UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): February 1, 2011
MANHATTAN ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
 	 	 	 	 	
Georgia	 	0-23999	 	58-2373424	
 	 	 	 	 	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	

2300 Windy Ridge Parkway, Suite 1000,
Atlanta, Georgia	 	 
30339	
 	 	 	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (770) 955-7070
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:
o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	 	 	
o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	 	 	
o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	 	 	
o	 	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 February 1, 2011, Manhattan Associates, Inc. (the “Company”) issued a press release providing the results for its financial performance for the fourth quarter and the year ended December 31, 2010. 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 earnings per share, which excludes the impact of acquisition-related costs and the amortization thereof, the recapture of previously recognized transaction tax expense, stock option expense, and restructuring charges — all net of income tax effects and unusual tax adjustments.
This press release also includes our historic adjusted results, and our adjusted earnings per share estimate for the fiscal year ended December 31, 2011, excluding all equity compensation expense, not just stock option expense. The Company previously did not exclude restricted stock expense from its adjusted results, but anticipates doing so on an ongoing basis.
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.
Adjusted Income and Earnings Per Share
We believe that these adjusted (non-GAAP) results provide more meaningful information regarding those aspects of our current operating performance that can be effectively managed, and consequently have developed our internal reporting, compensation and planning systems using these measures. Non-GAAP measures used in the press release exclude the impact of the items described above for the following reasons:
 	•	 	Because we sporadically engage in acquisitions, we incur acquisition-related costs that consist primarily of expenses from accounting and legal due diligence, 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, and thus we exclude these amortization costs when calculating adjusted net income and adjusted earnings per share to facilitate more relevant and meaningful comparisons of our operating results with that of our competitors.	

 	•	 	Because we have recognized the full potential amount of the transaction (sales) tax expense in prior periods, any recovery of that expense resulting from the expiration of the state sales tax statutes, the collection of the taxes from our customers or a sales tax audit refund would overstate the current period net income derived from our core operations as the recovery is not a result of anything occurring within our control during the current period.	

1

 

 	•	 	Because stock option expense is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control, the impact of such expense is not subject to effective management by us. We believe excluding the impact of stock option expense in adjusted operating income, adjusted net income and adjusted earnings per share is consistent with similar practice by our competitors and other companies within our industry.	

 	•	 	We do not believe that the restructuring charge incurred in 2009 related to our reductions in force, or future restructuring charges related to staff reductions, are common costs that result from normal operating activities; rather, we believe these staff rationalizations relate to the extremely depressed economic conditions that have pervaded global markets since 2008. Thus, we have not included these restructuring charges in the assessment of our operating performance.	

 	•	 	As discussed above, we excluded stock option expense from adjusted non-GAAP results because it is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control. Therefore, we also excluded the related tax benefit generated upon their disposition.	

 	•	 	On a going forward basis, we intend to exclude all equity compensation expense—not just stock option expense—from our adjusted results, because equity compensation 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 compensation expense.	
For these reasons, we have developed our internal reporting, compensation and planning systems using non-GAAP measures which adjust for these amounts.
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, as distinct from results that include items that are not indicative of ongoing operating results, and thus provide the investors with useful insight into our profitability exclusive of unusual adjustments. While these adjusted items may not be considered as non-recurring in nature in a strictly accounting sense, management regards those items as infrequent and not arising out of the ordinary course of business and finds it useful to utilize a non-GAAP measure in evaluating the performance of our underlying core 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, enable investors to evaluate our operating performance in a manner consistent with our internal basis of measurement and also present our investors our operating results on the same basis as that used by our management. 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 per share facilitate management’s internal comparisons to our historical operating results and comparisons to competitors’ operating results.

2

 
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 or severance related activities 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 February 1, 2011	

3

 
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: February 1, 2011

4

 
EXHIBIT INDEX
 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	 	 	 	 	
 	99.1	 	 	Press Release, dated February 1, 2011.	

5

Exhibit 99.1

Contact:	 	Dennis Story
Chief Financial Officer
Manhattan Associates, Inc.
678-597-7115
dstory@manh.com	 	Will Haraway
Senior Manager, Media Relations
Manhattan Associates, Inc.
678-597-7466
wharaway@manh.com	
Manhattan Associates Reports Fourth Quarter and Full Year
2010 Revenue and Earnings

Q4 Total Revenue of $71.5 Million is up 15% over Q4 2009
ATLANTA — February 1, 2011 — Leading supply chain optimization provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported fourth quarter 2010 non-GAAP adjusted diluted earnings per share of $0.32 compared to $0.31 in the 2009 fourth quarter, and GAAP diluted earnings per share of $0.29 compared to $0.26 in the prior year fourth quarter. The Company posted total fourth quarter revenue of $71.5 million, an increase of 15% from overall revenue posted in the fourth quarter of 2009.
For the year ended December 31, 2010, non-GAAP adjusted diluted earnings per share of $1.38 compared to $0.96 for the full year 2009, and record GAAP diluted earnings per share of $1.25 compared to $0.73 in the prior year. For the twelve months ended December 31, 2010, the Company posted total revenue of $297.1 million, an increase of 20%, compared to 2009 full year revenue.
Manhattan Associates President and CEO Pete Sinisgalli commented, “We posted solid fourth quarter and full year financial results. We are particularly pleased with our market’s acceptance of our latest Supply Chain Optimization solutions and remain quite optimistic about our ability to deliver meaningful value to customers and shareholders.”
FOURTH QUARTER 2010 FINANCIAL SUMMARY:
 	•	 	Adjusted diluted earnings per share, a non-GAAP measure, was $0.32 in the fourth quarter of 2010, compared to $0.31 in the fourth quarter of 2009.	

 	•	 	The Company reported GAAP diluted earnings per share of $0.29 in the fourth quarter of 2010, compared to $0.26 in the fourth quarter of 2009.	

 

 

 	•	 	Consolidated revenue for the fourth quarter of 2010 was $71.5 million, compared to $62.1 million in the fourth quarter of 2009. License revenue was $12.7 million in the fourth quarter of 2010, compared to $14.3 million in the fourth quarter of 2009.	

 	•	 	Adjusted operating income, a non-GAAP measure, was $10.1 million in the fourth quarter of 2010, compared to $12.0 million in the fourth quarter of 2009.	

 	•	 	GAAP operating income for the fourth quarter of 2010 was $8.8 million, compared to $9.9 million in the fourth quarter of 2009.	

