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 20, 2015
 
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 October 20, 2015, Manhattan Associates, Inc. (the “Company”) issued a press release providing the results for its financial performance for the three and nine months ended September 30, 2015. 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 excludes the impact of equity-based compensation and acquisition-related costs and the amortization thereof - all net of income tax effects. We have developed our internal reporting, compensation and planning systems using these measures.
These various measures are not in accordance with, or an alternative 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:
 
 	·	Because equity-based compensation expense is not an expense that typically requires or will require cash settlement by the Company, and because we believe our competitors and peers typically present non-GAAP results excluding all equity-based compensation expense, we have not included equity-based compensation expense and the related tax benefit generated upon the disposition of equity-based compensation in the assessment of our operating performance.	
 
 	·	Because we engage in acquisitions from time to time, we incur acquisition-related costs that consist primarily of accounting and legal expenses, whether or not we ultimately proceed with the transaction. Additionally, we might assume and incur certain unusual costs, such as employee retention benefits, that result from arrangements made prior to the acquisition. These acquisition costs are difficult to predict and do not correlate to the expenses of our core operations. We believe our competitors and peers typically present as a non-GAAP measure adjusted net income and adjusted earnings per share that exclude the amortization of acquisition-related intangible assets. Consequently, we exclude these amortization costs when calculating adjusted net income and adjusted earnings per share.	
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 important 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 more relevant 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
1

 
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 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 October 20, 2015	

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:  October 20, 2015
 
3

 
EXHIBIT INDEX
 	 	
Exhibit	 	
Number	Description	
99.1	Press Release, dated October 20, 2015	

 

Exhibit 99.1

Contact:	 	Dennis Story	 	Cameron Smith	
 	 	Chief Financial Officer	 	Director, Corporate Communications	
 	 	Manhattan Associates, Inc.	 	Manhattan Associates, Inc.	
 	 	770-955-7070	 	678-597-6841	
 	 	dstory@manh.com	 	camsmith@manh.com	
 
Manhattan Associates Reports Record Third Quarter 2015 Performance
Company raises full-year EPS guidance
 
ATLANTA – October 20, 2015 – Leading Supply Chain Commerce Solutions provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported record non-GAAP adjusted diluted earnings per share for the third quarter ended September 30, 2015 of $0.42 compared to $0.32 in Q3 2014, on license revenue of $19.1 million and record total revenue of $142.3 million. GAAP diluted earnings per share for Q3 2015 was a record $0.38 compared to $0.30 in Q3 2014.
“We’re very pleased with our third quarter performance and year-to-date 2015 results. Our associates continue to execute well serving our customers and delivering strong financial performance,” said Eddie Capel, Manhattan Associates president and CEO. “ Demand for our omni-channel, store and distribution management solutions continues to be strong and we continue to lead with product innovation to enhance our market leadership position. Our outlook for the balance of 2015 and the future is quite positive.”
 
THIRD QUARTER 2015 FINANCIAL SUMMARY:
 	·	Adjusted diluted earnings per share, a non-GAAP measure, was $0.42 in Q3 2015, compared to $0.32 in Q3 2014.	 	

 	·	GAAP diluted earnings per share was $0.38 in Q3 2015, compared to $0.30 in Q3 2014.	 	

 	·	Consolidated total revenue was $142.3 million in Q3 2015, compared to $125.6 million in Q3 2014. License revenue was $19.1 million in Q3 2015, compared to $16.9 million in Q3 2014.	 	

 

 	

 	·	Adjusted operating income, a non-GAAP measure, was $49.1 million in Q3 2015, compared to $37.9 million in Q3 2014.	 	

 	·	GAAP operating income was $43.7 million in Q3 2015, compared to $35.5 million in Q3 2014.	 	

 	·	Cash flow from operations was $41.3 million in Q3 2015, compared to $32.7 million in Q3 2014. Days Sales Outstanding was 60 days at September 30, 2015, compared to 54 days at June 30, 2015.	 	

 	·	Cash and investments was $119.1 million at September 30, 2015, compared to $108.4 million at June 30, 2015.	 	

 	·	During the three months ended September 30, 2015, the Company repurchased 399,315 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $25.0 million. In October 2015, the Board of Directors approved raising the Company's share repurchase authority to an aggregate of $50.0 million of the Company’s outstanding common stock.	 	
 
