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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 September 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 October 20, 2021, the latest practicable date, is as follows: 63,281,836 shares of common stock, $0.01 par value per share.

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended September 30, 2021

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

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

3

 

 

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

4

 

 

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

5

 

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

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months and nine months ended September 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.

28

 

 

 

 

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)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

246,445

 

 

$

204,705

 

Accounts receivable, net of allowance of $3,930 and $3,497, at September 30, 2021 and December 31, 2020, respectively

 

 

115,344

 

 

 

109,202

 

Prepaid expenses and other current assets

 

 

23,878

 

 

 

20,134

 

Total current assets

 

 

385,667

 

 

 

334,041

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

14,272

 

 

 

17,903

 

Operating lease right-of-use assets

 

 

27,602

 

 

 

31,470

 

Goodwill, net

 

 

62,242

 

 

 

62,252

 

Deferred income taxes

 

 

5,939

 

 

 

5,760

 

Other assets

 

 

18,561

 

 

 

13,986

 

Total assets

 

$

514,283

 

 

$

465,412

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

21,647

 

 

$

17,805

 

Accrued compensation and benefits

 

 

51,626

 

 

 

41,962

 

Accrued and other liabilities

 

 

20,589

 

 

 

21,181

 

Deferred revenue

 

 

136,452

 

 

 

114,164

 

Income taxes payable

 

 

2,548

 

 

 

1,874

 

Total current liabilities

 

 

232,862

 

 

 

196,986

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

23,881

 

 

 

27,843

 

Other non-current liabilities

 

 

18,913

 

 

 

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; 63,281,757 and 63,527,186 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

633

 

 

 

635

 

Retained earnings

 

 

257,507

 

 

 

236,524

 

Accumulated other comprehensive loss

 

 

(19,513

)

 

 

(18,262

)

Total shareholders' equity

 

 

238,627

 

 

 

218,897

 

Total liabilities and shareholders' equity

 

$

514,283

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

32,196

 

 

$

21,064

 

 

$

87,434

 

 

$

56,827

 

Software license

 

 

8,461

 

 

 

13,233

 

 

 

25,122

 

 

 

28,649

 

Maintenance

 

 

34,479

 

 

 

37,305

 

 

 

108,370

 

 

 

108,947

 

Services

 

 

88,172

 

 

 

73,470

 

 

 

253,234

 

 

 

232,654

 

Hardware

 

 

5,877

 

 

 

4,685

 

 

 

17,989

 

 

 

12,213

 

Total revenue

 

 

169,185

 

 

 

149,757

 

 

 

492,149

 

 

 

439,290

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software license

 

 

690

 

 

 

527

 

 

 

1,802

 

 

 

1,673

 

Cost of cloud subscriptions, maintenance and services

 

 

70,813

 

 

 

64,672

 

 

 

214,394

 

 

 

201,382

 

Research and development

 

 

23,372

 

 

 

20,454

 

 

 

70,845

 

 

 

63,713

 

Sales and marketing

 

 

14,057

 

 

 

11,399

 

 

 

41,203

 

 

 

34,196

 

General and administrative

 

 

15,928

 

 

 

15,536

 

 

 

50,579

 

 

 

45,666

 

Depreciation and amortization

 

 

1,917

 

 

 

2,193

 

 

 

6,136

 

 

 

6,796

 

Total costs and expenses

 

 

126,777

 

 

 

114,781

 

 

 

384,959

 

 

 

353,426

 

Operating income

 

 

42,408

 

 

 

34,976

 

 

 

107,190

 

 

 

85,864

 

Other (loss) income, net

 

 

(42

)

 

 

(891

)

 

 

(29

)

 

 

371

 

Income before income taxes

 

 

42,366

 

 

 

34,085

 

 

 

107,161

 

 

 

86,235

 

Income tax provision

 

 

5,712

 

 

 

9,119

 

 

 

17,271

 

 

 

19,535

 

Net income

 

$

36,654

 

 

$

24,966

 

 

$

89,890

 

 

$

66,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.58

 

 

$

0.39

 

 

$

1.42

 

 

$

1.05

 

Diluted earnings per share

 

$

0.57

 

 

$

0.39

 

 

$

1.40

 

 

$

1.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

63,363

 

 

 

63,524

 

 

 

63,514

 

 

 

63,541

 

Diluted

 

 

64,238

 