 	•	 	Cash flow from operations was $14.6 million in the fourth quarter of 2010, compared to $19.4 million in the fourth quarter of 2009. Days Sales Outstanding were 61 days at December 31, 2010, compared to 60 days at September 30, 2010.	

 	•	 	Cash and investments on-hand at December 31, 2010 was $126.9 million, compared to $116.7 million at September 30, 2010.	

 	•	 	The Company repurchased approximately 680,000 common shares under the share repurchase program authorized by the Board of Directors, totaling $21.0 million at an average share price of $30.92 in the fourth quarter of 2010. In January 2011, Manhattan’s Board of Directors approved raising the Company’s share repurchase authority for Manhattan Associates common stock to a total of $50 million.	
FULL YEAR FINANCIAL SUMMARY:
 	•	 	Adjusted diluted earnings per share, a non-GAAP measure, was $1.38 for the twelve months ended December 31, 2010, compared to $0.96 for the twelve months ended December 31, 2009.	

 	•	 	GAAP diluted earnings per share for the twelve months ended December 31, 2010 was a record $1.25, compared to $0.73 for the twelve months ended December 31, 2009.	

 	•	 	Consolidated revenue for the full year of 2010 was $297.1 million, compared to $246.7 million for the year ended December 31, 2009. License revenue was $54.5 million for the twelve months ended December 31, 2010, compared to $34.7 million in the twelve months ended December 31, 2009.	

 	•	 	Adjusted operating income, a non-GAAP measure, was $46.8 million for the twelve months ended December 31, 2010, compared to $33.1 million for the twelve months ended December 31, 2009.	

 

 

 	•	 	GAAP operating income was $41.9 million for the twelve months ended December 31, 2010, which includes $1.2 million of recoveries of previously expensed sales tax associated with expiring sales tax audit statutes, compared to $21.1 million for the twelve months ended December 31, 2009, which includes restructuring charges of $3.9 million associated with the workforce reduction executed in the second quarter of 2009.	

 	•	 	For the twelve months ended December 31, 2010, the Company repurchased approximately 2.7 million common shares at an average share price of $28.15, for a total investment of $76.5 million.	
SALES ACHIEVEMENTS:
 	•	 	Closing one contract of $1.0 million or more in recognized license revenue during the quarter.	

 	•	 	Completing software license wins with new customers such as: Axstores AB; Baoxiniao Group Co.; Chanel (China) Co.; Five Below, Inc.; Itochu Logistics China Co.; Factory Motor Parts; Kane Warehousing, Inc.; Mitsubishi Fuso Truck and Bus Company; Lam Soon Edible Oils; Mitsubishi Motors; Oatey Co.; Petro LLC; Shanghai KW Logistics Co.; Total Sweeteners, Inc.; VIP Shop; and YiFeng Super Drugstore.	

 	•	 	Expanding partnerships with existing customers such as: 3 Suisses International; AAA Cooper Transportation, Inc.; adidas AG; Brown Shoe Company, Inc.; C&J Clark America, Inc, Chico’s Retail Services, Inc., Cornerstone Brands, Inc., Costa’s PTY; Fasteners for Retail; Dick’s Sporting Goods; Excell Home Fashions Inc.; Guitar Center; Innotrac Corporation; Jasco Products Company LLC; Lamps Plus, Inc.; Mulberry Group; Northern Safety Co., Inc.; Olympus Corporation of the Americas; O’Reilly Automotive, Inc.; Panalpina Management AG; PETsMART, Inc.; RGH Enterprises, Inc.; Speed Transportation; Union Underwear Company, Inc; Unipart Logistics Limited; Vera Bradley Designs; VF Services, Inc.; and Wirtz Corporation.	
2011 GUIDANCE
Manhattan Associates provided the following revenue and diluted earnings per share guidance for the full year 2011. As detailed in Note 10 in the supplemental attachments to this release, this guidance excludes restricted stock expense previously included in adjusted results.

 

 

Additionally, a full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Guidance Range — 2011 Full year	 	
 	 	$ Range	 	 	% Growth range	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue (in millions)	 	$	325	 	 	$	330	 	 	 	10	%	 	 	11	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted earnings per share — Non-GAAP	 	 	1.77	 	 	 	1.82	 	 	 	12	%	 	 	15	%	
GAAP earnings per share	 	 	1.45	 	 	 	1.50	 	 	 	16	%	 	 	20	%	
Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. These statements are forward-looking. Actual results may differ materially, especially in the current uncertain economic environment. These statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of this release.
Manhattan Associates will make its earnings release and published expectations available on its Web site (www.manh.com). Beginning March 16, 2011, 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 2011 Guidance section as still 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, speaking only as of or prior to the Quiet Period, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until the date when Manhattan Associates’ next quarterly earnings release is published, currently scheduled for the third week of April 2011.
CONFERENCE CALL
The Company’s conference call regarding its fourth quarter and full year financial results will be held at 4:30 p.m. Eastern Time on Tuesday, February 1, 2011. 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 +1.800.642.1687 in the U.S. and Canada, or +1.706.645.9291 outside the U.S., and entering the conference identification number 35221052 or via the web at www.manh.com . The phone replay will be available for two weeks after the call, and the Internet broadcast will be available until Manhattan Associates’ first quarter 2011 earnings release.

 

 

GAAP VERSUS NON-GAAP PRESENTATION
The Company provides adjusted operating income, adjusted net income and adjusted 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 for — 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’ understanding of its historical operating trends, because it provides important supplemental measurement information in evaluating the operating results of its business, as distinct from results that include items that are not indicative of ongoing operating results. The Company consequently believes that the presentation of these non-GAAP financial measures provides investors with useful insight into its profitability. This release should be read in conjunction with its Form 8-K earnings release filing for the quarter ended December 31, 2010.
The non-GAAP adjusted operating income, adjusted net income and adjusted earnings per share exclude the impact of acquisition-related costs and the amortization thereof; the recapture of previously recognized sales tax expense; stock option expense; and restructuring charges — all net of income tax effects and unusual tax adjustments. In addition, the Company’s forward-looking non-GAAP adjusted earnings per share included with its 2011 Guidance excludes all equity compensation expense. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments is included in the supplemental information attached to this release.
The Company also has presented certain information excluding the effect between periods of changes in exchange rates between the U.S. dollar and the functional currencies of its foreign subsidiaries. Certain information regarding the effect of currency exchange rate fluctuation on results is included in Note 5 to the supplemental information attached to this release.

