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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, 2022

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 22, 2022, the latest practicable date, is as follows: 62,718,739 shares of common stock, $0.01 par value per share.

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended June 30, 2022

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021

3

 

 

Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2022 and 2021 (unaudited)

4

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2022 and 2021 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited)

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended June 30, 2022 and 2021 (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)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

213,771

 

 

$

263,706

 

Accounts receivable, net of allowance of $3,046 and $2,419, at June 30, 2022 and December 31, 2021, respectively

 

 

133,852

 

 

 

124,420

 

Prepaid expenses and other current assets

 

 

26,929

 

 

 

20,293

 

Total current assets

 

 

374,552

 

 

$

408,419

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

12,343

 

 

 

13,889

 

Operating lease right-of-use assets

 

 

23,198

 

 

 

27,272

 

Goodwill, net

 

 

62,227

 

 

 

62,239

 

Deferred income taxes

 

 

20,093

 

 

 

7,650

 

Other assets

 

 

21,876

 

 

 

20,239

 

Total assets

 

$

514,289

 

 

$

539,708

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

25,154

 

 

$

19,625

 

Accrued compensation and benefits

 

 

45,598

 

 

 

53,104

 

Accrued and other liabilities

 

 

22,385

 

 

 

22,741

 

Deferred revenue

 

 

178,019

 

 

 

153,196

 

Income taxes payable

 

 

70

 

 

 

376

 

Total current liabilities

 

 

271,226

 

 

 

249,042

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

18,934

 

 

 

23,157

 

Other non-current liabilities

 

 

15,394

 

 

 

16,865

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2022 and 2021

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 62,718,513 and 63,154,494 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

627

 

 

 

631

 

Retained earnings

 

 

233,151

 

 

 

269,841

 

Accumulated other comprehensive loss

 

 

(25,043

)

 

 

(19,828

)

Total shareholders' equity

 

 

208,735

 

 

 

250,644

 

Total liabilities and shareholders' equity

 

$

514,289

 

 

$

539,708

 

 

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

42,203

 

 

$

28,595

 

 

$

79,500

 

 

$

55,238

 

Software license

 

 

5,125

 

 

 

8,823

 

 

 

13,483

 

 

 

16,661

 

Maintenance

 

 

35,993

 

 

 

37,732

 

 

 

71,295

 

 

 

73,891

 

Services

 

 

100,941

 

 

 

84,703

 

 

 

190,859

 

 

 

165,062

 

Hardware

 

 

7,662

 

 

 

6,261

 

 

 

15,743

 

 

 

12,112

 

Total revenue

 

 

191,924

 

 

 

166,114

 

 

 

370,880

 

 

 

322,964

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software license

 

 

880

 

 

 

556

 

 

 

1,282

 

 

 

1,112

 

Cost of cloud subscriptions, maintenance, and services

 

 

87,766

 

 

 

70,072

 

 

 

170,791

 

 

 

143,581

 

Research and development

 

 

27,924

 

 

 

23,213

 

 

 

55,379

 

 

 

47,473

 

Sales and marketing

 

 

17,749

 

 

 

13,750

 

 

 

32,139

 

 

 

27,146

 

General and administrative

 

 

18,606

 

 

 

17,082

 

 

 

36,571

 

 

 

34,651

 

Depreciation and amortization

 

 

1,746

 

 

 

2,084

 

 

 

3,493

 

 

 

4,219

 

Total costs and expenses

 

 

154,671

 

 

 

126,757

 

 

 

299,655

 

 

 

258,182

 

Operating income

 

 

37,253

 

 

 

39,357

 

 

 

71,225

 

 

 

64,782

 

Other income, net

 

 

2,243

 

 

 

306

 

 

 

2,981

 

 

 

13

 

Income before income taxes

 

 

39,496

 

 

 

39,663

 

 

 

74,206

 

 

 

64,795

 

Income tax provision

 

 

8,671

 

 

 

9,070

 

 

 

12,789

 

 

 

11,559

 

Net income

 

$

30,825

 

 

$

30,593

 

 

$

61,417

 

 

