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):  January 31, 2017
 
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))

 

 
Item 2.02  Results of Operations and Financial Condition.
 
On January 31, 2017, Manhattan Associates, Inc. (the “Company”) issued a press release providing its financial results for the three and twelve months ended December 31, 2016. 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, adjusted net income and adjusted diluted earnings per share, which exclude the impact of equity-based compensation and acquisition-related costs, and the related income tax effects of both. 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 and the related income tax effects when assessing our operating performance, and believe our peers also typically present non-GAAP results that exclude equity-based compensation expense.	
 
 	•	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 the reporting of adjusted operating income, adjusted net income and adjusted earnings per share 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 operating income, adjusted net income and adjusted earnings per share 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 operating income, adjusted net income and adjusted earnings per share in making 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 operating income, adjusted net income and adjusted earnings
1

 
per share facilitate management’s internal comparisons to our historical operating results and comparisons to competitors’ operating results.
Further, we rely on adjusted operating income, adjusted net income and adjusted net income per share information as primary measures to review and assess the operating performance of our Company and our management team in connection with our executive compensation and bonus plans. Since most of our employees are not directly involved with decisions surrounding acquisitions and other items that are not central to our core operations, we do not believe it is appropriate or fair to have their incentive compensation affected by these items.

Item 9.01  Financial Statements and Exhibits.
(d)Exhibits.
 	 	
Exhibit	 	
Number	Description	
99.1	Press Release, dated January 31, 2017	

2

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company 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:  January 31, 2017
 
3

 
EXHIBIT INDEX
 	 	
Exhibit	 	
Number	Description	
99.1	Press Release, dated January 31, 2017	

 

Exhibit 99.1

Contact:	 	Dennis Story	 	Beverly McDonald	
 	 	Chief Financial Officer	 	Senior Director, Corporate Marketing	
 	 	Manhattan Associates, Inc.	 	Manhattan Associates, Inc.	
 	 	770-955-7070	 	678-597-6528	
 	 	dstory@manh.com	 	bmcdonald@manh.com	

Manhattan Associates Reports Record Fourth Quarter and Full Year 2016 Performance
 
ATLANTA – January 31, 2017 – Leading Supply Chain Commerce Solutions provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported record Q4 GAAP diluted earnings per share for the fourth quarter ended December 31, 2016 of $0.42 compared to $0.36 in Q4 2015, on record Q4 license revenue of $22.1 million and record Q4 total revenue of $147.6 million. Non-GAAP adjusted diluted earnings per share for Q4 2016 was a Q4 record of $0.46 compared to $0.39 in Q4 2015.
“We posted solid fourth quarter and full year financial results marking our 5th consecutive year of record revenue and earnings per share performance. As important, we are very pleased with our strong Q4 and 2nd half license momentum exiting 2016. Demand for our omni-channel, store and distribution management solutions continues to be solid and our associates continue to execute very well serving our customers,” said Eddie Capel, Manhattan Associates President and CEO. “Despite persistent global macro sluggishness and near-term services revenue headwinds, we significantly strengthened our company in 2016 and improved our market leadership position. We are bullish on the market opportunity ahead of us and continue to place significant energy and investment into developing and advancing the world’s leading suite of Supply Chain Commerce solutions to extend our market leadership in 2017 and beyond.”

 

FOURTH QUARTER 2016 FINANCIAL SUMMARY:
 	•	GAAP diluted earnings per share was $0.42 in Q4 2016, compared to $0.36 in Q4 2015.	 	

 	•	Adjusted diluted earnings per share, a non-GAAP measure, was $0.46 in Q4 2016, compared to $0.39 in Q4 2015.	 	

 	•	Consolidated total revenue was $147.6 million in Q4 2016, compared to $141.4 million in Q4 2015. License revenue was $22.1 million in Q4 2016, compared to $20.4 million in Q4 2015.	 	

 	•	GAAP operating income was $45.4 million in Q4 2016, compared to $39.5 million in Q4 2015.	 	

 	•	Adjusted operating income, a non-GAAP measure, was $49.7 million in Q4 2016, compared to $43.1 million in Q4 2015.	 	

