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 September 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 October 26, 2023, the latest practicable date, is as follows: 61,565,157 shares of common stock, $0.01 par value per share.

 

 

 


 

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended September 30, 2023

TABLE OF CONTENTS

PART I

 

 

Financial Information

 

 

 

 

Item 1.

Financial Statements.

 

 

 

 

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

3

 

 

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

4

 

 

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

5

 

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

6

 

 

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

 

 

September 30, 2023

 

 

December 31, 2022

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

182,312

 

 

$

225,463

 

Accounts receivable, net of allowance of $5,367 and $6,009, at September 30, 2023 and December 31, 2022, respectively

 

 

183,377

 

 

 

166,767

 

Prepaid expenses and other current assets

 

 

27,170

 

 

 

23,145

 

Total current assets

 

 

392,859

 

 

 

415,375

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

11,266

 

 

 

12,803

 

Operating lease right-of-use assets

 

 

19,976

 

 

 

17,794

 

Goodwill, net

 

 

62,228

 

 

 

62,230

 

Deferred income taxes

 

 

55,523

 

 

 

37,206

 

Other assets

 

 

31,143

 

 

 

24,770

 

Total assets

 

$

572,995

 

 

$

570,178

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

25,253

 

 

$

25,701

 

Accrued compensation and benefits

 

 

67,187

 

 

 

54,469

 

Accrued and other liabilities

 

 

26,429

 

 

 

24,569

 

Deferred revenue

 

 

213,440

 

 

 

208,807

 

Income taxes payable

 

 

517

 

 

 

2,049

 

Total current liabilities

 

 

332,826

 

 

 

315,595

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

16,237

 

 

 

14,065

 

Other non-current liabilities

 

 

13,827

 

 

 

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; 61,562,480 and 62,191,570 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

 

616

 

 

 

621

 

Retained earnings

 

 

238,315

 

 

 

253,711

 

Accumulated other comprehensive loss

 

 

(28,826

)

 

 

(27,532

)

Total shareholders' equity

 

 

210,105

 

 

 

226,800

 

Total liabilities and shareholders' equity

 

$

572,995

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

 

$

65,033

 

 

$

45,267

 

 

$

183,196

 

 

$

124,767

 

Software license

 

 

3,870

 

 

 

6,386

 

 

 

12,967

 

 

 

19,869

 

Maintenance

 

 

35,296

 

 

 

35,820

 

 

 

106,772

 

 

 

107,115

 

Services

 

 

127,965

 

 

 

103,425

 

 

 

368,744

 

 

 

294,284

 

Hardware

 

 

6,277

 

 

 

7,203

 

 

 

18,791

 

 

 

22,946

 

Total revenue

 

 

238,441

 

 

 

198,101

 

 

 

690,470

 

 

 

568,981

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of cloud subscriptions, maintenance and services

 

 

111,142

 

 

 

95,691

 

 

 

322,914

 

 

 

266,482

 

Cost of software license

 

 

297

 

 

 

467

 

 

 

967

 

 

 

1,749

 

Research and development

 

 

33,093

 

 

 

29,375

 

 

 

95,487

 

 

 

84,754

 

Sales and marketing

 

 

17,650

 

 

 

15,742

 

 

 

54,278

 

 

 

47,881

 

General and administrative

 

 

21,371

 

 

 

18,392

 

 

 

61,561

 

 

 

54,963

 

Depreciation and amortization

 

 

1,440

 

 

 

1,664

 

 

 

4,247

 

 

 

5,157

 

Total costs and expenses

 

 

184,993

 

 

 

161,331

 

 

 

539,454

 

 

 

460,986

 

Operating income

 

 

53,448

 

 

 

36,770

 

 

 

151,016

 

 

 

107,995

 

Other income, net

 

 

1,739

 

 

 

1,612

 

 

 

2,923

 

 

 

4,593

 

Income before income taxes

 

 

55,187

 

 

 

38,382

 

 

 

153,939

 

 

 

112,588

 

Income tax provision

 

 

5,766

 

 

 

8,708

 

 

 

26,107

 

 

 

21,497

 

Net income

 

$

49,421

 

 

$

29,674

 

 

$

127,832

 

 

$

91,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.80

 

 

$

0.47

 

 

$

2.07

 

 

$

1.45

 

Diluted earnings per share

 

$

0.79

 

 

$

0.47

 

 

$

2.05

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

61,639

 

 

 

62,592

 

 

 

61,902

 

 

 

62,917

 

Diluted

 

 

62,310

 

 

 

63,165

 

 

 

62,501

 

 

 

63,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

49,421

 

 

$

29,674

 

 

$

127,832

 

 

$

91,091

 

Foreign currency translation adjustment

 

 