NINE MONTH 2015 FINANCIAL SUMMARY:
 	·	Adjusted diluted earnings per share, a non-GAAP measure, was $1.14 for the nine months ended September 30, 2015, compared to $0.87 for the nine months ended September 30, 2014.	 	

 	·	GAAP diluted earnings per share for the nine months ended September 30, 2015 was $1.04, compared to $0.81 for the nine months ended September 30, 2014.  	 	

 	·	Consolidated revenue for the nine months ended September 30, 2015 was $414.9 million, compared to $361.7 million for the nine months ended September 30, 2014. License revenue was $58.2 million for the nine months ended September 30, 2015, compared to $52.0 million for the nine months ended September 30, 2014.  	 	

 

 	
 
 	·	Adjusted operating income, a non-GAAP measure, was $133.3 million for the nine months ended September 30, 2015, compared to $105.1 million for the nine months ended September 30, 2014.   	 	

 	·	GAAP operating income was $121.9 million for the nine months ended September 30, 2015, compared to $98.1 million for the nine months ended September 30, 2014.	 	

 	·	Cash flow from operations was $84.0 million in the nine months ended September 30, 2015, compared to $53.7 million in the nine months ended September 30, 2014.	 	

 	·	During the nine months ended September 30, 2015, the Company repurchased 1,381,375 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $76.5 million.	 	
SALES ACHIEVEMENTS:
 	·	Recognized license revenue of $1.0 million or more on four new contracts during Q3 2015.	 	

 	·	Completed software license wins with new customers such as: Citizen Watch, FreshDirect, ID Logistics, JM Family Enterprises, L.L.Bean, Lojas Riachuelo, Parlogis, Santens Service.	 	

 	·	Expanded relationships with existing customers such as: Alliance Healthcare, Banaja Holdings, Beger, Belk, Brooks Brothers, Coach, Con-Way Truckload, Damco Distribution Services, Inc., DCG Fulfillment, Dentsply International, Eram, Harris Teeter, Hastings Deering, Innes, Integracolor, Jasco, MatahariMall.com, MXD Group, My Chemist, New Balance Athletics, Office Depot Mexico, Ozburn-Hessey Logistics, Petrovich, PurCotton, Richline Group, Rochester Drug Cooperative, Servicios Empresariales Zimag, Simplehuman, Southern Wine & Spirits of America, Speed Global Services, Sportsman’s Guide (A Northern Tool and Equipment Company), Stella and Dot, Team Hardinger Transportation and Warehousing, The Hillman Group, Tuesday Morning, United Natural Foods, Vitamin Shoppe, Wineworks, Winning Appliances, Woodcraft Supply.

 	

 	
 
2015 GUIDANCE
Manhattan Associates provides the following updated revenue and diluted earnings per share guidance for the full year 2015:

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). Beginning the close of business on December 15, 2015, Manhattan Associates will observe a “Quiet Period” during which Manhattan Associates and its representatives will not comment concerning previously published financial expectations. Prior to the start of the Quiet Period, the public can continue to rely on the expectations published in this 2015 Guidance section as being Manhattan Associates’ current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. During the Quiet Period, previously published expectations should be considered historical only, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until publication of Manhattan Associates’ next quarterly earnings release, currently scheduled for the first full week of February 2016.

 	
 