 	•	Cash flow from operations was $37.8 million in Q4 2016, compared to $36.1 million in Q4 2015. Days Sales Outstanding was 63 days at December 31, 2016, compared to 60 days at September 30, 2016.	 	

 	•	Cash and investments totaled $95.6 million at December 31, 2016, compared to $110.8 million at September 30, 2016.	 	

 	•	During the three months ended December 31, 2016, the Company repurchased 957,470 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $49.9 million. In January 2017, the Board of Directors authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock.	 	
FULL YEAR 2016 FINANCIAL SUMMARY:
 	•	GAAP diluted earnings per share for the twelve months ended December 31, 2016 was a record $1.72, compared to $1.40 for the twelve months ended December 31, 2015.  	 	

 

 	•	Adjusted diluted earnings per share, a non-GAAP measure, was a record $1.87 for the twelve months ended December 31, 2016, compared to $1.52 for the twelve months ended December 31, 2015.	 	

 	•	Consolidated revenue for the twelve months ended December 31, 2016, was a record $604.6 million, compared to $556.4 million for the twelve months ended December 31, 2015. License revenue was a record $85.0 million for the twelve months ended December 31, 2016, compared to $78.6 million for the twelve months ended December 31, 2015.  	 	

 	•	GAAP operating income was a record $194.3 million for the twelve months ended December 31, 2016, compared to $161.4 million for the twelve months ended December 31, 2015.	 	

 	•	Adjusted operating income, a non-GAAP measure, was a record $210.7 million for the twelve months ended December 31, 2016, compared to $176.4 million for the twelve months ended December 31, 2015. 	 	

 	•	Cash flow from operations was a record $139.3 million in the twelve months ended December 31, 2016, compared to $120.2 million in the twelve months ended December 31, 2015.	 	

 	•	During the twelve months ended December 31, 2016, the Company repurchased 2,821,488 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $158.4 million.	 	
SALES ACHIEVEMENTS:
 	•	Recognized license revenue of $1.0 million or more on seven new contracts during Q4 2016.	 	

 	•	Completed software license wins with new customers such as: Autozone, Blokker, China Logistics, Guzman Gastronomia, Kurt Geiger, Milan Supply Chain Solutions, Sonae and The Warehouse Limited.	 	

 	•	Expanded relationships with existing customers such as: Alidi, Alloga, Aramark Uniform, Avery Dennison, Buffalo Hospital Supply, Cdiscount, Coach, Costa del Mar, Cotton On,	 	

 

 	 	Custom Goods, DICK’S Sporting Goods, Eram, Evine, Federal-Mogul, Fedway, Genco, Gold City Footwear, Goodman, Groupe Dynamite, Harng Central Department Stores, Hastings Deering, Hibbett Sports, Hot Topic, ID Logistics, Leroy Merlin, Northern Safety, Oatey, Olympus, Papa John’s, Redmart, Republic National Distributing Company, Ryder Integrated Logistics, Shaw Industries, Southern Glazer’s Wine & Spirits, STD Petrovich, The Honest Company, Tommy Bahama, Uniform Advantage, United Natural Foods, UPS Supply Chain, US Foods and Vitamin Shoppe.	 	
2017 GUIDANCE
Manhattan Associates provides the following revenue and diluted earnings per share guidance for the full year 2017:
 	 	 	
 	 	Guidance Range - 2017 Full Year	 	
 	($'s in millions, except EPS)	$ Range	 	% Growth Range	 	
 	 	 	 	 	 	 	 	 	 	
 	Total revenue	$622	 	$632	 	3%	 	5%	 	
 	 	 	 	 	 	 	 	 	 	
 	Diluted earnings per share (EPS):	 	 	 	 	 	 	 	 	
 	GAAP EPS	$1.74	 	$1.78	 	1%	 	3%	 	
 	Adjusted EPS(1)	$1.89	 	$1.93	 	1%	 	3%	 	
 	 	 	 	 	 	 	 	 	 	
 	(1) Adjusted EPS is a Non-GAAP measure which excludes the impact of equity-based compensation	 	
 	    and acquisition-related costs, and the related income tax effects of both.	 	