 

 

64,427

 

 

 

64,339

 

 

 

64,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

36,654

 

 

$

24,966

 

 

$

89,890

 

 

$

66,700

 

Foreign currency translation adjustment

 

 

(294

)

 

 

1,589

 

 

 

(1,251

)

 

 

(1,546

)

Comprehensive income

 

$

36,360

 

 

$

26,555

 

 

$

88,639

 

 

$

65,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

89,890

 

 

$

66,700

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,136

 

 

 

6,796

 

Equity-based compensation

 

 

31,333

 

 

 

24,068

 

Loss on disposal of equipment

 

 

14

 

 

 

15

 

Deferred income taxes

 

 

(213

)

 

 

2,409

 

Unrealized foreign currency (gain) loss

 

 

(949

)

 

 

415

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(7,296

)

 

 

(3,799

)

Other assets

 

 

(8,328

)

 

 

2,331

 

Accounts payable, accrued and other liabilities

 

 

13,429

 

 

 

(15,446

)

Income taxes

 

 

(2,965

)

 

 

547

 

Deferred revenue

 

 

24,029

 

 

 

18,832

 

Net cash provided by operating activities

 

 

145,080

 

 

 

102,868

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,158

)

 

 

(1,928

)

Net cash used in investing activities

 

 

(2,158

)

 

 

(1,928

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(100,242

)

 

 

(43,523

)

Net cash used in financing activities

 

 

(100,242

)

 

 

(43,523

)

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(940

)

 

 

(1,841

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

41,740

 

 

 

55,576

 

Cash and cash equivalents at beginning of period

 

 

204,705

 

 

 

110,678

 

Cash and cash equivalents at end of period

 

$

246,445

 

 

$

166,254

 

 

 

 

 

 

 

 

 

 

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 September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2021 (unaudited)

 

 

63,397,603

 

 

$

634

 

 

$

-

 

 

$

231,035

 

 

$

(19,219

)

 

$

212,450

 

Repurchase of common stock

 

 

(128,043

)

 

 

(1

)

 

 

(10,573

)

 

 

(10,182

)

 

 

-

 

 

 

(20,756

)

Restricted stock units issuance

 

 

12,197

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

10,573

 

 

 

-

 

 

 

-

 

 

 

10,573

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(294

)

 

 

(294

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

36,654

 

 

 

-

 

 

 

36,654

 

Balance, September 30, 2021 (unaudited)

 

 

63,281,757

 

 

$

633

 

 

$

-

 

 

$

257,507

 

 

$

(19,513

)

 

$

238,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020 (audited)

 

 

63,527,186

 

 

$

635

 

 

  $                         -

 

 

$

236,524

 

 

$

(18,262

)

 

$

218,897

 

Repurchase of common stock

 

 

(759,057

)

 

 

(7

)

 

 

(31,328

)

 

 

(68,907

)

 

 

-

 

 

 

(100,242

)

Restricted stock units issuance

 

 

513,628

 

 

 

5

 

 

 

(5

)

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

31,333

 

 

 

-

 

 

 

-

 

 

 

31,333

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,251

)

 

 

(1,251

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

89,890

 

 

 

-

 

 

 

89,890

 

Balance, September 30, 2021 (unaudited)

 

 

63,281,757

 

 

$

633

 

 

$

-

 

 

$

257,507

 

 

$

(19,513

)

 

$

238,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2020 (unaudited)

 

 

63,518,968

 

 

$

635

 

 

$

-

 

 

$

173,125

 

 

$

(20,982

)

 

$

152,778

 

Repurchase of common stock

 

 

(3,963

)

 

 

-

 

 

 

(9,012

)

 

 

8,644

 

 

 

-

 

 

 

(368

)

Restricted stock units issuance

 

 

11,101

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

9,012

 

 

 

-

 

 

 

-

 

 

 

9,012

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,589

 

 

 

1,589

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,966

 

 

 

-

 

 

 

24,966

 

Balance, September 30, 2020 (unaudited)

 

 

63,526,106

 

 

$

635

 

 

$

-

 

 

$

206,735

 

 

$

(19,393

)

 

$

187,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019 (audited)

 

 

63,456,986

 

 

$

635

 

 

$

-

 

 

$

159,490

 

 

$

(17,847

)

 

$

142,278

 

Repurchase of common stock

 

 

(561,901

)