10-Q
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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, 2023

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 21, 2023, the latest practicable date, is as follows: 61,668,802 shares of common stock, $0.01 par value per share.

 

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended June 30, 2023

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022

3

 

 

Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2023 and 2022 (unaudited)

4

 

 

Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended June 30, 2023 and 2022 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended June 30, 2023 and 2022 (unaudited)

7

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

8

 

 

Item 2.

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

14

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

25

 

 

 

Item 4.

Controls and Procedures.

25

 

 

 

 

PART II

 

 

 

 

 

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings.

27

 

 

 

Item 1A.

Risk Factors.

27

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

27

 

 

 

Item 3.

Defaults Upon Senior Securities.

27

 

 

 

Item 4.

Mine Safety Disclosures.

27

 

 

 

Item 5.

Other Information.

27

 

 

 

Item 6.

Exhibits.

28

 

 

 

Signatures.

29

 

 

 

 

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, 2023

 

 

December 31, 2022

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

153,294

 

 

$

225,463

 

Accounts receivable, net of allowance of $5,903 and $6,009, at June 30, 2023 and December 31, 2022, respectively

 

 

178,453

 

 

 

166,767

 

Prepaid expenses and other current assets

 

 

28,272

 

 

 

23,145

 

Total current assets

 

 

360,019

 

 

 

415,375

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

11,754

 

 

 

12,803

 

Operating lease right-of-use assets

 

 

16,052

 

 

 

17,794

 

Goodwill, net

 

 

62,233

 

 

 

62,230

 

Deferred income taxes

 

 

48,259

 

 

 

37,206

 

Other assets

 

 

28,677

 

 

 

24,770

 

Total assets

 

$

526,994

 

 

$

570,178

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

26,124

 

 

$

25,701

 

Accrued compensation and benefits

 

 

51,937

 

 

 

54,469

 

Accrued and other liabilities

 

 

25,339

 

 

 

24,569

 

Deferred revenue

 

 

227,100

 

 

 

208,807

 

Income taxes payable

 

 

109

 

 

 

2,049

 

Total current liabilities

 

 

330,609

 

 

 

315,595

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

12,459

 

 

 

14,065

 

Other non-current liabilities

 

 

13,376

 

 

 

13,718

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2023 and 2022

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 200,000,000 shares authorized; 61,668,512 and 62,191,570 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

 

617

 

 

 

621

 

Retained earnings

 

 

196,673

 

 

 

253,711

 

Accumulated other comprehensive loss

 

 

(26,740

)

 

 

(27,532

)

Total shareholders' equity

 

 

170,550

 

 

 

226,800

 

Total liabilities and shareholders' equity

 

$

526,994

 

 

$

570,178

 

 

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

60,943

 

 

$

42,203

 

 

$

118,163

 

 

$

79,500

 

Software license

 

 

3,745

 

 

 

5,125

 

 

 

9,097

 

 

 

13,483

 

Maintenance

 

 

35,826

 

 

 

35,993

 

 

 

71,476

 

 

 

71,295

 

Services

 

 

124,609

 

 

 

100,941

 

 

 

240,779

 

 

 

190,859

 

Hardware

 

 

5,893

 

 

 

7,662

 

 

 

12,514

 

 

 

15,743

 

Total revenue

 

 

231,016

 

 

 

191,924

 

 

 

452,029

 

 

 

370,880

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of cloud subscriptions, maintenance and services

 

 

108,445

 

 

 

87,766

 

 

 

211,772

 

 

 

170,791

 

Cost of software license

 

 

368

 

 

 

880

 

 

 

670

 

 

 

1,282

 

Research and development

 

 

31,600

 

 

 

27,924

 

 

 

62,394

 

 

 

55,379

 

Sales and marketing

 

 

18,563

 

 

 

17,749

 

 

 

36,628

 

 

 

32,139

 

General and administrative

 

 

20,237

 

 

 

18,606

 

 

 

40,190

 

 

 

36,571

 

Depreciation and amortization

 

 

1,320

 

 

 

1,746

 

 

 

2,807

 

 

 

3,493

 

Total costs and expenses

 

 

180,533

 

 

 

154,671

 

 

 

354,461

 

 

 

299,655

 

Operating income

 

 

50,483

 

 

 

37,253

 

 

 

97,568

 

 

 

71,225

 

Other income, net

 

 

1,041

 

 

 

2,243

 

 

 

1,184

 

 

 