CONFERENCE CALL
The Company’s conference call regarding its third quarter financial results will be held today, October 20, 2015, at 4:30 p.m. Eastern Daylight 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 52894484 or via the web 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’ fourth quarter 2015 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 operating results. These measures are not in accordance with – or an alternative 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 important 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’s competitors and 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 nine months ended September 30, 2015.  
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 makes commerce-ready supply chains that bring all points of commerce together so you’re ready to sell and ready to execute. Across the store, through your network or from your fulfillment center, we design, build and deliver market-leading solutions that support both top-line growth and bottom-line profitability. By converging front-end sales with back-end supply chain execution, our software, platform technology and unmatched experience help our customers get commerce ready—and 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 “2015 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 additional risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. 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 September 30,	 	 	Nine Months Ended September 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Software license	 	$	19,130	 	 	$	16,945	 	 	$	58,202	 	 	$	52,041	 	
Services	 	 	112,549	 	 	 	98,518	 	 	 	321,096	 	 	 	278,950	 	
Hardware and other	 	 	10,625	 	 	 	10,145	 	 	 	35,638	 	 	 	30,710	 	
Total revenue	 	 	142,304	 	 	 	125,608	 	 	 	414,936	 	 	 	361,701	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of license	 	 	2,305	 	 	 	1,679	 	 	 	7,348	 	 	 	5,140	 	
Cost of services	 	 	46,682	 	 	 	43,689	 	 	 	137,930	 	 	 	123,606	 	
Cost of hardware and other	 	 	9,109	 	 	 	8,496	 	 	 	29,819	 	 	 	25,240	 	
Research and development	 	 	13,589	 	 	 	12,236	 	 	 	40,402	 	 	 	35,906	 	
Sales and marketing	 	 	10,904	 	 	 	11,476	 	 	 	34,640	 	 	 	36,344	 	
General and administrative	 	 	14,058	 	 	 	10,856	 	 	 	37,223	 	 	 	32,761	 	
Depreciation and amortization	 	 	1,977	 	 	 	1,675	 	 	 	5,656	 	 	 	4,652	 	
Total costs and expenses	 	 	98,624	 	 	 	90,107	 	 	 	293,018	 	 	 	263,649	 	
Operating income	 	 	43,680	 	 	 	35,501	 	 	 	121,918	 	 	 	98,052	 	
Other income (loss), net	 	 	604	 	 	 	(55	)	 	 	1,225	 	 	 	24	 	
Income before income taxes	 	 	44,284	 	 	 	35,446	 	 	 	123,143	 	 	 	98,076	 	
Income tax provision	 	 	16,387	 	 	 	13,106	 	 	 	46,038	 	 	 	36,430	 	
Net income	 	$	27,897	 	 	$	22,340	 	 	$	77,105	 	 	$	61,646	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per share	 	$	0.38	 	 	$	0.30	 	 	$	1.05	 	 	$	0.82	 	
Diluted earnings per share	 	$	0.38	 	 	$	0.30	 	 	$	1.04	 	 	$	0.81	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	73,259	 	 	 	74,687	 	 	 	73,616	 	 	 	75,255	 	
Diluted	 	 	73,761	 	 	 	75,466	 	 	 	74,162	 	 	 	76,104	 	

 

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

 
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	$	43,680	 	 	$	35,501	 	 	$	121,918	 	 	$	98,052	 	
Equity-based compensation (a)	 	 	5,348	 	 	 	2,297	 	 	 	11,087	 	 	 	6,967	 	
Purchase amortization (b)	 	 	113	 	 	 	58	 	 	 	325	 	 	 	59	 	
Adjusted operating income (Non-GAAP)	 	$	49,141	 	 	$	37,856	 	 	$	133,330	 	 	$	105,078	 	

Income tax provision	 	$	16,387	 	 	$	13,106	 	 	$	46,038	 	 	$	36,430	 	
Equity-based compensation (a)	 	 	2,011	 	 	 	852	 	 	 	4,169	 	 	 	2,585	 	
Purchase amortization (b)	 	 	42	 	 	 	22	 	 	 	122	 	 	 	22	 	
Adjusted income tax provision (Non-GAAP)	 	$	18,440	 	 	$	13,980	 	 	$	50,329	 	 	$	39,037	 	

Net income	 	$	27,897	 	 	$	22,340	 	 	$	77,105	 	 	$	61,646	 	
Equity-based compensation (a)	 	 	3,337	 	 	 	1,445	 	 	 	6,918	 	 	 	4,382	 	
Purchase amortization (b)	 	 	71	 	 	 	36	 	 	 	203	 	 	 	37	 	
Adjusted net income (Non-GAAP)	 	$	31,305	 	 	$	23,821	 	 	$	84,226	 	 	$	66,065	 	

Diluted EPS	 	$	0.38	 	 	$	0.30	 	 	$	1.04	 	 	$	0.81	 	
Equity-based compensation (a)	 	 	0.05	 	 	 	0.02	 	 	 	0.09	 	 	 	0.06	 	
Purchase amortization (b)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Adjusted diluted EPS (Non-GAAP)	 	$	0.42	 	 	$	0.32	 	 	$	1.14	 	 	$	0.87	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fully diluted shares	 	 	73,761	 	 	 	75,466	 	 	 	74,162	 	 	 	76,104	 	
 