 

 

ABOUT MANHATTAN ASSOCIATES, INC.
Manhattan Associates continues to deliver on its 21-year heritage of providing global supply chain excellence to more than 1,200 customers worldwide that consider supply chain optimization core to their strategic market leadership. The company’s supply chain innovations include: Manhattan SCOPE ®  a portfolio of software solutions and technology that leverages a Supply Chain Process Platform to help organizations optimize their supply chains from planning through execution; Manhattan SCALE™, a portfolio of distribution management and transportation management solutions built on Microsoft .NET technology; and Manhattan Carrier™, a suite of supply chain solutions specifically addressing the needs of the motor carrier industry. For more information, please visit www.manh.com.
This press release contains “forward-looking statements” relating to Manhattan Associates, Inc. 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: the global economic downturn; disruptions in credit markets; delays in product development; competitive pressures; software errors; and additional risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. 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 OPERATIONS
(in thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31,	 	 	Year Ended December 31,	 	
 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Software license	 	$	12,666	 	 	$	14,278	 	 	$	54,450	 	 	$	34,686	 	
Services	 	 	52,023	 	 	 	42,668	 	 	 	213,750	 	 	 	189,850	 	
Hardware and other	 	 	6,824	 	 	 	5,193	 	 	 	28,917	 	 	 	22,131	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	 	71,513	 	 	 	62,139	 	 	 	297,117	 	 	 	246,667	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of license	 	 	1,541	 	 	 	1,105	 	 	 	6,172	 	 	 	4,726	 	
Cost of services	 	 	25,145	 	 	 	20,176	 	 	 	98,776	 	 	 	84,349	 	
Cost of hardware and other	 	 	5,478	 	 	 	4,242	 	 	 	23,844	 	 	 	18,386	 	
Research and development	 	 	9,868	 	 	 	8,485	 	 	 	40,508	 	 	 	36,681	 	
Sales and marketing	 	 	9,832	 	 	 	8,406	 	 	 	42,702	 	 	 	36,137	 	
General and administrative	 	 	8,668	 	 	 	7,271	 	 	 	34,027	 	 	 	29,946	 	
Depreciation and amortization	 	 	2,166	 	 	 	2,578	 	 	 	9,161	 	 	 	11,418	 	
Restructuring charge	 	 	—	 	 	 	(10	)	 	 	—	 	 	 	3,882	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total costs and expenses	 	 	62,698	 	 	 	52,253	 	 	 	255,190	 	 	 	225,525	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	8,815	 	 	 	9,886	 	 	 	41,927	 	 	 	21,142	 	
Other income (loss), net	 	 	239	 	 	 	(374	)	 	 	(143	)	 	 	(756	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes	 	 	9,054	 	 	 	9,512	 	 	 	41,784	 	 	 	20,386	 	
Income tax provision	 	 	2,609	 	 	 	3,639	 	 	 	13,723	 	 	 	3,824	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	6,445	 	 	$	5,873	 	 	$	28,061	 	 	$	16,562	 	

Basic earnings per share	 	$	0.31	 	 	$	0.27	 	 	$	1.31	 	 	$	0.74	 	
Diluted earnings per share	 	$	0.29	 	 	$	0.26	 	 	$	1.25	 	 	$	0.73	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	21,078	 	 	 	22,128	 	 	 	21,497	 	 	 	22,385	 	
Diluted	 	 	22,350	 	 	 	22,667	 	 	 	22,450	 	 	 	22,558	 	

 

 
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,	 	
 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	(unaudited)	 	 	(unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	$	8,815	 	 	$	9,886	 	 	$	41,927	 	 	$	21,142	 	
Stock option expense (a)	 	 	860	 	 	 	1,374	 	 	 	3,792	 	 	 	5,153	 	
Purchase amortization (b)	 	 	439	 	 	 	741	 	 	 	2,287	 	 	 	2,964	 	
Restructuring charge (c)	 	 	—	 	 	 	(10	)	 	 	—	 	 	 	3,882	 	
Sales tax recoveries (d)	 	 	—	 	 	 	—	 	 	 	(1,212	)	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating income (Non-GAAP)	 	$	10,114	 	 	$	11,991	 	 	$	46,794	 	 	$	33,141	 	

Income tax provision	 	$	2,609	 	 	$	3,639	 	 	$	13,723	 	 	$	3,824	 	
Stock option expense (a)	 	 	303	 	 	 	563	 	 	 	1,315	 	 	 	1,791	 	
Purchase amortization (b)	 	 	155	 	 	 	308	 	 	 	793	 	 	 	1,030	 	
Restructuring charge (c)	 	 	—	 	 	 	84	 	 	 	—	 	 	 	1,349	 	
Sales tax recoveries (d)	 	 	(2	)	 	 	—	 	 	 	(420	)	 	 	—	 	
Unusual tax adjustments (e)	 	 	80	 	 	 	—	 	 	 	209	 	 	 	2,770	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted income tax provision (Non-GAAP)	 	$	3,145	 	 	$	4,594	 	 	$	15,620	 	 	$	10,764	 	

Net income	 	$	6,445	 	 	$	5,873	 	 	$	28,061	 	 	$	16,562	 	
Stock option expense (a)	 	 	557	 	 	 	811	 	 	 	2,477	 	 	 	3,362	 	
Purchase amortization (b)	 	 	284	 	 	 	433	 	 	 	1,494	 	 	 	1,934	 	
Restructuring charge (c)	 	 	—	 	 	 	(94	)	 	 	—	 	 	 	2,533	 	
Sales tax recoveries (d)	 	 	2	 	 	 	—	 	 	 	(792	)	 	 	—	 	
Unusual tax adjustments (e)	 	 	(80	)	 	 	—	 	 	 	(209	)	 	 	(2,770	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income (Non-GAAP)	 	$	7,208	 	 	$	7,023	 	 	$	31,031	 	 	$	21,621	 	

Diluted EPS	 	$	0.29	 	 	$	0.26	 	 	$	1.25	 	 	$	0.73	 	
Stock option expense (a)	 	 	0.02	 	 	 	0.04	 	 	 	0.11	 	 	 	0.15	 	
Purchase amortization (b)	 	 	0.01	 	 	 	0.02	 	 	 	0.07	 	 	 	0.09	 	
Restructuring charge (c)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.11	 	
Sales tax recoveries (d)	 	 	—	 	 	 	—	 	 	 	(0.04	)	 	 	—	 	
Unusual tax adjustments (e)	 	 	—	 	 	 	—	 	 	 	(0.01	)	 	 	(0.12	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted diluted EPS (Non-GAAP)	 	$	0.32	 	 	$	0.31	 	 	$	1.38	 	 	$	0.96	 	