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, are forward looking. Actual results may differ materially. Those statements, including the guidance provided above, 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 its earnings release and published expectations available on its website (www.manh.com). Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance above,

 

should be considered historical only, and Manhattan Associates disclaims any obligation to update them.
CONFERENCE CALL
The Company’s conference call regarding its fourth quarter and twelve months ended December 31, 2016 financial results will be held today, January 31, 2017, at 4:30 p.m. Eastern Standard Time. Investors are invited to listen to a live webcast of the conference call through the investor relations section of Manhattan Associates' website at  www.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.
For those who cannot listen to the live broadcast, a replay can be accessed shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 43521083 or via the web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ first quarter 2017 earnings release.
GAAP VERSUS NON-GAAP PRESENTATION
The Company provides adjusted operating income, 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 non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share measures used by other companies. The Company believes that 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 that are 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 quarter and twelve months ended December 31, 2016.  

 

Non-GAAP adjusted operating income, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation and acquisition-related costs and the amortization thereof – all net of income tax effects. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments are included in the supplemental information attached to this release.
ABOUT MANHATTAN ASSOCIATES
Manhattan Associates is a technology leader in supply chain and omni-channel 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 and on-premise solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omni-channel 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 the information set forth under “2017 Guidance.” Prospective investors are cautioned that any such 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 such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: uncertainty about the global economy, delays in product development, competitive pressures, software errors, information security breaches and the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and Form 10-Q for the quarter ended June 30, 2016. 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.
###

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)

 
 	 	Three Months Ended December 31,	 	 	Year Ended December 31,	 	
 	 	2016	 	 	2015	 	 	2016	 	 	2015	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Software license	 	$	22,125	 	 	$	20,413	 	 	$	84,996	 	 	$	78,615	 	
Services	 	 	111,923	 	 	 	106,982	 	 	 	467,286	 	 	 	428,078	 	
Hardware and other	 	 	13,544	 	 	 	14,040	 	 	 	52,275	 	 	 	49,678	 	
Total revenue	 	 	147,592	 	 	 	141,435	 	 	 	604,557	 	 	 	556,371	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of license	 	 	2,419	 	 	 	2,590	 	 	 	10,820	 	 	 	9,938	 	
Cost of services	 	 	47,742	 	 	 	46,419	 	 	 	197,475	 	 	 	184,349	 	
Cost of hardware and other	 	 	10,710	 	 	 	11,322	 	 	 	41,584	 	 	 	41,141	 	
Research and development	 	 	13,183	 	 	 	13,457	 	 	 	54,736	 	 	 	53,859	 	
Sales and marketing	 	 	13,617	 	 	 	13,975	 	 	 	48,223	 	 	 	48,615	 	
General and administrative	 	 	12,281	 	 	 	12,036	 	 	 	48,322	 	 	 	49,259	 	
Depreciation and amortization	 	 	2,284	 	 	 	2,108	 	 	 	9,090	 	 	 	7,764	 	
Total costs and expenses	 	 	102,236	 	 	 	101,907	 	 	 	410,250	 	 	 	394,925	 	
Operating income	 	 	45,356	 	 	 	39,528	 	 	 	194,307	 	 	 	161,446	 	
Other income, net	 	 	416	 	 	 	170	 	 	 	1,800	 	 	 	1,395	 	
Income before income taxes	 	 	45,772	 	 	 	39,698	 	 	 	196,107	 	 	 	162,841	 	
Income tax provision	 	 	15,855	 	 	 	13,328	 	 	 	71,873	 	 	 	59,366	 	
Net income	 	$	29,917	 	 	$	26,370	 	 	$	124,234	 	 	$	103,475	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per share	 	$	0.42	 	 	$	0.36	 	 	$	1.73	 	 	$	1.41	 	
Diluted earnings per share	 	$	0.42	 	 	$	0.36	 	 	$	1.72	 	 	$	1.40	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	70,742	 	 	 	72,929	 	 	 	71,674	 	 	 	73,443	 	
Diluted	 	 	71,148	 	 	 	73,555	 	 	 	72,060	 	 	 	74,038	 	