(a)	Adjusted results exclude all equity-based compensation, to facilitate comparison with our competitors and 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 nine months ended September 30, 2015 and 2014:	
 
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	2015	 	 	2014	 	 	2015	 	 	2014	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	$	504	 	 	$	441	 	 	$	2,024	 	 	$	1,288	 	
Research and development	 	 	575	 	 	 	374	 	 	 	1,503	 	 	 	1,133	 	
Sales and marketing	 	 	847	 	 	 	389	 	 	 	1,727	 	 	 	1,094	 	
General and administrative	 	 	3,422	 	 	 	1,093	 	 	 	5,833	 	 	 	3,452	 	
Total equity-based compensation	 	$	5,348	 	 	$	2,297	 	 	$	11,087	 	 	$	6,967	 	
 
(b)	Adjustments represent purchased intangibles amortization from prior acquisition. Such amortization is excluded from adjusted results to facilitate comparison with our competitors and 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)

 
 	 	September 30, 2015	 	 	December 31, 2014	 	
 	 	(unaudited)	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	109,029	 	 	$	115,708	 	
Short-term investments	 	 	10,117	 	 	 	8,730	 	
Accounts receivable, net of allowance of $6,863 and $4,164, respectively	 	 	92,045	 	 	 	86,828	 	
Deferred income taxes	 	 	9,352	 	 	 	9,900	 	
Prepaid expenses and other current assets	 	 	11,092	 	 	 	8,695	 	
Total current assets	 	 	231,635	 	 	 	229,861	 	
 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	21,351	 	 	 	17,265	 	
Goodwill, net	 	 	62,237	 	 	 	62,250	 	
Deferred income taxes	 	 	260	 	 	 	270	 	
Other assets	 	 	7,264	 	 	 	8,524	 	
Total assets	 	$	322,747	 	 	$	318,170	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	10,095	 	 	$	12,483	 	
Accrued compensation and benefits	 	 	24,914	 	 	 	30,889	 	
Accrued and other liabilities	 	 	12,258	 	 	 	12,501	 	
Deferred revenue	 	 	65,180	 	 	 	58,968	 	
Income taxes payable	 	 	7,204	 	 	 	7,974	 	
Total current liabilities	 	 	119,651	 	 	 	122,815	 	
 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	12,733	 	 	 	13,332	 	
 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2015 and 2014	 	 	-	 	 	 	-	 	
Common stock, $0.01 par value; 200,000,000 shares authorized; 73,064,213 and 74,104,064 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	 	 	731	 	 	 	741	 	
Retained earnings	 	 	201,673	 	 	 	191,305	 	
Accumulated other comprehensive loss	 	 	(12,041	)	 	 	(10,023	)	
Total shareholders' equity	 	 	190,363	 	 	 	182,023	 	
Total liabilities and shareholders' equity	 	$	322,747	 	 	$	318,170	 	

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)

 
 	 	Nine Months Ended September 30,	 	
 	 	2015	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	77,105	 	 	$	61,646	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	5,656	 	 	 	4,652	 	
Equity-based compensation	 	 	11,087	 	 	 	6,967	 	
Gain on disposal of equipment	 	 	(38	)	 	 	(23	)	
Tax benefit of stock awards exercised/vested	 	 	8,435	 	 	 	7,395	 	
Excess tax benefits from equity-based compensation	 	 	(8,413	)	 	 	(7,359	)	
Deferred income taxes	 	 	712	 	 	 	122	 	
Unrealized foreign currency loss (gain)	 	 	86	 	 	 	(36	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	(6,609	)	 	 	(17,147	)	
Other assets	 	 	(1,592	)	 	 	(6,408	)	
Accounts payable, accrued and other liabilities	 	 	(8,444	)	 	 	1,564	 	
Income taxes	 	 	(602	)	 	 	(2,442	)	
Deferred revenue	 	 	6,651	 	 	 	4,786	 	
Net cash provided by operating activities	 	 	84,034	 	 	 	53,717	 	
 	 	 	 	 	 	 	 	 	
Investing activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(9,619	)	 	 	(6,676	)	
Net purchases of investments	 	 	(1,825	)	 	 	(1,849	)	
Payment in connection with acquisition	 	 	-	 	 	 	(2,773	)	
Net cash used in investing activities	 	 	(11,444	)	 	 	(11,298	)	
 	 	 	 	 	 	 	 	 	