Fully diluted shares	 	 	22,350	 	 	 	22,667	 	 	 	22,450	 	 	 	22,558	 	

 

 
 	 	 	
(a)	 	Because stock option expense is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control, the impact of such expense is not subject to effective management by us. Thus, we have excluded the impact of this expense from adjusted non-GAAP results. The stock option expense is included in the following GAAP operating expense lines for the three and nine months ended December 31, 2010 and 2009:	

 	 	Three Months Ended December 31,	 	 	Year Ended December 31,	 	
 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
Cost of services	 	$	97	 	 	$	154	 	 	$	487	 	 	$	630	 	
Research and development	 	 	112	 	 	 	205	 	 	 	571	 	 	 	884	 	
Sales and marketing	 	 	276	 	 	 	391	 	 	 	1,174	 	 	 	1,185	 	
General and administrative	 	 	375	 	 	 	624	 	 	 	1,560	 	 	 	2,454	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stock option expense	 	$	860	 	 	$	1,374	 	 	$	3,792	 	 	$	5,153	 	

(b)	 	Adjustments represent purchased intangibles amortization from prior acquisitions. Such amortization is commonly excluded from GAAP net income by companies in our industry and we therefore exclude these amortization costs to provide more relevant and meaningful comparisons of our operating results to that of our competitors.	
 	 	 	
(c)	 	During the quarter ended June 30, 2009, we committed to and initiated plans to reduce our workforce by approximately 140 positions to realign our capacity based on the revised revenue outlook for 2009. As a result of this initiative, we recorded a restructuring charge of approximately $3.8 million in the second quarter of 2009. The restructuring charge primarily consisted of employee severance and outplacement services. We also recorded additional employee severance expense of $63,000 in the first quarter of 2009 related to the restructuring action taken in the fourth quarter of 2008. We do not believe that the restructuring charge is a common cost that resulted from normal operating activities. Consequently, we have excluded this charge from adjusted non-GAAP results.	
 	 	 	
(d)	 	Adjustment represents recoveries of previously recorded state sales tax resulting primarily from the expiration of the sales tax audit statutes in certain states. Because we have recognized the full potential amount of the sales tax expense in prior periods, any recovery of that expense resulting from the expiration of the statutes or the collection of tax from our customers would overstate the current period net income derived from our core operations as the recovery is not a result of any event occurring within our control during the current period. Thus, we have excluded these recoveries from adjusted non-GAAP results.	
 	 	 	
(e)	 	For the year ended December 31, 2010, the adjustment represents tax benefit from the disqualifying dispositions of incentive stock options that were previously expensed. As discussed above, we excluded stock option expense from adjusted non-GAAP results because it is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control. Therefore, we also excluded the related tax benefit generated upon their disposition. For the year ended December 31, 2009, the majority of the adjustment represents release of income tax reserves resulting from expiration of tax audit statutes for U.S. federal income tax returns filed for 2005 and prior. Because we recorded the majority of the income tax reserves through retained earnings in conjunction with the adoption of ASC 740, Income Taxes, on January 1, 2007, the release of the reserves would overstate the current period net income derived from our core operations. The reversal is partially offset by the establishment of $0.8 million in tax reserves associated with the treatment of currency gains under the Company’s transfer pricing policy with one of its foreign subsidiaries. We do not include this tax in our assessment of our operating performance as it does not relate to our core operations. Thus, we have excluded these tax adjustments from adjusted non-GAAP results.	

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 	 	 	 	 	 	 	 	 	
 	 	December 31, 2010	 	 	December 31, 2009	 	
 	 	(unaudited)	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	120,744	 	 	$	120,217	 	
Short term investments	 	 	4,414	 	 	 	—	 	
Accounts receivable, net of allowance of $5,711 and $4,943 in 2010 and 2009, respectively	 	 	47,419	 	 	 	37,945	 	
Deferred income taxes	 	 	7,214	 	 	 	5,745	 	
Income taxes receivable	 	 	2,446	 	 	 	—	 	
Prepaid expenses and other current assets	 	 	6,743	 	 	 	4,847	 	
 	 	 	 	 	 	 	
Total current assets	 	 	188,980	 	 	 	168,754	 	
 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	14,833	 	 	 	15,759	 	
Long-term investments	 	 	1,711	 	 	 	2,797	 	
Goodwill, net	 	 	62,265	 	 	 	62,280	 	
Acquisition-related intangible assets, net	 	 	1,186	 	 	 	3,473	 	
Deferred income taxes	 	 	8,816	 	 	 	9,826	 	
Other assets	 	 	2,673	 	 	 	1,822	 	
 	 	 	 	 	 	 	
Total assets	 	$	280,464	 	 	$	264,711	 	

LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	7,745	 	 	$	4,434	 	
Accrued compensation and benefits	 	 	19,807	 	 	 	12,855	 	
Accrued and other liabilities	 	 	13,856	 	 	 	15,430	 	
Deferred revenue	 	 	44,974	 	 	 	37,436	 	
Income taxes payable	 	 	—	 	 	 	796	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	86,382	 	 	 	70,951	 	
 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	10,282	 	 	 	10,395	 	
 	 	 	 	 	 	 	 	 	
Shareholders’ equity:	 	 	 	 	 	 	 	 	
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2010 or 2009	 	 	—	 	 	 	—	 	
Common stock, $.01 par value; 100,000,000 shares authorized; 21,729,789 and 22,467,123 shares issued and outstanding at December 31, 2010 and 2009, respectively	 	 	217	 	 	 	225	 	
Additional paid-in capital	 	 	487	 	 	 	2,892	 	
Retained earnings	 	 	184,152	 	 	 	182,387	 	
Accumulated other comprehensive loss	 	 	(1,056	)	 	 	(2,139	)	
 	 	 	 	 	 	 	
Total shareholders’ equity	 	 	183,800	 	 	 	183,365	 	
 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	 	$	280,464	 	 	$	264,711	 	

 

 
MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 	 	 	 	 	 	 	 	 	
 	 	Year Ended December 31,	 	
 	 	2010	 	 	2009	 	
 	 	(unaudited)	 	 	 	 	
Operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	28,061	 	 	$	16,562	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	9,161	 	 	 	11,418	 	
Stock compensation	 	 	10,420	 	 	 	8,622	 	
(Gain) loss on disposal of equipment	 	 	(4	)	 	 	130	 	
Tax benefit (deficiency) of stock awards exercised/vested	 	 	2,207	 	 	 	(1,023	)	
Excess tax benefits from stock based compensation	 	 	(475	)	 	 	(64	)	
Deferred income taxes	 	 	(463	)	 	 	2,077	 	
Unrealized foreign currency loss	 	 	210	 	 	 	1,022	 	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	(9,454	)	 	 	26,658	 	
Other assets	 	 	(2,661	)	 	 	3,058	 	
Accounts payable, accrued and other liabilities	 	 	8,271	 	 	 	(10,453	)	
Income taxes	 	 	(2,934	)	 	 	(3,502	)	
Deferred revenue	 	 	7,633	 	 	 	3,818	 	
 	 	 	 	 	 	 	
