0001056696false00010566962022-10-252022-10-25

 

 

 

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 25, 2022

 

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. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

 

On October 25, 2022, Manhattan Associates, Inc. (“we”, “our”, or the “Company”) issued a press release providing its financial results for the three and nine months ended September 30, 2022. 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 and adjusted diluted earnings per share (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

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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 incentive plans.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number	Description
99.1	Press Release, dated October 25, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant 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 25, 2022

 

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Exhibit 99.1

 

 

Contact:		Michael Bauer		Rick Fernandez
		Senior Director, Investor Relations		Director, Corporate Communications
		Manhattan Associates, Inc.		Manhattan Associates, Inc.
		678-597-7538		678-597-6988
		mbauer@manh.com		rfernandez@manh.com

 

Manhattan Associates Reports Record Third Quarter Results

RPO Bookings Increase 69% over Prior Year on Strong Demand

Company Raises 2022 Full-Year Revenue and EPS Guidance

 

ATLANTA – October 25, 2022 – Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $198.1 million for the third quarter ended September 30, 2022. GAAP diluted earnings per share was $0.47 for Q3 2022 compared to $0.57 for Q3 2021. Non-GAAP adjusted diluted earnings per share for Q3 2022 was $0.66 compared to $0.71 in Q3 2021.

“We are very pleased with our quarterly results, delivering record Q3 revenue and better than expected earnings per share. Demand is strong and resilient across our differentiated cloud product portfolio,” said Manhattan Associates president and CEO Eddie Capel.

“We are committed to our customers’ success and continue to invest in industry leading innovation to help digitally transform their businesses. While the global macro environment remains turbulent, our business fundamentals are strong and our increased 2022 guidance appropriately accounts for continued volatility,” Mr. Capel concluded.

THIRD QUARTER 2022 FINANCIAL SUMMARY:

 

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NINE MONTH 2022 FINANCIAL SUMMARY:

 

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2022 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2022:

		Guidance Range - 2022 Full Year
	($'s in millions, except operating margin and EPS)	$ Range				% Growth Range
	Total revenue - current guidance	$750		$753		13%		13%
	Operating margin:
	GAAP operating margin - current guidance	17.5%		17.7%
	Equity-based compensation	8.0%		7.9%
	Adjusted operating margin(1) - current guidance	25.5%		25.6%
	Diluted earnings per share (EPS):
	GAAP EPS - current guidance	$1.71		$1.73		-1%		1%
	Equity-based compensation, net of tax	0.79		0.79
	Excess tax benefit on stock vesting	(0.07)		(0.07)
	Adjusted EPS(1) - current guidance	$2.43		$2.45		9%		10%
	(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 those 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 and guideposts in the supplemental information below, are forward looking. Actual results may differ materially. See our cautionary note regarding “forward-looking statements” below. 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 this earnings release and published expectations available on the investor relations section of the Manhattan Associates website at ir.manh.com. Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance and guideposts, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

 

 

 

 

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CONFERENCE CALL

Manhattan Associates’ conference call regarding its third quarter 2022 financial results will be held today, October 25, 2022, 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 the Manhattan Associates website at ir.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. The internet broadcast replay will be available until Manhattan Associates’ fourth quarter 2022 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

Manhattan Associates 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, 2022.

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. We include reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.

 

 

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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 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 “2022 Guidance” and “Guideposts,” 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: economic conditions, including inflation; disruption in the retail sector; delays in product development; competitive and pricing pressures; software errors and information technology failures, system disruption and security breaches; disruption in the retail sector; risks related to our products’ technology and customer implementations; global instability, including the war in Ukraine; 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, 2021, 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.

 

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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,
		2022				2021				2022				2021
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenue:
Cloud subscriptions		$	45,267			$	32,196			$	124,767			$	87,434
Software license			6,386				8,461				19,869				25,122
Maintenance			35,820				34,479				107,115				108,370
Services			103,425				88,172				294,284				253,234
Hardware			7,203				5,877				22,946				17,989
Total revenue			198,101				169,185				568,981				492,149
Costs and expenses:
Cost of software license			467				690				1,749				1,802
Cost of cloud subscriptions, maintenance and services			95,691				70,813				266,482				214,394
Research and development			29,375				23,372				84,754				70,845
Sales and marketing			15,742				14,057				47,881				41,203
General and administrative			18,392				15,928				54,963				50,579
Depreciation and amortization			1,664				1,917				5,157				6,136
Total costs and expenses			161,331				126,777				460,986				384,959
Operating income			36,770				42,408				107,995				107,190
Other income (loss), net			1,612				(42	)			4,593				(29	)
Income before income taxes			38,382				42,366				112,588				107,161
Income tax provision			8,708				5,712				21,497				17,271
Net income		$	29,674			$	36,654			$	91,091			$	89,890
Basic earnings per share		$	0.47			$	0.58			$	1.45			$	1.42
Diluted earnings per share		$	0.47			$	0.57			$	1.43			$	1.40
Weighted average number of shares:
Basic			62,592				63,363				62,917				63,514
Diluted			63,165				64,238				63,483				64,339

 

 

 

 

