

29

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

29

 

 

 

Item 3.

Defaults Upon Senior Securities.

29

 

 

 

Item 4.

Mine Safety Disclosures.

29

 

 

 

Item 5.

Other Information.

29

 

 

 

Item 6.

Exhibits.

30

 

 

 

Signatures.

31

 

 

 

 

2


 

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

209,343

 

 

$

204,705

 

Accounts receivable, net of allowance of $4,178 and $3,497, at June 30, 2021 and December 31, 2020, respectively

 

 

113,955

 

 

 

109,202

 

Prepaid expenses and other current assets

 

 

23,934

 

 

 

20,134

 

Total current assets

 

 

347,232

 

 

 

334,041

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

15,115

 

 

 

17,903

 

Operating lease right-of-use assets

 

 

28,744

 

 

 

31,470

 

Goodwill, net

 

 

62,246

 

 

 

62,252

 

Deferred income taxes

 

 

3,975

 

 

 

5,760

 

Other assets

 

 

17,685

 

 

 

13,986

 

Total assets

 

$

474,997

 

 

$

465,412

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

22,031

 

 

$

17,805

 

Accrued compensation and benefits

 

 

49,728

 

 

 

41,962

 

Accrued and other liabilities

 

 

18,915

 

 

 

21,181

 

Deferred revenue

 

 

125,993

 

 

 

114,164

 

Income taxes payable

 

 

194

 

 

 

1,874

 

Total current liabilities

 

 

216,861

 

 

 

196,986

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

24,959

 

 

 

27,843

 

Other non-current liabilities

 

 

20,727

 

 

 

21,686

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2021 and 2020

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 63,397,603 and 63,527,186 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

634

 

 

 

635

 

Retained earnings

 

 

231,035

 

 

 

236,524

 

Accumulated other comprehensive loss

 

 

(19,219

)

 

 

(18,262

)

Total shareholders' equity

 

 

212,450

 

 

 

218,897

 

Total liabilities and shareholders' equity

 

$

474,997

 

 

$

465,412

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

 

 

3


 

Item 1.

Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

28,595

 

 

$

18,503

 

 

$

55,238

 

 

$

35,763

 

Software license

 

 

8,823

 

 

 

5,681

 

 

 

16,661

 

 

 

15,416

 

Maintenance

 

 

37,732

 

 

 

35,898

 

 

 

73,891

 

 

 

71,642

 

Services

 

 

84,703

 

 

 

71,778

 

 

 

165,062

 

 

 

159,184

 

Hardware

 

 

6,261

 

 

 

3,770

 

 

 

12,112

 

 

 

7,528

 

Total revenue

 

 

166,114

 

 

 

135,630

 

 

 

322,964

 

 

 

289,533

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software license

 

 

556

 

 

 

591

 

 

 

1,112

 

 

 

1,146

 

Cost of cloud subscriptions, maintenance and services

 

 

70,072

 

 

 

62,434

 

 

 

143,581

 

 

 

136,710

 

Research and development

 

 

23,213

 

 

 

19,931

 

 

 

47,473

 

 

 

43,259

 

Sales and marketing

 

 

13,750

 

 

 

9,709

 

 

 

27,146

 

 

 

22,797

 

General and administrative

 

 

17,082

 

 

 

14,016

 

 

 

34,651

 

 

 

30,130

 

Depreciation and amortization

 

 

2,084

 

 

 

2,257

 

 

 

4,219

 

 

 

4,603

 

Total costs and expenses

 

 

126,757

 

 

 

108,938

 

 

 

258,182

 

 

 

238,645

 

Operating income

 

 

39,357

 

 

 

26,692

 

 

 

64,782

 

 

 

50,888

 

Other income (loss), net

 

 

306

 

 

 

(158

)

 

 

13

 

 

 

1,262

 

Income before income taxes

 

 

39,663

 

 

 

26,534

 

 

 

64,795

 

 

 

52,150

 

Income tax provision

 

 

9,070

 

 

 

7,330

 

 

 

11,559

 

 

 

10,416

 

Net income

 

$

30,593

 

 

$

19,204

 

 

$

53,236

 

 

$

41,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.48

 

 

$

0.30

 

 

$

0.84

 

 

$

0.66

 

Diluted earnings per share

 

$

0.48

 

 

$

0.30

 

 

$

0.83

 

 

$

0.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

63,537

 

 

 

63,509

 

 

 

63,591

 

 

 

63,550

 

Diluted

 

 

64,276

 

 

 

64,126

 

 

 

64,371

 

 

 

64,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

 

 

4


 

Item 1.

Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

30,593

 

 

$

19,204

 

 

$

53,236

 

 

$

41,734

 

Foreign currency translation adjustment

 

 

(428

)

 

 

336

 

 

 

(957

)

 

 

(3,135

)

Comprehensive income

 

$

30,165

 

 

$

19,540

 

 

$

52,279

 

 

$

38,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

 

 

5


 

 

Item 1.

Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

53,236

 

 

$

41,734

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,219

 

 

 

4,603

 

Equity-based compensation

 

 

20,760

 

 

 

15,056

 

Loss on disposal of equipment

 

 

-

 

 

 

10

 

Deferred income taxes

 

 

1,768

 

 

 

4,234

 

Unrealized foreign currency gain

 

 

(1,029

)

 

 

(741

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(5,289

)

 

 

(7,469

)

Other assets

 

 

(7,912

)

 

 

(619

)

Accounts payable, accrued and other liabilities

 

 

9,592

 

 

 

(21,787

)

Income taxes

 

 

(1,952

)

 

 

568

 

Deferred revenue

 

 

12,002

 

 

 

24,799

 

Net cash provided by operating activities

 

 

85,395

 

 

 

60,388

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,171

)

 

 

(1,752

)

Net cash used in investing activities

 

 

(1,171

)

 

 

(1,752

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(79,486

)

 

 

(43,155

)

Net cash used in financing activities

 

 

(79,486

)

 

 

(43,155

)

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(100

)

 

 

(2,521

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

4,638

 

 

 

12,960

 

Cash and cash equivalents at beginning of period

 

 

204,705

 

 

 

110,678

 

Cash and cash equivalents at end of period

 

$

209,343

 

 

$

123,638

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

 

6


 

Item 1.

Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

For the Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2021 (unaudited)

 

 

63,616,713

 

 

$

636

 

 

$

-

 

 

$

222,815

 

 

$

(18,791

)

 

$

204,660

 

Repurchase of common stock

 

 

(244,700

)

 

 

(2

)

 

 

(10,709

)

 

 

(22,373

)

 

 

-

 

 

 

(33,084

)

Restricted stock units issuance

 

 

25,590

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

10,709

 

 

 

-

 

 

 

-

 

 

 

10,709

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(428

)

 

 

(428

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

30,593

 

 

 

-

 

 

 

30,593

 

Balance, June 30, 2021 (unaudited)

 

 

63,397,603

 

 

$

634

 

 

$

-

 

 

$

231,035

 

 

$

(19,219

)

 

$

212,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020 (audited)

 

 

63,527,186

 

 

$

635

 

 

$

-

 

 

$

236,524

 

 

$

(18,262

)

 

$

218,897

 

Repurchase of common stock

 

 

(631,014

)

 

 

(6

)

 

 

(20,755

)

 

 

(58,725

)

 

 

-

 

 

 

(79,486

)

Restricted stock units issuance

 

 

501,431

 

 

 

5

 

 

 

(5

)

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

20,760

 

 

 

-

 

 

 

-

 

 

 

20,760

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(957

)

 

 

(957

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

53,236

 

 

 

-

 

 

 

53,236

 

Balance, June 30, 2021 (unaudited)

 

 

63,397,603

 

 

$

634

 

 

$

-

 

 

$

231,035

 

 

$

(19,219

)

 

$

212,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2020 (unaudited)

 

 

63,495,687

 

 

$

635

 

 

$

-

 

 

$

146,552

 

 

$

(21,318

)

 

$

125,869

 

Repurchase of common stock

 

 

(1,829

)

 

 

-

 

 

 

(7,492

)

 

 

7,369

 

 

 

-

 

 

 

(123

)

Restricted stock units issuance

 

 

25,110

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

7,492

 

 

 

-

 

 

 

-

 

 

 

7,492

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

336

 

 

 

336

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,204

 

 

 

-

 

 

 

19,204

 

Balance, June 30, 2020 (unaudited)

 

 

63,518,968

 

 

$

635

 

 

$

-

 

 

$

173,125

 

 

$

(20,982

)

 

$

152,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019 (audited)

 

 

63,456,986

 

 

$

635

 

 

$

-

 

 

$

159,490

 

 

$

(17,847

)

 

$

142,278

 

Repurchase of common stock

 

 

(557,938

)

 

 

(6

)