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP to Non-GAAP Measures
(in thousands, except per share amounts)

 
  	 	Three Months Ended December 31,	 	 	Year Ended December 31,	 	
 	 	2016	 	 	2015	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	$	45,356	 	 	$	39,528	 	 	$	194,307	 	 	$	161,446	 	
Equity-based compensation (a)	 	 	4,210	 	 	 	3,441	 	 	 	15,934	 	 	 	14,528	 	
Purchase amortization (b)	 	 	108	 	 	 	107	 	 	 	430	 	 	 	432	 	
Adjusted operating income (Non-GAAP)	 	$	49,674	 	 	$	43,076	 	 	$	210,671	 	 	$	176,406	 	

Income tax provision	 	$	15,855	 	 	$	13,328	 	 	$	71,873	 	 	$	59,366	 	
Equity-based compensation (a)	 	 	1,451	 	 	 	1,216	 	 	 	5,789	 	 	 	5,385	 	
Purchase amortization (b)	 	 	37	 	 	 	38	 	 	 	156	 	 	 	160	 	
Adjusted income tax provision (Non-GAAP)	 	$	17,343	 	 	$	14,582	 	 	$	77,818	 	 	$	64,911	 	

Net income	 	$	29,917	 	 	$	26,370	 	 	$	124,234	 	 	$	103,475	 	
Equity-based compensation (a)	 	 	2,759	 	 	 	2,225	 	 	 	10,145	 	 	 	9,143	 	
Purchase amortization (b)	 	 	71	 	 	 	69	 	 	 	274	 	 	 	272	 	
Adjusted net income (Non-GAAP)	 	$	32,747	 	 	$	28,664	 	 	$	134,653	 	 	$	112,890	 	

Diluted EPS	 	$	0.42	 	 	$	0.36	 	 	$	1.72	 	 	$	1.40	 	
Equity-based compensation (a)	 	 	0.04	 	 	 	0.03	 	 	 	0.14	 	 	 	0.12	 	
Purchase amortization (b)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Adjusted diluted EPS (Non-GAAP)	 	$	0.46	 	 	$	0.39	 	 	$	1.87	 	 	$	1.52	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fully diluted shares	 	 	71,148	 	 	 	73,555	 	 	 	72,060	 	 	 	74,038	 	

(a)	Adjusted results exclude all equity-based compensation, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof. Equity-based compensation is included in the following GAAP operating expense lines for the three and twelve months ended December 31, 2016 and 2015:	
 
  	 	Three Months Ended December 31,	 	 	Year Ended December 31,	 	
 	 	2016	 	 	2015	 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	$	819	 	 	$	524	 	 	$	3,794	 	 	$	2,548	 	
Research and development	 	 	567	 	 	 	625	 	 	 	2,489	 	 	 	2,128	 	
Sales and marketing	 	 	593	 	 	 	850	 	 	 	2,431	 	 	 	2,577	 	
General and administrative	 	 	2,231	 	 	 	1,442	 	 	 	7,220	 	 	 	7,275	 	
Total equity-based compensation	 	$	4,210	 	 	$	3,441	 	 	$	15,934	 	 	$	14,528	 	
 
(b)	Adjustments represent purchased intangibles amortization from prior acquisition. Such amortization is excluded from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof.	

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)