Net cash provided by operating activities	 	 	49,972	 	 	 	58,323	 	

Investing activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(5,872	)	 	 	(2,378	)	
Net (purchases) maturities of investments	 	 	(3,011	)	 	 	84	 	
 	 	 	 	 	 	 	
Net cash used in investing activities	 	 	(8,883	)	 	 	(2,294	)	

Financing activities:	 	 	 	 	 	 	 	 	
Purchase of common stock	 	 	(77,703	)	 	 	(23,435	)	
Proceeds from issuance of common stock from options exercised	 	 	36,368	 	 	 	1,662	 	
Excess tax benefits from stock based compensation	 	 	475	 	 	 	64	 	
 	 	 	 	 	 	 	
Net cash used in financing activities	 	 	(40,860	)	 	 	(21,709	)	

Foreign currency impact on cash	 	 	298	 	 	 	158	 	

Net change in cash and cash equivalents	 	 	527	 	 	 	34,478	 	
Cash and cash equivalents at beginning of period	 	 	120,217	 	 	 	85,739	 	
 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	 	$	120,744	 	 	$	120,217	 	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1.	 	GAAP and Adjusted earnings (loss) per share by quarter are as follows:	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
GAAP Diluted EPS	 	$	0.01	 	 	$	(0.02	)	 	$	0.50	 	 	$	0.26	 	 	$	0.73	 	 	$	0.32	 	 	$	0.36	 	 	$	0.28	 	 	$	0.29	 	 	$	1.25	 	
Adjustments to GAAP:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock option expense	 	 	0.04	 	 	 	0.03	 	 	 	0.04	 	 	 	0.04	 	 	 	0.15	 	 	 	0.03	 	 	 	0.03	 	 	 	0.03	 	 	 	0.02	 	 	 	0.11	 	
Purchase amortization	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.09	 	 	 	0.02	 	 	 	0.02	 	 	 	0.02	 	 	 	0.01	 	 	 	0.07	 	
Restructuring charge	 	 	—	 	 	 	0.12	 	 	 	—	 	 	 	—	 	 	 	0.11	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Sales tax recoveries	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.01	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.04	)	
Unusual tax adjustments	 	 	—	 	 	 	—	 	 	 	(0.12	)	 	 	—	 	 	 	(0.12	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted Diluted EPS	 	$	0.07	 	 	$	0.14	 	 	$	0.43	 	 	$	0.31	 	 	$	0.96	 	 	$	0.36	 	 	$	0.38	 	 	$	0.32	 	 	$	0.32	 	 	$	1.38	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As discussed below in note 10, in 2011, to be consistent with other companies in the software industry, we will exclude restricted stock expense from our adjusted results. For comparability, we will also present historical adjusted results excluding restricted stock expense. See note 10 for the restricted stock expense impact on the reported results.
2.	 	Revenues and operating income (loss) by reportable segment are as follows (in thousands):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	50,827	 	 	$	47,372	 	 	$	55,626	 	 	$	52,733	 	 	$	206,558	 	 	$	61,889	 	 	$	64,875	 	 	$	62,555	 	 	$	59,631	 	 	$	248,950	 	
EMEA	 	 	7,030	 	 	 	7,818	 	 	 	6,527	 	 	 	6,650	 	 	 	28,025	 	 	 	7,989	 	 	 	8,587	 	 	 	8,266	 	 	 	7,324	 	 	 	32,166	 	
APAC	 	 	2,968	 	 	 	3,219	 	 	 	3,141	 	 	 	2,756	 	 	 	12,084	 	 	 	4,071	 	 	 	4,179	 	 	 	3,193	 	 	 	4,558	 	 	 	16,001	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	60,825	 	 	$	58,409	 	 	$	65,294	 	 	$	62,139	 	 	$	246,667	 	 	$	73,949	 	 	$	77,641	 	 	$	74,014	 	 	$	71,513	 	 	$	297,117	 	

GAAP Operating Income (Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	260	 	 	$	(407	)	 	$	10,736	 	 	$	10,859	 	 	$	21,448	 	 	$	10,333	 	 	$	9,836	 	 	$	8,121	 	 	$	7,578	 	 	$	35,868	 	
EMEA	 	 	738	 	 	 	1,124	 	 	 	20	 	 	 	(789	)	 	 	1,093	 	 	 	418	 	 	 	1,530	 	 	 	1,214	 	 	 	523	 	 	 	3,685	 	
APAC	 	 	(371	)	 	 	(1,143	)	 	 	299	 	 	 	(184	)	 	 	(1,399	)	 	 	732	 	 	 	651	 	 	 	277	 	 	 	714	 	 	 	2,374	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	627	 	 	$	(426	)	 	$	11,055	 	 	$	9,886	 	 	$	21,142	 	 	$	11,483	 	 	$	12,017	 	 	$	9,612	 	 	$	8,815	 	 	$	41,927	 	

Adjustments (pre-tax):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock option expense	 	$	1,400	 	 	$	1,010	 	 	$	1,369	 	 	$	1,374	 	 	$	5,153	 	 	$	1,178	 	 	$	901	 	 	$	853	 	 	$	860	 	 	$	3,792	 	
Purchase amortization	 	 	741	 	 	 	741	 	 	 	741	 	 	 	741	 	 	 	2,964	 	 	 	638	 	 	 	639	 	 	 	571	 	 	 	439	 	 	 	2,287	 	
Restructuring charge	 	 	59	 	 	 	2,960	 	 	 	—	 	 	 	—	 	 	 	3,019	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Sales tax recoveries	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(420	)	 	 	(792	)	 	 	—	 	 	 	—	 	 	 	(1,212	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	2,200	 	 	$	4,711	 	 	$	2,110	 	 	$	2,115	 	 	$	11,136	 	 	$	1,396	 	 	$	748	 	 	$	1,424	 	 	$	1,299	 	 	$	4,867	 	

EMEA:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charge	 	$	—	 	 	$	20	 	 	$	—	 	 	$	—	 	 	$	20	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	—	 	 	$	20	 	 	$	—	 	 	$	—	 	 	$	20	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