2,981

 

Income before income taxes

 

 

51,524

 

 

 

39,496

 

 

 

98,752

 

 

 

74,206

 

Income tax provision

 

 

11,904

 

 

 

8,671

 

 

 

20,341

 

 

 

12,789

 

Net income

 

$

39,620

 

 

$

30,825

 

 

$

78,411

 

 

$

61,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.64

 

 

$

0.49

 

 

$

1.26

 

 

$

0.97

 

Diluted earnings per share

 

$

0.63

 

 

$

0.49

 

 

$

1.25

 

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

61,862

 

 

 

62,954

 

 

 

62,036

 

 

 

63,083

 

Diluted

 

 

62,432

 

 

 

63,419

 

 

 

62,599

 

 

 

63,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

39,620

 

 

$

30,825

 

 

$

78,411

 

 

$

61,417

 

Foreign currency translation adjustment

 

 

(16

)

 

 

(4,085

)

 

 

792

 

 

 

(5,215

)

Comprehensive income

 

$

39,604

 

 

$

26,740

 

 

$

79,203

 

 

$

56,202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

Net income

 

$

78,411

 

 

$

61,417

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

2,807

 

 

 

3,493

 

Equity-based compensation

 

 

34,568

 

 

 

29,676

 

Loss (gain) on disposal of equipment

 

 

22

 

 

 

(92

)

Deferred income taxes

 

 

(11,038

)

 

 

(12,535

)

Unrealized foreign currency loss (gain)

 

 

1,577

 

 

 

(2,087

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(11,024

)

 

 

(11,703

)

Other assets

 

 

(5,825

)

 

 

(6,697

)

Accounts payable, accrued and other liabilities

 

 

(2,593

)

 

 

(587

)

Income taxes

 

 

(5,359

)

 

 

(3,519

)

Deferred revenue

 

 

17,740

 

 

 

27,116

 

Net cash provided by operating activities

 

 

99,286

 

 

 

84,482

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,675

)

 

 

(2,243

)

Net cash used in investing activities

 

 

(1,675

)

 

 

(2,243

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Repurchase of common stock

 

 

(169,115

)

 

 

(127,787

)

Net cash used in financing activities

 

 

(169,115

)

 

 

(127,787

)

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(665

)

 

 

(4,387

)

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(72,169

)

 

 

(49,935

)

Cash and cash equivalents at beginning of period

 

 

225,463

 

 

 

263,706

 

Cash and cash equivalents at end of period

 

$

153,294

 

 

$

213,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2023 (unaudited)

 

 

62,026,840

 

 

$

620

 

 

$

-

 

 

$

207,176

 

 

$

(26,724

)

 

$

181,072

 

Repurchase of common stock

 

 

(385,047

)

 

 

(3

)

 

 

(17,301

)

 

 

(50,123

)

 

 

-

 

 

 

(67,427

)

Restricted stock units issuance

 

 

26,719

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax on net stock repurchases

 

 

-

 

 

 

-

 

 

 

(627

)

 

 

-

 

 

 

-

 

 

 

(627

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

17,928

 

 

 

-

 

 

 

-

 

 

 

17,928

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16

)

 

 

(16

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

39,620

 

 

 

-

 

 

 

39,620

 

Balance, June 30, 2023 (unaudited)

 

 

61,668,512

 

 

$

617

 

 

$

0

 

 

$

196,673

 

 

$

(26,740

)

 

$

170,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022 (audited)

 

 

62,191,570

 

 

$

621

 

 

$

-

 

 

$

253,711

 

 

$

(27,532

)

 

$

226,800

 

Repurchase of common stock

 

 

(1,108,415

)

 

 

(10

)

 

 

(33,656

)

 

 

(135,449

)

 

 

-

 

 

 

(169,115

)

Restricted stock units issuance

 

 

585,357

 

 

 

6

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax accrued

 

 

 

 

 

 

 

 

(906

)

 

 

 

 

 

 

 

 

(906

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

34,568

 

 

 

-

 

 

 

-

 

 

 

34,568

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

792

 

 

 

792

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

78,411

 

 

 

-

 

 

 

78,411

 

Balance, June 30, 2023 (unaudited)

 

 

61,668,512

 

 

$

617

 

 

$

0

 

 

$

196,673

 

 

$

(26,740

)

 

$

170,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2022 (unaudited)

 

 

63,113,221

 

 

$

631

 

 

$

-

 

 

$

237,463