 	 	December 31, 2016	 	 	December 31, 2015	 	
 	 	 	 	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	95,615	 	 	$	118,416	 	
Short-term investments	 	 	-	 	 	 	10,344	 	
Accounts receivable, net of allowance of $3,595 and $7,031 in 2016 and 2015, respectively	 	 	100,285	 	 	 	97,379	 	
Prepaid expenses and other current assets	 	 	11,118	 	 	 	10,772	 	
Total current assets	 	 	207,018	 	 	 	236,911	 	
 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	19,019	 	 	 	21,176	 	
Goodwill, net	 	 	62,228	 	 	 	62,233	 	
Deferred income taxes	 	 	2,867	 	 	 	4,648	 	
Other assets	 	 	6,008	 	 	 	7,275	 	
Total assets	 	$	297,140	 	 	$	332,243	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	12,052	 	 	$	11,219	 	
Accrued compensation and benefits	 	 	20,700	 	 	 	29,284	 	
Accrued and other liabilities	 	 	12,510	 	 	 	13,853	 	
Deferred revenue	 	 	63,457	 	 	 	68,757	 	
Income taxes payable	 	 	8,924	 	 	 	4,072	 	
Total current liabilities	 	 	117,643	 	 	 	127,185	 	
 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	10,131	 	 	 	9,566	 	
 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or
   outstanding in 2016 and 2015	 	 	-	 	 	 	-	 	
Common stock, $.01 par value; 200,000,000 shares authorized; 70,233,955 and
   72,766,383 shares issued and outstanding at December 31, 2016 and
   December 31, 2015, respectively	 	 	702	 	 	 	728	 	
Retained earnings	 	 	184,558	 	 	 	207,070	 	
Accumulated other comprehensive loss	 	 	(15,894	)	 	 	(12,306	)	
Total shareholders' equity	 	 	169,366	 	 	 	195,492	 	
Total liabilities and shareholders' equity	 	$	297,140	 	 	$	332,243	 	

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
 
 	 	Year Ended December 31,	
 	 	2016	 	 	2015	 	 	
 	 	 	 	 	 	 	 	 	 	
Operating activities:	 	 	 	 	 	 	 	 	 	
Net income	 	$	124,234	 	 	$	103,475	 	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	9,090	 	 	 	7,764	 	 	
Equity-based compensation	 	 	15,934	 	 	 	14,528	 	 	
Loss (Gain) on disposal of equipment	 	 	30	 	 	 	(30	)	 	
Tax benefit of stock awards exercised/vested	 	 	5,209	 	 	 	9,170	 	 	
Excess tax benefits from equity-based compensation	 	 	(5,214	)	 	 	(9,147	)	 	
Deferred income taxes	 	 	1,797	 	 	 	1,532	 	 	
Unrealized foreign currency (gain) loss	 	 	(393	)	 	 	49	 	 	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	(4,358	)	 	 	(12,223	)	 	
Other assets	 	 	299	 	 	 	(1,427	)	 	
Accounts payable, accrued and other liabilities	 	 	(9,261	)	 	 	(1,592	)	 	
Income taxes	 	 	6,129	 	 	 	(2,271	)	 	
Deferred revenue	 	 	(4,150	)	 	 	10,325	 	 	
Net cash provided by operating activities	 	 	139,346	 	 	 	120,153	 	 	
 	 	 	 	 	 	 	 	 	 	
Investing activities:	 	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(6,843	)	 	 	(11,492	)	 	
Net maturities (purchases) of short-term investments	 	 	10,201	 	 	 	(2,051	)	 	
Net cash provided by (used in ) investing activities	 	 	3,358	 	 	 	(13,543	)	 	
 	 	 	 	 	 	 	 	 	 	
Financing activities:	 	 	 	 	 	 	 	 	 	
Purchase of common stock	 	 	(167,933	)	 	 	(112,138	)	 	
Proceeds from issuance of common stock from options exercised	 	 	18	 	 	 	717	 	 	
Excess tax benefits from equity-based compensation	 	 	5,214	 	 	 	9,147	 	 	
Net cash used in financing activities	 	 	(162,701	)	 	 	(102,274	)	 	
 	 	 	 	 	 	 	 	 	 	