APAC:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charge	 	$	4	 	 	$	849	 	 	$	—	 	 	$	(10	)	 	$	843	 	 	$	—	 	 	$	—	 	 	$	—	 	 	 	 	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	4	 	 	$	849	 	 	$	—	 	 	$	(10	)	 	$	843	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

Total Adjustments	 	$	2,204	 	 	$	5,580	 	 	$	2,110	 	 	$	2,105	 	 	$	11,999	 	 	$	1,396	 	 	$	748	 	 	$	1,424	 	 	$	1,299	 	 	$	4,867	 	

Adjusted non-GAAP Operating Income (Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	2,460	 	 	$	4,304	 	 	$	12,846	 	 	$	12,974	 	 	$	32,584	 	 	$	11,729	 	 	$	10,584	 	 	$	9,545	 	 	$	8,877	 	 	$	40,735	 	
EMEA	 	 	738	 	 	 	1,144	 	 	 	20	 	 	 	(789	)	 	 	1,113	 	 	 	418	 	 	 	1,530	 	 	 	1,214	 	 	 	523	 	 	 	3,685	 	
APAC	 	 	(367	)	 	 	(294	)	 	 	299	 	 	 	(194	)	 	 	(556	)	 	 	732	 	 	 	651	 	 	 	277	 	 	 	714	 	 	 	2,374	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	2,831	 	 	$	5,154	 	 	$	13,165	 	 	$	11,991	 	 	$	33,141	 	 	$	12,879	 	 	$	12,765	 	 	$	11,036	 	 	$	10,114	 	 	$	46,794	 	

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):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
Professional services	 	$	32,345	 	 	$	30,767	 	 	$	27,158	 	 	$	22,500	 	 	$	112,770	 	 	$	33,960	 	 	$	34,349	 	 	$	33,349	 	 	$	30,213	 	 	$	131,871	 	
Customer support and software enhancements	 	 	18,498	 	 	 	18,655	 	 	 	19,759	 	 	 	20,168	 	 	 	77,080	 	 	 	19,501	 	 	 	20,431	 	 	 	20,137	 	 	 	21,810	 	 	 	81,879	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total services revenue	 	$	50,843	 	 	$	49,422	 	 	$	46,917	 	 	$	42,668	 	 	$	189,850	 	 	$	53,461	 	 	$	54,780	 	 	$	53,486	 	 	$	52,023	 	 	$	213,750	 	

4.	 	Hardware and other revenue includes the following items (in thousands):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Hardware revenue	 	$	3,080	 	 	$	2,992	 	 	$	5,086	 	 	$	3,474	 	 	$	14,632	 	 	$	4,518	 	 	$	5,053	 	 	$	5,763	 	 	$	4,612	 	 	$	19,946	 	
Billed travel	 	 	1,980	 	 	 	1,869	 	 	 	1,931	 	 	 	1,719	 	 	 	7,499	 	 	 	1,763	 	 	 	2,323	 	 	 	2,673	 	 	 	2,212	 	 	$	8,971	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total hardware and other revenue	 	$	5,060	 	 	$	4,861	 	 	$	7,017	 	 	$	5,193	 	 	$	22,131	 	 	$	6,281	 	 	$	7,376	 	 	$	8,436	 	 	$	6,824	 	 	$	28,917	 	

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):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	$	(2,387	)	 	$	(1,996	)	 	$	(764	)	 	$	876	 	 	$	(4,271	)	 	$	1,053	 	 	$	(72	)	 	$	(548	)	 	$	(217	)	 	$	216	 	
Costs and expenses	 	 	(3,307	)	 	 	(2,560	)	 	 	(1,286	)	 	 	1,205	 	 	 	(5,948	)	 	 	1,346	 	 	 	235	 	 	 	(262	)	 	 	(26	)	 	 	1,293	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	920	 	 	 	564	 	 	 	522	 	 	 	(329	)	 	 	1,677	 	 	 	(293	)	 	 	(307	)	 	 	(286	)	 	 	(191	)	 	 	(1,077	)	
Foreign currency gains (losses) in other income	 	 	(366	)	 	 	(506	)	 	 	294	 	 	 	(427	)	 	 	(1,005	)	 	 	(415	)	 	 	187	 	 	 	(436	)	 	 	—	 	 	 	(664	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	554	 	 	$	58	 	 	$	816	 	 	$	(756	)	 	$	672	 	 	$	(708	)	 	$	(120	)	 	$	(722	)	 	$	(191	)	 	$	(1,741	)	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
 	 	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):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	$	1,129	 	 	$	800	 	 	$	458	 	 	 	(249	)	 	$	2,138	 	 	$	(395	)	 	$	(340	)	 	$	(180	)	 	 	(181	)	 	$	(1,096	)	
Foreign currency gains (losses) in other income	 	 	336	 	 	 	(367	)	 	 	2	 	 	 	(276	)	 	 	(305	)	 	 	(289	)	 	 	246	 	 	 	(302	)	 	 	64	 	 	 	(281	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total impact of changes in the Indian Rupee	 	$	1,465	 	 	$	433	 	 	$	460	 	 	$	(525	)	 	$	1,833	 	 	$	(684	)	 	$	(94	)	 	$	(482	)	 	$	(117	)	 	$	(1,377	)	

6.	 	Other income (expense) includes the following components (in thousands):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income	 	$	137	 	 	$	95	 	 	$	71	 	 	$	65	 	 	$	368	 	 	$	80	 	 	$	109	 	 	$	252	 	 	$	195	 	 	$	636	 	
Foreign currency (losses) gains	 	 	(366	)	 	 	(506	)	 	 	294	 	 	 	(427	)	 	 	(1,005	)	 	 	(415	)	 	 	187	 	 	 	(436	)	 	 	—	 	 	 	(664	)	
Other non-operating (expense) income	 	 	(4	)	 	 	7	 	 	 	(110	)	 	 	(12	)	 	 	(119	)	 	 	(163	)	 	 	8	 	 	 	(4	)	 	 	44	 	 	 	(115	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other (expense) income	 	$	(233	)	 	$	(404	)	 	$	255	 	 	$	(374	)	 	$	(756	)	 	$	(498	)	 	$	304	 	 	$	(188	)	 	$	239	 	 	$	(143	)	

7.	 	Capital expenditures are as follows (in thousands):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	$	873	 	 	$	487	 	 	$	366	 	 	$	652	 	 	$	2,378	 	 	$	1,177	 	 	$	1,529	 	 	$	1,625	 	 	$	1,541	 	 	$	5,872	 	

8.	 	Stock Repurchase Activity	
 	 	 	
 	 	In 2010, under the share repurchase program authorized by the Board of Directors, we repurchased approximately 2.7 million shares of common stock totaling $76.5 million at an average price of $28.15. In 2009, we repurchased approximately 1.4 million shares of common stock totaling $22.8 million at an average price of $16.63.	