Financing activities:	 	 	 	 	 	 	 	 	
Purchase of common stock	 	 	(86,839	)	 	 	(73,706	)	
Proceeds from issuance of common stock from options exercised	 	 	568	 	 	 	1,014	 	
Excess tax benefits from equity-based compensation	 	 	8,413	 	 	 	7,359	 	
Net cash used in financing activities	 	 	(77,858	)	 	 	(65,333	)	
 	 	 	 	 	 	 	 	 	
Foreign currency impact on cash	 	 	(1,411	)	 	 	(345	)	
 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	 	 	(6,679	)	 	 	(23,259	)	
Cash and cash equivalents at beginning of period	 	 	115,708	 	 	 	124,375	 	
Cash and cash equivalents at end of period	 	$	109,029	 	 	$	101,116	 	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1.	GAAP and Adjusted earnings per share by quarter are as follows:	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
GAAP Diluted EPS	 	$	0.24	 	 	$	0.27	 	 	$	0.30	 	 	$	0.27	 	 	$	1.08	 	 	$	0.31	 	 	$	0.35	 	 	$	0.38	 	 	$	1.04	 	
Adjustments to GAAP:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
   compensation	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.08	 	 	 	0.03	 	 	 	0.02	 	 	 	0.05	 	 	 	0.09	 	
Purchase amortization	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Adjusted Diluted EPS	 	$	0.26	 	 	$	0.29	 	 	$	0.32	 	 	$	0.30	 	 	$	1.16	 	 	$	0.34	 	 	$	0.37	 	 	$	0.42	 	 	$	1.14	 	
Fully Diluted Shares	 	 	76,795	 	 	 	76,037	 	 	 	75,466	 	 	 	75,034	 	 	 	75,841	 	 	 	74,607	 	 	 	74,126	 	 	 	73,761	 	 	 	74,162	 	

2.	Revenues and operating income by reportable segment are as follows (in thousands):	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	91,355	 	 	$	98,633	 	 	$	103,419	 	 	$	108,557	 	 	$	401,964	 	 	$	109,959	 	 	$	117,154	 	 	$	120,118	 	 	$	347,231	 	
EMEA	 	 	15,679	 	 	 	15,911	 	 	 	14,253	 	 	 	15,012	 	 	 	60,855	 	 	 	18,305	 	 	 	17,175	 	 	 	16,829	 	 	 	52,309	 	
APAC	 	 	6,529	 	 	 	7,986	 	 	 	7,936	 	 	 	6,834	 	 	 	29,285	 	 	 	5,259	 	 	 	4,780	 	 	 	5,357	 	 	 	15,396	 	
 	 	$	113,563	 	 	$	122,530	 	 	$	125,608	 	 	$	130,403	 	 	$	492,104	 	 	$	133,523	 	 	$	139,109	 	 	$	142,304	 	 	$	414,936	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	24,133	 	 	$	25,127	 	 	$	28,750	 	 	$	23,926	 	 	$	101,936	 	 	$	30,182	 	 	$	36,214	 	 	$	36,407	 	 	$	102,803	 	
EMEA	 	 	4,058	 	 	 	4,239	 	 	 	3,617	 	 	 	3,399	 	 	 	15,313	 	 	 	5,522	 	 	 	4,516	 	 	 	5,909	 	 	 	15,947	 	
APAC	 	 	1,860	 	 	 	3,134	 	 	 	3,134	 	 	 	1,747	 	 	 	9,875	 	 	 	1,160	 	 	 	644	 	 	 	1,364	 	 	 	3,168	 	
 	 	$	30,051	 	 	$	32,500	 	 	$	35,501	 	 	$	29,072	 	 	$	127,124	 	 	$	36,864	 	 	$	41,374	 	 	$	43,680	 	 	$	121,918	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments (pre-tax):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
   compensation	 	$	2,274	 	 	$	2,396	 	 	$	2,297	 	 	$	2,704	 	 	$	9,671	 	 	$	3,078	 	 	$	2,661	 	 	$	5,348	 	 	$	11,087	 	
Purchase amortization	 	 	1	 	 	 	-	 	 	 	58	 	 	 	106	 	 	 	165	 	 	 	106	 	 	 	106	 	 	 	113	 	 	 	325	 	
 	 	$	2,275	 	 	$	2,396	 	 	$	2,355	 	 	$	2,810	 	 	$	9,836	 	 	$	3,184	 	 	$	2,767	 	 	$	5,461	 	 	$	11,412	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted non-GAAP
   Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	26,408	 	 	$	27,523	 	 	$	31,105	 	 	$	26,736	 	 	$	111,772	 	 	$	33,366	 	 	$	38,981	 	 	$	41,868	 	 	$	114,215	 	
EMEA	 	 	4,058	 	 	 	4,239	 	 	 	3,617	 	 	 	3,399	 	 	 	15,313	 	 	 	5,522	 	 	 	4,516	 	 	 	5,909	 	 	 	15,947	 	
APAC	 	 	1,860	 	 	 	3,134	 	 	 	3,134	 	 	 	1,747	 	 	 	9,875	 	 	 	1,160	 	 	 	644	 	 	 	1,364	 	 	 	3,168	 	
 	 	$	32,326	 	 	$	34,896	 	 	$	37,856	 	 	$	31,882	 	 	$	136,960	 	 	$	40,048	 	 	$	44,141	 	 	$	49,141	 	 	$	133,330	 	