Foreign currency impact on cash	 	 	(2,804	)	 	 	(1,628	)	 	
 	 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	 	 	(22,801	)	 	 	2,708	 	 	
Cash and cash equivalents at beginning of period	 	 	118,416	 	 	 	115,708	 	 	
Cash and cash equivalents at end of period	 	$	95,615	 	 	$	118,416	 	 	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1.	GAAP and Adjusted earnings per share by quarter are as follows:	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
GAAP Diluted EPS	 	$	0.31	 	 	$	0.35	 	 	$	0.38	 	 	$	0.36	 	 	$	1.40	 	 	$	0.38	 	 	$	0.46	 	 	$	0.47	 	 	$	0.42	 	 	$	1.72	 	
Adjustments to GAAP:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
  compensation	 	 	0.03	 	 	 	0.02	 	 	 	0.05	 	 	 	0.03	 	 	 	0.12	 	 	 	0.04	 	 	 	0.03	 	 	 	0.03	 	 	 	0.04	 	 	 	0.14	 	
Purchase amortization	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Adjusted Diluted EPS	 	$	0.34	 	 	$	0.37	 	 	$	0.42	 	 	$	0.39	 	 	$	1.52	 	 	$	0.42	 	 	$	0.49	 	 	$	0.50	 	 	$	0.46	 	 	$	1.87	 	
Fully Diluted Shares	 	 	74,607	 	 	 	74,126	 	 	 	73,761	 	 	 	73,555	 	 	 	74,038	 	 	 	73,020	 	 	 	72,228	 	 	 	71,743	 	 	 	71,148	 	 	 	72,060	 	

2.	Revenues and operating income by reportable segment are as follows (in thousands):	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	109,959	 	 	$	117,154	 	 	$	120,118	 	 	$	117,245	 	 	$	464,476	 	 	$	128,807	 	 	$	131,018	 	 	$	130,099	 	 	$	123,660	 	 	$	513,584	 	
EMEA	 	 	18,305	 	 	 	17,175	 	 	 	16,829	 	 	 	17,767	 	 	 	70,076	 	 	 	15,686	 	 	 	18,185	 	 	 	15,078	 	 	 	17,333	 	 	 	66,282	 	
APAC	 	 	5,259	 	 	 	4,780	 	 	 	5,357	 	 	 	6,423	 	 	 	21,819	 	 	 	5,367	 	 	 	5,689	 	 	 	7,036	 	 	 	6,599	 	 	 	24,691	 	
 	 	$	133,523	 	 	$	139,109	 	 	$	142,304	 	 	$	141,435	 	 	$	556,371	 	 	$	149,860	 	 	$	154,892	 	 	$	152,213	 	 	$	147,592	 	 	$	604,557	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	30,182	 	 	$	36,214	 	 	$	36,407	 	 	$	31,020	 	 	$	133,823	 	 	$	37,454	 	 	$	44,126	 	 	$	46,213	 	 	$	37,154	 	 	$	164,947	 	
EMEA	 	 	5,522	 	 	 	4,516	 	 	 	5,909	 	 	 	6,363	 	 	 	22,310	 	 	 	4,439	 	 	 	6,854	 	 	 	4,822	 	 	 	5,945	 	 	 	22,060	 	
APAC	 	 	1,160	 	 	 	644	 	 	 	1,364	 	 	 	2,145	 	 	 	5,313	 	 	 	1,206	 	 	 	1,288	 	 	 	2,549	 	 	 	2,257	 	 	 	7,300	 	
 	 	$	36,864	 	 	$	41,374	 	 	$	43,680	 	 	$	39,528	 	 	$	161,446	 	 	$	43,099	 	 	$	52,268	 	 	$	53,584	 	 	$	45,356	 	 	$	194,307	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments (pre-tax):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
   compensation	 	$	3,078	 	 	$	2,661	 	 	$	5,348	 	 	$	3,441	 	 	$	14,528	 	 	$	4,688	 	 	$	3,495	 	 	$	3,541	 	 	$	4,210	 	 	$	15,934	 	
Purchase
   amortization	 	 	106	 	 	 	106	 	 	 	113	 	 	 	107	 	 	 	432	 	 	 	107	 	 	 	108	 	 	 	107	 	 	 	108	 	 	 	430	 	
 	 	$	3,184	 	 	$	2,767	 	 	$	5,461	 	 	$	3,548	 	 	$	14,960	 	 	$	4,795	 	 	$	3,603	 	 	$	3,648	 	 	$	4,318	 	 	$	16,364	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted non-GAAP
   Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	33,366	 	 	$	38,981	 	 	$	41,868	 	 	$	34,568	 	 	$	148,783	 	 	$	42,249	 	 	$	47,729	 	 	$	49,861	 	 	$	41,472	 	 	$	181,311	 	
EMEA	 	 	5,522	 	 	 	4,516	 	 	 	5,909	 	 	 	6,363	 	 	 	22,310	 	 	 	4,439	 	 	 	6,854	 	 	 	4,822	 	 	 	5,945	 	 	 	22,060	 	
APAC	 	 	1,160	 	 	 	644	 	 	 	1,364	 	 	 	2,145	 	 	 	5,313	 	 	 	1,206	 	 	 	1,288	 	 	 	2,549	 	 	 	2,257	 	 	 	7,300	 	
 	 	$	40,048	 	 	$	44,141	 	 	$	49,141	 	 	$	43,076	 	 	$	176,406	 	 	$	47,894	 	 	$	55,871	 	 	$	57,232	 	 	$	49,674	 	 	$	210,671	 	