9.	 	Effective Tax Rate Reconciliation for GAAP and Adjusted Results (in thousands except tax rate and per share data):	

 	 	Three Months Ended December 31, 2010	 	 	Year Ended December 31, 2010	 	
 	 	Income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	before	 	 	Income tax	 	 	 	 	 	 	 	 	 	 	Effective Tax	 	 	Income before	 	 	Income tax	 	 	 	 	 	 	 	 	 	 	Effective Tax	 	
 	 	income taxes	 	 	provision	 	 	Net income	 	 	Diluted EPS	 	 	Rate	 	 	income taxes	 	 	provision	 	 	Net income	 	 	Diluted EPS	 	 	Rate	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP results before tax adjustments	 	$	9,054	 	 	$	3,202	 	 	$	5,852	 	 	$	0.26	 	 	 	35.4	%	 	$	41,784	 	 	$	14,494	 	 	$	27,290	 	 	$	1.22	 	 	 	34.7	%	
Provision to return adjustments (a)	 	 	—	 	 	 	(386	)	 	 	386	 	 	 	0.02	 	 	 	 	 	 	 	—	 	 	 	(533	)	 	 	533	 	 	 	0.02	 	 	 	 	 	
Income tax reserve adjustments (b)	 	 	—	 	 	 	(127	)	 	 	127	 	 	 	0.01	 	 	 	 	 	 	 	—	 	 	 	(29	)	 	 	29	 	 	 	—	 	 	 	 	 	
Disqualifying dispositions of incentive stock options (c)	 	 	—	 	 	 	(80	)	 	 	80	 	 	 	—	 	 	 	 	 	 	 	—	 	 	 	(209	)	 	 	209	 	 	 	0.01	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP results- reported	 	$	9,054	 	 	$	2,609	 	 	$	6,445	 	 	$	0.29	 	 	 	28.8	%	 	$	41,784	 	 	$	13,723	 	 	$	28,061	 	 	$	1.25	 	 	 	32.8	%	

Adjusted results before tax adjustments	 	$	10,353	 	 	$	3,658	 	 	$	6,695	 	 	$	0.30	 	 	 	35.3	%	 	$	46,651	 	 	$	16,182	 	 	$	30,469	 	 	$	1.36	 	 	 	34.7	%	
Provision to return adjustments (a)	 	 	—	 	 	 	(386	)	 	 	386	 	 	 	0.02	 	 	 	 	 	 	 	—	 	 	 	(533	)	 	 	533	 	 	 	0.02	 	 	 	 	 	
Income tax reserve adjustments (b)	 	 	—	 	 	 	(127	)	 	 	127	 	 	 	0.01	 	 	 	 	 	 	 	—	 	 	 	(29	)	 	 	29	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted results- reported	 	$	10,353	 	 	$	3,145	 	 	$	7,208	 	 	$	0.32	 	 	 	30.4	%	 	$	46,651	 	 	$	15,620	 	 	$	31,031	 	 	$	1.38	 	 	 	33.5	%	

(a)	 	Provision to return adjustments primarily include the true-up of the 2009 tax provision to the 2009 tax return filed in the third quarter of 2010. The majority of the adjustments relate to research and development credits.	
 	 	 	
(b)	 	Adjustments include the establishment of income tax reserves for state audits, offset by the release of U.S. federal income tax reserves that were previously expensed. The release resulted from the expiration of tax audit statues for tax returns filed for 2006 and prior.	
 	 	 	
(c)	 	The adjustment represents a tax benefit from disqualifying dispositions of incentive stock options that were previously expensed.	

10.	 	In 2011, to be consistent with other companies in the software industry, we will begin reporting adjusted results excluding all equity-based compensation. Historically, our adjusted results did not exclude restricted stock expense. See note 1 above for the other reconciling items between our GAAP and adjusted results. The impact of restricted stock expense on our GAAP and Adjusted Results is as follows (in thousands except per share amounts):	

 	 	2007	 	 	2008	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	$	38	 	 	$	40	 	 	$	42	 	 	$	42	 	 	$	162	 	 	$	81	 	 	$	79	 	 	$	84	 	 	$	81	 	 	$	325	 	
Sales and marketing	 	 	134	 	 	 	149	 	 	 	131	 	 	 	152	 	 	 	566	 	 	 	231	 	 	 	235	 	 	 	244	 	 	 	244	 	 	 	954	 	
Research and development	 	 	57	 	 	 	60	 	 	 	65	 	 	 	63	 	 	 	245	 	 	 	117	 	 	 	117	 	 	 	120	 	 	 	120	 	 	 	474	 	
General and administrative	 	 	220	 	 	 	206	 	 	 	322	 	 	 	204	 	 	 	952	 	 	 	377	 	 	 	424	 	 	 	432	 	 	 	420	 	 	 	1,653	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total restricted stock expense	 	$	449	 	 	$	455	 	 	$	560	 	 	$	461	 	 	$	1,925	 	 	$	806	 	 	$	855	 	 	$	880	 	 	$	865	 	 	$	3,406	 	
Income tax provision	 	 	159	 	 	 	162	 	 	 	199	 	 	 	163	 	 	 	683	 	 	 	280	 	 	 	297	 	 	 	306	 	 	 	301	 	 	 	1,184	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	290	 	 	$	293	 	 	$	361	 	 	$	298	 	 	$	1,242	 	 	$	526	 	 	$	558	 	 	$	574	 	 	$	564	 	 	$	2,222	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	 	$	0.01	 	 	$	0.01	 	 	$	0.01	 	 	$	0.01	 	 	$	0.05	 	 	$	0.02	 	 	$	0.02	 	 	$	0.02	 	 	$	0.02	 	 	$	0.09	 	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of services	 	$	98	 	 	$	106	 	 	$	108	 	 	$	107	 	 	$	419	 	 	$	198	 	 	$	240	 	 	$	242	 	 	$	236	 	 	$	916	 	
Sales and marketing	 	 	267	 	 	 	146	 	 	 	254	 	 	 	258	 	 	 	925	 	 	 	378	 	 	 	438	 	 	 	442	 	 	 	449	 	 	 	1,707	 	
Research and development	 	 	134	 	 	 	42	 	 	 	125	 	 	 	125	 	 	 	426	 	 	 	206	 	 	 	250	 	 	 	262	 	 	 	269	 	 	 	987	 	
General and administrative	 	 	420	 	 	 	395	 	 	 	438	 	 	 	446	 	 	 	1,699	 	 	 	625	 	 	 	673	 	 	 	821	 	 	 	899	 	 	 	3,018	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total restricted stock expense	 	$	919	 	 	$	689	 	 	$	925	 	 	$	936	 	 	$	3,469	 	 	$	1,407	 	 	$	1,601	 	 	$	1,767	 	 	$	1,853	 	 	$	6,628	 	
Income tax provision	 	 	308	 	 	 	215	 	 	 	300	 	 	 	382	 	 	 	1,205	 	 	 	485	 	 	 	553	 	 	 	609	 	 	 	652	 	 	 	2,299	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	611	 	 	$	474	 	 	$	625	 	 	$	554	 	 	$	2,264	 	 	$	922	 	 	$	1,048	 	 	$	1,158	 	 	$	1,201	 	 	$	4,329	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	 	$	0.03	 	 	$	0.02	 	 	$	0.03	 	 	$	0.02	 	 	$	0.10	 	 	$	0.04	 	 	$	0.05	 	 	$	0.05	 	 	$	0.05	 	 	$	0.19	 	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
11.	 	Total equity-based compensation from 2007-2010 is as follows (in thousands except per share amounts):	