(2,086

)

 

 

(3,566

)

 

 

(1,294

)

 

 

(8,781

)

Comprehensive income

 

$

47,335

 

 

$

26,108

 

 

$

126,538

 

 

$

82,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

Net income

 

$

127,832

 

 

$

91,091

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

4,247

 

 

 

5,157

 

Equity-based compensation

 

 

53,598

 

 

 

44,209

 

Loss (gain) on disposal of equipment

 

 

42

 

 

 

(20

)

Deferred income taxes

 

 

(18,359

)

 

 

(20,736

)

Unrealized foreign currency loss (gain)

 

 

922

 

 

 

(2,933

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(17,168

)

 

 

(23,384

)

Other assets

 

 

(7,747

)

 

 

(9,190

)

Accounts payable, accrued and other liabilities

 

 

13,477

 

 

 

20,743

 

Income taxes

 

 

(4,347

)

 

 

(730

)

Deferred revenue

 

 

5,362

 

 

 

20,195

 

Net cash provided by operating activities

 

 

157,859

 

 

 

124,402

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,761

)

 

 

(4,152

)

Net cash used in investing activities

 

 

(2,761

)

 

 

(4,152

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Repurchase of common stock

 

 

(195,716

)

 

 

(179,029

)

Net cash used in financing activities

 

 

(195,716

)

 

 

(179,029

)

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(2,533

)

 

 

(7,872

)

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(43,151

)

 

 

(66,651

)

Cash and cash equivalents at beginning of period

 

 

225,463

 

 

 

263,706

 

Cash and cash equivalents at end of period

 

$

182,312

 

 

$

197,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2023 (unaudited)

 

 

61,668,512

 

 

$

617

 

 

$

-

 

 

$

196,673

 

 

$

(26,740

)

 

$

170,550

 

Repurchase of common stock

 

 

(136,165

)

 

 

(1

)

 

 

(18,821

)

 

 

(7,779

)

 

 

-

 

 

 

(26,601

)

Restricted stock units issuance

 

 

30,133

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax on net stock repurchases

 

 

-

 

 

 

-

 

 

 

(209

)

 

 

-

 

 

 

-

 

 

 

(209

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

19,030

 

 

 

-

 

 

 

-

 

 

 

19,030

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,086

)

 

 

(2,086

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

49,421

 

 

 

-

 

 

 

49,421

 

Balance, September 30, 2023 (unaudited)

 

 

61,562,480

 

 

$

616

 

 

$

-

 

 

$

238,315

 

 

$

(28,826

)

 

$

210,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022 (audited)

 

 

62,191,570

 

 

$

621

 

 

$

-

 

 

$

253,711

 

 

$

(27,532

)

 

$

226,800

 

Repurchase of common stock

 

 

(1,244,580

)

 

 

(11

)

 

 

(52,477

)

 

 

(143,228

)

 

 

-

 

 

 

(195,716

)

Restricted stock units issuance

 

 

615,490

 

 

 

6

 

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

Excise tax accrued

 

 

 

 

 

 

 

 

(1,115

)

 

 

 

 

 

 

 

 

(1,115

)

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

53,598

 

 

 

-

 

 

 

-

 

 

 

53,598

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,294

)

 

 

(1,294

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

127,832

 

 

 

-

 

 

 

127,832

 

Balance, September 30, 2023 (unaudited)

 

 

61,562,480

 

 

$

616

 

 

$

-

 

 

$

238,315

 

 

$

(28,826

)

 

$

210,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2022 (unaudited)

 

 

62,718,513

 

 

$

627

 

 

$

-

 

 

$

233,151

 

 

$

(25,043

)

 

$

208,735

 

Repurchase of common stock

 

 

(354,711

)

 

 

(3

)

 

 

(14,533

)

 

 

(36,706

)

 

 

-

 

 

 

(51,242

)

Restricted stock units issuance

 

 

30,658

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Equity-based compensation

 

 

-

 

 

 

-

 

 

 

14,533

 

 

 

-

 

 

 

-

 

 

 

14,533

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,566

)

 

 

(3,566

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

29,674

 

 

                                 -

 

 

 

29,674

 

Balance, September 30, 2022 (unaudited)

 

 

62,394,460

 

 

$

624

 

 

$

-

 

 

$

226,119

 

 

$

(28,609

)

 

$

198,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021 (audited)

 

 

63,154,494

 

 

$

631

 

 

$

-

 

 

$

269,841

 

 

$

(19,828

)

 

$

250,644

 

Repurchase of common stock

 

 

(1,361,605

)

 

 

(13

)

 

 

(44,203

)

 

 

(134,813

)

 

 

-

 

 

 

(179,029

)

Restricted stock units issuance

 

 

601,571