$

53,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.49

 

 

$

0.48

 

 

$

0.97

 

 

$

0.84

 

Diluted earnings per share

 

$

0.49

 

 

$

0.48

 

 

$

0.97

 

 

$

0.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

62,954

 

 

 

63,537

 

 

 

63,083

 

 

 

63,591

 

Diluted

 

 

63,419

 

 

 

64,276

 

 

 

63,644

 

 

 

64,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

30,825

 

 

$

30,593

 

 

$

61,417

 

 

$

53,236

 

Foreign currency translation adjustment

 

 

(4,085

)

 

 

(428

)

 

 

(5,215

)

 

 

(957

)

Comprehensive income

 

$

26,740

 

 

$

30,165

 

 

$

56,202

 

 

$

52,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

61,417

 

 

$

53,236

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,493

 

 

 

4,219

 

Equity-based compensation

 

 

29,676

 

 

 

20,760

 

(Gain) loss on disposal of equipment

 

 

(92

)

 

-

 

Deferred income taxes

 

 

(12,535

)

 

 

1,768

 

Unrealized foreign currency gain

 

 

(2,087

)

 

 

(1,029

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(11,703

)

 

 

(5,289

)

Other assets

 

 

(6,697

)

 

 

(7,912

)

Accounts payable, accrued and other liabilities

 

 

(587

)

 

 

9,592

 

Income taxes

 

 

(3,519

)

 

 

(1,952

)

Deferred revenue

 

 

27,116

 

 

 

12,002

 

Net cash provided by operating activities

 

 

84,482

 

 

 

85,395

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,243

)

 

 

(1,171

)

Net cash used in investing activities

 

 

(2,243

)

 

 

(1,171

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(127,787

)

 

 

(79,486

)

Net cash used in financing activities

 

 

(127,787

)

 

 

(79,486

)

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(4,387

)

 

 

(100

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(49,935

)

 

 

4,638

 

Cash and cash equivalents at beginning of period

 

 

263,706

 

 

 

204,705

 

Cash and cash equivalents at end of period

 

$

213,771

 

 

$

209,343

 

 

 

 

 

 

 

 

 

 

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, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2022 (unaudited)

 

 

63,113,221

 

 

$

631

 

 

 

 

$                            -

 

 

 

 

$

237,463

 

 

 

 

$

(20,958

)

 

$

217,136

 

Repurchase of common stock

 

 

(420,785

)

 

 

(5

)

 

 

 

 

(15,537

)

 

 

 

 

(35,137

)

 

 

 

 

-

 

 

 

(50,679

)

Restricted stock units issuance

 

 

26,077

 

 

 

1

 

 

 

 

 

(1

)

 

 

 

 

-

 

 

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

15,538

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

15,538

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(4,085

)

 

 

(4,085

)

Net income

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

30,825

 

 

 

 

 

-

 

 

 

30,825

 

Balance, June 30, 2022 (unaudited)

 

 

62,718,513

 

 

$

627

 

 

 

 

$

-

 

 

 

 

$

233,151

 

 

 

 

$

(25,043

)

 

$

208,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021 (audited)

 

 

63,154,494

 

 

$

631

 

 

 

 

$

-

 

 

 

 

$

269,841

 

 

 

 

$

(19,828

)

 

$

250,644

 

Repurchase of common stock

 

 

(1,006,894

)

 

 

(10

)

 

 

 

 

(29,670

)

 

 

 

 

(98,107

)

 

 

 

 

-

 

 

 

(127,787

)

Restricted stock units issuance

 

 

570,913

 

 

 

6

 

 

 

 

 

(6

)

 

 

 

 

-

 

 

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

29,676

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

29,676

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(5,215

)

 

 

(5,215

)

Net income

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

61,417

 

 

 

 

 

-

 

 

 

61,417

 

Balance, June 30, 2022 (unaudited)

 

 

62,718,513

 

 

$

627

 

 

 

 

$

-

 

 

 

 

$

233,151

 

 

 

 

$

(25,043

)

 

$

208,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

                                 -

 

 

                                 -

 

 

 

 

                                 -