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MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Operating income		$	36,770			$	42,408			$	107,995			$	107,190
Equity-based compensation (a)			14,533				10,573				44,209				31,333
Purchase amortization (c)			-				50				-				264
Restructuring charge (d)			-				-				-				-
Adjusted operating income (Non-GAAP)		$	51,303			$	53,031			$	152,204			$	138,787
Income tax provision		$	8,708			$	5,712			$	21,497			$	17,271
Equity-based compensation (a)			2,265				1,503				7,013				4,399
Tax benefit of stock awards vested (b)			3				312				4,386				4,369
Purchase amortization (c)			-				12								65
Adjusted income tax provision (Non-GAAP)		$	10,976			$	7,539			$	32,896			$	26,104
Net income		$	29,674			$	36,654			$	91,091			$	89,890
Equity-based compensation (a)			12,268				9,070				37,196				26,934
Tax benefit of stock awards vested (b)			(3	)			(312	)			(4,386	)			(4,369	)
Purchase amortization (c)			-				38				-				199
Adjusted net income (Non-GAAP)		$	41,939			$	45,450			$	123,901			$	112,654
Diluted EPS		$	0.47			$	0.57			$	1.43			$	1.40
Equity-based compensation (a)			0.19				0.14				0.59				0.42
Tax benefit of stock awards vested (b)			-				-				(0.07	)			(0.07	)
Purchase amortization (c)			-				-				-				-
Adjusted diluted EPS (Non-GAAP)		$	0.66			$	0.71			$	1.95			$	1.75
Fully diluted shares			63,165				64,238				63,483				64,339

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Cost of services		$	5,308			$	3,977			$	16,267			$	10,769
Research and development			3,126				2,139				9,740				6,247
Sales and marketing			1,508				1,073				4,460				3,198
General and administrative			4,591				3,384				13,742				11,119
Total equity-based compensation		$	14,533			$	10,573			$	44,209			$	31,333

 

 

 

 

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MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

		September 30, 2022				December 31, 2021
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	197,055			$	263,706
Accounts receivable, net of allowance of $3,296 and $2,419, at September 30, 2022 and December 31, 2021, respectively			143,504				124,420
Prepaid expenses and other current assets			26,136				20,293
Total current assets			366,695				408,419
Property and equipment, net			12,265				13,889
Operating lease right-of-use assets			21,169				27,272
Goodwill, net			62,218				62,239
Deferred income taxes			28,231				7,650
Other assets			24,141				20,239
Total assets		$	514,719			$	539,708
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	27,360			$	19,625
Accrued compensation and benefits			62,560				53,104
Accrued and other liabilities			22,507				22,741
Deferred revenue			169,390				153,196
Income taxes payable			2,153				376
Total current liabilities			283,970				249,042
Operating lease liabilities, long-term			17,186				23,157
Other non-current liabilities			15,429				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; 62,394,460 and 63,154,494 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively			624				631
Retained earnings			226,119				269,841
Accumulated other comprehensive loss			(28,609	)			(19,828	)
Total shareholders' equity			198,134				250,644
Total liabilities and shareholders' equity		$	514,719			$	539,708

 

 

 

 

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MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

		Nine Months Ended September 30,
		2022				2021
		(unaudited)				(unaudited)
Operating activities:
Net income		$	91,091			$	89,890
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			5,157				6,136
Equity-based compensation			44,209				31,333
(Gain) loss on disposal of equipment			(20	)			14
Deferred income taxes			(20,736	)			(213	)
Unrealized foreign currency gain			(2,933	)			(949	)
Changes in operating assets and liabilities:
Accounts receivable, net			(23,384	)			(7,296	)
Other assets			(9,190	)			(8,328	)
Accounts payable, accrued and other liabilities			20,743				13,429
Income taxes			(730	)			(2,965	)
Deferred revenue			20,195				24,029
Net cash provided by operating activities			124,402				145,080
Investing activities:
Purchase of property and equipment			(4,152	)			(2,158	)
Net cash used in investing activities			(4,152	)			(2,158	)
Financing activities:
Purchase of common stock			(179,029	)			(100,242	)
Net cash used in financing activities			(179,029	)			(100,242	)
Foreign currency impact on cash			(7,872	)			(940	)
Net change in cash and cash equivalents			(66,651	)			41,740
Cash and cash equivalents at beginning of period			263,706				204,705
Cash and cash equivalents at end of period		$	197,055			$	246,445

 

 

 

 

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MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

1. GAAP and adjusted earnings per share by quarter are as follows:

 

	2021										2022
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year		1st Qtr		2nd Qtr		3rd Qtr		YTD
GAAP Diluted EPS	$0.35		$0.48		$0.57		$0.32		$1.72		$0.48		$0.49		$0.47		$1.43
Adjustments to GAAP:
Equity-based compensation	0.13		0.14		0.14		0.16		0.58		0.19		0.20		0.19		0.59
Tax benefit of stock awards vested	(0.06)		(0.01)		-		-		(0.07)		(0.07)		-		-		(0.07)
Purchase amortization	-		-		-		-		-		-		-		-		-
Adjusted Diluted EPS	$0.43		$0.61		$0.71		$0.48		$2.23		$0.60		$0.69