 

 
3.	Our services revenue consists of fees generated from professional services and customer support and software enhancements related to our software products as follows (in thousands):	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Professional services	 	$	72,659	 	 	$	76,548	 	 	$	80,994	 	 	$	74,423	 	 	$	304,624	 	 	$	84,506	 	 	$	86,992	 	 	$	84,843	 	 	$	77,097	 	 	$	333,438	 	
Customer support and
   software
   enhancements	 	 	28,544	 	 	 	30,796	 	 	 	31,555	 	 	 	32,559	 	 	 	123,454	 	 	 	31,757	 	 	 	32,841	 	 	 	34,424	 	 	 	34,826	 	 	 	133,848	 	
Total services revenue	 	$	101,203	 	 	$	107,344	 	 	$	112,549	 	 	$	106,982	 	 	$	428,078	 	 	$	116,263	 	 	$	119,833	 	 	$	119,267	 	 	$	111,923	 	 	$	467,286	 	
 
4.	Hardware and other revenue includes the following items (in thousands):	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Hardware revenue	 	$	7,730	 	 	$	7,080	 	 	$	5,462	 	 	$	9,243	 	 	$	29,515	 	 	$	8,761	 	 	$	9,554	 	 	$	6,543	 	 	$	9,070	 	 	$	33,928	 	
Billed travel	 	 	5,276	 	 	 	4,927	 	 	 	5,163	 	 	 	4,797	 	 	 	20,163	 	 	 	4,229	 	 	 	4,874	 	 	 	4,770	 	 	 	4,474	 	 	 	18,347	 	
Total hardware and
   other revenue	 	$	13,006	 	 	$	12,007	 	 	$	10,625	 	 	$	14,040	 	 	$	49,678	 	 	$	12,990	 	 	$	14,428	 	 	$	11,313	 	 	$	13,544	 	 	$	52,275	 	

5.	Impact of Currency Fluctuation	
The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Revenue	 	$	(3,426	)	 	$	(3,599	)	 	$	(3,421	)	 	$	(2,263	)	 	$	(12,709	)	 	$	(810	)	 	$	(474	)	 	$	(784	)	 	$	(1,425	)	 	$	(3,493	)	
Costs and expenses	 	 	(2,546	)	 	 	(3,201	)	 	 	(2,820	)	 	 	(2,058	)	 	 	(10,625	)	 	 	(1,292	)	 	 	(702	)	 	 	(782	)	 	 	(1,028	)	 	 	(3,804	)	
Operating income	 	 	(880	)	 	 	(398	)	 	 	(601	)	 	 	(205	)	 	 	(2,084	)	 	 	482	 	 	 	228	 	 	 	(2	)	 	 	(397	)	 	 	311	 	
Foreign currency
   (losses) gains in
   other income	 	 	(86	)	 	 	(4	)	 	 	213	 	 	 	(199	)	 	 	(76	)	 	 	165	 	 	 	331	 	 	 	(72	)	 	 	211	 	 	 	635	 	
 	 	$	(966	)	 	$	(402	)	 	$	(388	)	 	$	(404	)	 	$	(2,160	)	 	$	647	 	 	$	559	 	 	$	(74	)	 	$	(186	)	 	$	946	 	
 