 

 
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): 	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Professional services	 	$	59,422	 	 	$	65,702	 	 	$	69,398	 	 	$	65,536	 	 	$	260,058	 	 	$	72,659	 	 	$	76,548	 	 	$	80,994	 	 	$	230,201	 	
Customer support and
   software enhancements	 	 	27,491	 	 	 	27,817	 	 	 	29,120	 	 	 	31,537	 	 	 	115,965	 	 	 	28,544	 	 	 	30,796	 	 	 	31,555	 	 	 	90,895	 	
Total services revenue	 	$	86,913	 	 	$	93,519	 	 	$	98,518	 	 	$	97,073	 	 	$	376,023	 	 	$	101,203	 	 	$	107,344	 	 	$	112,549	 	 	$	321,096	 	

4.	Hardware and other revenue includes the following items (in thousands):	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Hardware revenue	 	$	5,946	 	 	$	6,114	 	 	$	4,707	 	 	$	8,856	 	 	$	25,623	 	 	$	7,730	 	 	$	7,080	 	 	$	5,462	 	 	$	20,272	 	
Billed travel	 	 	3,597	 	 	 	4,908	 	 	 	5,438	 	 	 	4,932	 	 	 	18,875	 	 	 	5,276	 	 	 	4,927	 	 	 	5,163	 	 	 	15,366	 	
Total hardware and
   other revenue	 	$	9,543	 	 	$	11,022	 	 	$	10,145	 	 	$	13,788	 	 	$	44,498	 	 	$	13,006	 	 	$	12,007	 	 	$	10,625	 	 	$	35,638	 	

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):
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Revenue	 	$	202	 	 	$	696	 	 	$	479	 	 	$	(1,397	)	 	$	(20	)	 	$	(3,426	)	 	$	(3,599	)	 	$	(3,421	)	 	$	(10,446	)	
Costs and expenses	 	 	(713	)	 	 	73	 	 	 	522	 	 	 	(1,097	)	 	 	(1,215	)	 	 	(2,546	)	 	 	(3,201	)	 	 	(2,820	)	 	 	(8,567	)	
Operating income	 	 	915	 	 	 	623	 	 	 	(43	)	 	 	(300	)	 	 	1,195	 	 	 	(880	)	 	 	(398	)	 	 	(601	)	 	 	(1,879	)	
Foreign currency (losses)
   gains in other income	 	 	(516	)	 	 	12	 	 	 	(415	)	 	 	491	 	 	 	(428	)	 	 	(86	)	 	 	(4	)	 	 	213	 	 	 	123	 	
 	 	$	399	 	 	$	635	 	 	$	(458	)	 	$	191	 	 	$	767	 	 	$	(966	)	 	$	(402	)	 	$	(388	)	 	$	(1,756	)	
 
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):
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Operating income	 	$	898	 	 	$	505	 	 	$	(171	)	 	$	24	 	 	$	1,256	 	 	$	72	 	 	$	468	 	 	$	571	 	 	$	1,111	 	
Foreign currency (losses)
   gains in other income	 	 	(141	)	 	 	(129	)	 	 	191	 	 	 	342	 	 	 	263	 	 	 	45	 	 	 	182	 	 	 	423	 	 	 	650	 	
Total impact of changes
   in the Indian Rupee	 	$	757	 	 	$	376	 	 	$	20	 	 	$	366	 	 	$	1,519	 	 	$	117	 	 	$	650	 	 	$	994	 	 	$	1,761	 	