 	 	Year ended December 31,	 	
 	 	2007	 	 	2008	 	 	2009	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stock options	 	$	4,274	 	 	$	5,458	 	 	$	5,153	 	 	$	3,792	 	
Restricted stock	 	 	1,925	 	 	 	3,406	 	 	 	3,469	 	 	 	6,628	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity-based compensation	 	 	6,199	 	 	 	8,864	 	 	 	8,622	 	 	 	10,420	 	
Income tax provision	 	 	2,200	 	 	 	3,081	 	 	 	2,996	 	 	 	3,614	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	3,999	 	 	$	5,783	 	 	$	5,626	 	 	$	6,806	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	 	$	0.15	 	 	$	0.24	 	 	$	0.25	 	 	$	0.30	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share — stock options	 	$	0.10	 	 	$	0.15	 	 	$	0.15	 	 	$	0.11	 	
Diluted earnings per share — restricted stock	 	$	0.05	 	 	$	0.09	 	 	$	0.10	 	 	$	0.19	 	

12.	 	In 2011, to be consistent with other companies in the software industry, we will begin reporting adjusted results excluding all equity-based compensation. The following provides an operating profit, operating margin and diluted adjusted EPS bridge for purposes of 2011 comparability for prospective reporting (in thousands except per share amounts):	

 	 	2009	 	 	2010	 	
 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating profit, reported	 	$	2,831	 	 	$	5,154	 	 	$	13,165	 	 	$	11,991	 	 	$	33,141	 	 	$	12,879	 	 	$	12,765	 	 	$	11,036	 	 	$	10,114	 	 	$	46,794	 	
Add: restricted stock expense	 	 	919	 	 	 	689	 	 	 	925	 	 	 	936	 	 	 	3,469	 	 	 	1,407	 	 	 	1,601	 	 	 	1,767	 	 	 	1,853	 	 	 	6,628	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating profit, 2011 comps	 	$	3,750	 	 	$	5,843	 	 	$	14,090	 	 	$	12,927	 	 	$	36,610	 	 	$	14,286	 	 	$	14,366	 	 	$	12,803	 	 	$	11,967	 	 	$	53,422	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating margin %, reported	 	 	4.7	%	 	 	8.8	%	 	 	20.2	%	 	 	19.3	%	 	 	13.4	%	 	 	17.4	%	 	 	16.4	%	 	 	14.9	%	 	 	14.1	%	 	 	15.7	%	
Restricted stock expense margin	 	 	1.5	%	 	 	1.2	%	 	 	1.4	%	 	 	1.5	%	 	 	1.4	%	 	 	1.9	%	 	 	2.1	%	 	 	2.4	%	 	 	2.6	%	 	 	2.2	%	
Adjusted operating margin %, 2011 comps *	 	 	6.2	%	 	 	10.0	%	 	 	21.6	%	 	 	20.8	%	 	 	14.8	%	 	 	19.3	%	 	 	18.5	%	 	 	17.3	%	 	 	16.7	%	 	 	18.0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income, reported	 	$	1,728	 	 	$	3,232	 	 	$	9,638	 	 	$	7,023	 	 	$	21,621	 	 	$	8,110	 	 	$	8,560	 	 	$	7,153	 	 	$	7,208	 	 	$	31,031	 	
Add: restricted stock expense, net of tax	 	 	611	 	 	 	474	 	 	 	625	 	 	 	554	 	 	 	2,264	 	 	 	922	 	 	 	1,048	 	 	 	1,158	 	 	 	1,201	 	 	 	4,329	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income, 2011 comps	 	$	2,339	 	 	$	3,706	 	 	$	10,263	 	 	$	7,577	 	 	$	23,885	 	 	$	9,032	 	 	$	9,608	 	 	$	8,311	 	 	$	8,409	 	 	$	35,360	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted diluted earnings per share, reported	 	$	0.07	 	 	$	0.14	 	 	$	0.43	 	 	$	0.31	 	 	$	0.96	 	 	$	0.36	 	 	$	0.38	 	 	$	0.32	 	 	$	0.32	 	 	$	1.38	 	
Restricted stock expense diluted earnings per share	 	$	0.03	 	 	$	0.02	 	 	$	0.03	 	 	$	0.02	 	 	$	0.10	 	 	$	0.04	 	 	$	0.05	 	 	$	0.05	 	 	$	0.05	 	 	$	0.19	 	
Adjusted diluted earnings per share, 2011 comps *	 	$	0.10	 	 	$	0.17	 	 	$	0.46	 	 	$	0.33	 	 	$	1.06	 	 	$	0.40	 	 	$	0.42	 	 	$	0.38	 	 	$	0.38	 	 	$	1.58	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted fully diluted shares (Non-GAAP)	 	 	23,058	 	 	 	22,444	 	 	 	22,175	 	 	 	22,667	 	 	 	22,558	 	 	 	22,535	 	 	 	22,776	 	 	 	22,051	 	 	 	22,350	 	 	 	22,450	 	
 	 	 	
*	 	Operating margin % and diluted earnings per share does not necessarily add due to the rounding of the individual calculations.