Manhattan Associates has a large research and development center in Bangalore, India.  The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Operating income	 	$	72	 	 	$	468	 	 	$	571	 	 	$	492	 	 	$	1,603	 	 	$	682	 	 	$	459	 	 	$	259	 	 	$	159	 	 	$	1,559	 	
Foreign currency
   gains (losses) in
   other income	 	 	45	 	 	 	182	 	 	 	423	 	 	 	2	 	 	 	652	 	 	 	(109	)	 	 	212	 	 	 	(44	)	 	 	159	 	 	 	218	 	
Total impact of
   changes in the
   Indian Rupee	 	$	117	 	 	$	650	 	 	$	994	 	 	$	494	 	 	$	2,255	 	 	$	573	 	 	$	671	 	 	$	215	 	 	$	318	 	 	$	1,777	 	

 

 
6.	Other income includes the following components (in thousands):	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Interest income	 	$	324	 	 	$	335	 	 	$	336	 	 	$	336	 	 	$	1,331	 	 	$	335	 	 	$	329	 	 	$	281	 	 	$	216	 	 	$	1,161	 	
Foreign currency
   (losses) gains	 	 	(86	)	 	 	(4	)	 	 	213	 	 	 	(199	)	 	 	(76	)	 	 	165	 	 	 	331	 	 	 	(72	)	 	 	211	 	 	 	635	 	
Other non-operating
   income (expense)	 	 	24	 	 	 	28	 	 	 	55	 	 	 	33	 	 	 	140	 	 	 	20	 	 	 	(6	)	 	 	1	 	 	 	(11	)	 	 	4	 	
Total other income	 	$	262	 	 	$	359	 	 	$	604	 	 	$	170	 	 	$	1,395	 	 	$	520	 	 	$	654	 	 	$	210	 	 	$	416	 	 	$	1,800	 	
 
7.Capital expenditures are as follows (in thousands):
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Capital expenditures	 	$	3,098	 	 	$	2,671	 	 	$	3,850	 	 	$	1,873	 	 	$	11,492	 	 	$	1,906	 	 	$	2,201	 	 	$	1,358	 	 	$	1,378	 	 	$	6,843	 	

8.	Stock Repurchase Activity (in thousands):	
 
 	 	2015	 	 	2016	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Shares purchased under
   publicly-announced
   buy-back program	 	 	524	 	 	 	458	 	 	 	399	 	 	 	340	 	 	 	1,721	 	 	 	892	 	 	 	552	 	 	 	420	 	 	 	957	 	 	 	2,821	 	
Shares withheld for
   taxes due upon
   vesting of restricted
   stock	 	 	212	 	 	 	2	 	 	 	9	 	 	 	3	 	 	 	226	 	 	 	163	 	 	 	-	 	 	 	3	 	 	 	1	 	 	 	167	 	
Total shares purchased	 	 	736	 	 	 	460	 	 	 	408	 	 	 	343	 	 	 	1,947	 	 	 	1,055	 	 	 	552	 	 	 	423	 	 	 	958	 	 	 	2,988	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total cash paid for
   shares purchased
   under publicly-
   announced
   buy-back program	 	$	26,306	 	 	$	25,214	 	 	$	25,001	 	 	$	25,078	 	 	$	101,599	 	 	$	48,499	 	 	$	34,995	 	 	$	24,998	 	 	$	49,901	 	 	$	158,393	 	
Total cash paid for
   shares withheld for
   taxes due upon
   vesting of
   restricted stock	 	 	9,727	 	 	 	83	 	 	 	508	 	 	 	221	 	 	 	10,539	 	 	 	9,292	 	 	 	26	 	 	 	158	 	 	 	64	 	 	 	9,540	 	
Total cash paid for
   shares repurchased	 	$	36,033	 	 	$	25,297	 	 	$	25,509	 	 	$	25,299	 	 	$	112,138	 	 	$	57,791	 	 	$	35,021	 	 	$	25,156	 	 	$	49,965	 	 	$	167,933