 

 
6.	Other income (loss) includes the following components (in thousands): 	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Interest income	 	$	267	 	 	$	302	 	 	$	349	 	 	$	350	 	 	$	1,268	 	 	$	324	 	 	$	335	 	 	$	336	 	 	$	995	 	
Foreign currency (losses)
   gains	 	 	(516	)	 	 	12	 	 	 	(415	)	 	 	491	 	 	 	(428	)	 	 	(86	)	 	 	(4	)	 	 	213	 	 	 	123	 	
Other non-operating
   income (expense)	 	 	16	 	 	 	(2	)	 	 	11	 	 	 	9	 	 	 	34	 	 	 	24	 	 	 	28	 	 	 	55	 	 	 	107	 	
Total other (loss) income	 	$	(233	)	 	$	312	 	 	$	(55	)	 	$	850	 	 	$	874	 	 	$	262	 	 	$	359	 	 	$	604	 	 	$	1,225	 	

7.	Total equity-based compensation is as follows (in thousands except per share amounts):	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Total equity-based
   compensation -
   restricted stock	 	$	2,274	 	 	$	2,396	 	 	$	2,297	 	 	$	2,704	 	 	$	9,671	 	 	$	3,078	 	 	$	2,661	 	 	$	5,348	 	 	$	11,087	 	
Income tax provision	 	 	844	 	 	 	889	 	 	 	852	 	 	 	990	 	 	 	3,575	 	 	 	1,154	 	 	 	1,004	 	 	 	2,011	 	 	 	4,169	 	
Net income	 	$	1,430	 	 	$	1,507	 	 	$	1,445	 	 	$	1,714	 	 	$	6,096	 	 	$	1,924	 	 	$	1,657	 	 	$	3,337	 	 	$	6,918	 	
Diluted earnings per
   share - restricted
   stock	 	$	0.02	 	 	$	0.02	 	 	$	0.02	 	 	$	0.02	 	 	$	0.08	 	 	$	0.03	 	 	$	0.02	 	 	$	0.05	 	 	$	0.09	 	

8.	Capital expenditures are as follows (in thousands):	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Capital expenditures	 	$	1,156	 	 	$	2,424	 	 	$	3,096	 	 	$	2,739	 	 	$	9,415	 	 	$	3,098	 	 	$	2,671	 	 	$	3,850	 	 	$	9,619	 	

9.	Stock Repurchase Activity (in thousands):	
 
 	 	2014	 	 	2015	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	YTD	 	
Shares purchased under
   publicly-announced
   buy-back program	 	695	 	 	 	782	 	 	 	504	 	 	 	639	 	 	 	2,620	 	 	 	524	 	 	 	458	 	 	 	399	 	 	 	1,381	 	
Shares withheld for taxes
   due upon vesting of
   restricted stock	 	235	 	 	 	1	 	 	 	10	 	 	 	3	 	 	 	249	 	 	 	212	 	 	 	2	 	 	 	9	 	 	 	223	 	
Total shares purchased	 	 	930	 	 	 	783	 	 	 	514	 	 	 	642	 	 	 	2,869	 	 	 	736	 	 	 	460	 	 	 	408	 	 	 	1,604	 	
Total cash paid for shares
   purchased under
   publicly-announced
   buy-back program	$	25,459	 	 	$	25,090	 	 	$	15,112	 	 	$	25,422	 	 	$	91,083	 	 	$	26,306	 	 	$	25,214	 	 	$	25,001	 	 	$	76,521	 	
Total cash paid for shares
   withheld for taxes due
   upon vesting of restricted
   stock	 	7,720	 	 	 	36	 	 	 	289	 	 	 	76	 	 	 	8,121	 	 	 	9,727	 	 	 	83	 	 	 	508	 	 	 	10,318	 	
Total cash paid for shares
   repurchased	 	$	33,179	 	 	$	25,126	 	 	$	15,401	 	 	$	25,498	 	 	$	99,204	 	 	$	36,033	 	 	$	25,297	 	 	$	25,509	 	 	$	86,839