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):  April 20, 2017
 
MANHATTAN ASSOCIATES, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Georgia	 	0-23999	 	58-2373424	
(State or Other Jurisdiction of
Incorporation or organization)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	
 
2300 Windy Ridge Parkway, Tenth Floor, Atlanta, Georgia
30339
(Address of Principal Executive Offices)
(Zip Code)
 
(770) 955-7070
(Registrant’s telephone number, including area code)
 
NONE
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

 

 
Item 2.02  Results of Operations and Financial Condition.
 
On April 20, 2017, Manhattan Associates, Inc. (the “Company”) issued a press release providing its financial results for the three months ended March 31, 2017. 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 income tax provision, adjusted net income and adjusted diluted earnings per share, which exclude the impact of equity-based compensation and acquisition-related costs, and the related income tax effects of both. We have developed our internal reporting, compensation and planning systems using these additional financial measures.
These various measures are not in accordance with, or alternatives for, financial measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) and may be different from similarly titled non-GAAP financial measures used by other companies.  Non-GAAP financial measures should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP.
Non-GAAP measures used in the press release exclude the impact of the items described above for the following reasons:
 
 	•	Equity-based compensation expense typically does not require cash settlement by the Company. We do not include this expense and the related income tax effects when assessing our operating performance, and believe our peers also typically present non-GAAP results that exclude equity-based compensation expense.	
 
 	•	From time to time, we incur acquisition-related costs consisting primarily of (i) accounting and legal expenses, whether or not we ultimately consummate a proposed acquisition, (ii) certain unusual costs, such as employee retention benefits, resulting from pre-acquisition arrangements, and (iii) amortization of acquisition-related intangible assets.  These costs are difficult to predict and, if and when incurred, generally are not expenses associated with our core operations.  We exclude these costs and the related income tax effects from our internal assessments of our operating performance, and believe our peers also typically present non-GAAP results that exclude similar acquisition-related costs.	
We believe the reporting of adjusted operating income, adjusted income tax provision, adjusted net income and adjusted earnings per share facilitates investors’ understanding of our historical operating trends, because it provides supplemental measurement information in evaluating the operating results of our business. We also believe that adjusted operating income, adjusted income tax provision, adjusted net income and adjusted earnings per share provide a basis for comparisons to other companies in the industry and enable investors to evaluate our operating performance in a manner consistent with our internal basis of measurement.  Management refers to adjusted operating income, adjusted net income and adjusted earnings per share in making operating decisions because we believe they provide meaningful supplemental information regarding our operational performance and our ability to invest in research and development and fund acquisitions and capital expenditures. In addition, adjusted operating income,
1

 
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 April 20, 2017	

2

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
MANHATTAN ASSOCIATES, INC.

 
By:  /s/ Dennis B. Story
Dennis B. Story
Executive Vice President, Chief Financial Officer and Treasurer

 
Dated:  April 20, 2017
 
3

 
EXHIBIT INDEX
 	 	
Exhibit	 	
Number	Description	
99.1	Press Release, dated April 20, 2017	

 

Exhibit 99.1

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

Manhattan Associates Reports First Quarter 2017 Performance
 
ATLANTA – April 20, 2017 – Leading Supply Chain Commerce Solutions provider Manhattan Associates, Inc. (NASDAQ: MANH) today reported GAAP diluted earnings per share for the first quarter ended March 31, 2017 of $0.40 compared to $0.38 in Q1 2016, on record license revenue of $22.8 million and total revenue of $143.5 million. Non-GAAP adjusted diluted earnings per share was $0.42 in both Q1 2017 and Q1 2016.
“Our first quarter results reflect the balance between strong license fee performance and retail macro challenges. Q1 represents another record license quarter with solid pipeline activity in all three regions against a strong comparable. Our Professional Services business continues to experience headwinds muting solid financial performance across all other key metrics,” said Eddie Capel, president and chief executive officer of Manhattan Associates.
“We expect that retail market headwinds will persist throughout 2017 as many retailers address strategic challenges with enterprise transformation. While those transformations bring opportunities for Manhattan, they can also slow decision making.  Given the outlook, we have lowered our revenue expectations for the year while maintaining our earnings per share guidance. More importantly, we continue to be very bullish on the market opportunity ahead of us and are investing significant energy and capital into innovation and advancing the world’s leading suite of Supply Chain Commerce solutions to extend our market leadership in 2017 and beyond.”

 

FIRST QUARTER 2017 FINANCIAL SUMMARY:
 	•	GAAP diluted earnings per share was $0.40 in Q1 2017, compared to $0.38 in Q1 2016.	 	

 	•	Adjusted diluted earnings per share, a non-GAAP measure, was $0.42 in both Q1 2017 and Q1 2016.	 	

 	•	Consolidated total revenue was $143.5 million in Q1 2017, compared to $149.9 million in Q1 2016. License revenue was $22.8 million in Q1 2017, compared to $20.6 million in Q1 2016.	 	

 	•	GAAP operating income was $41.7 million in Q1 2017, compared to $43.1 million in Q1 2016.	 	

 	•	Adjusted operating income, a non-GAAP measure, was $46.3 million in Q1 2017, compared to $47.9 million in Q1 2016.	 	

 	•	Cash flow from operations was $61.3 million in Q1 2017, compared to $40.4 million in Q1 2016. Days Sales Outstanding was 53 days at March 31, 2017, compared to 63 days at December 31, 2016.	 	

 	•	Cash and investments totaled $101.3 million at March 31, 2017, compared to $95.6 million at December 31, 2016.	 	

 	•	During the three months ended March 31, 2017, the Company repurchased 1,003,868 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $50.0 million. In April 2017, the Board of Directors authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock.	 	
SALES ACHIEVEMENTS:
 	•	Recognized license revenue of $1.0 million or more on four new contracts during Q1 2017.	 	

 	•	Completed software license wins with new customers such as: Aldi South, David Jones, Esselunga, Everything But Water, Fenix Outdoor International, GER Innflutningur, PFD Food Services, Restaurant Brands International and Xiamen Tianma Micro-Electronics.	 	

 

 	•	Expanded relationships with existing customers such as: 1912, Alliance Healthcare, Belk, Carolina Logistics Services, Chico’s, Dentsply International, Essilor of America, Fasteners for Retail, Five Below, Gunze Distribution, Hayneedle, Kurt Geiger, Langham Logistics, LeSaint Logistics, Nortek, Paul Smith, Precision Planting, PT Lion Super Indo, Recreational Equipment, Redmart, Ryder Integrated Logistics, Sonae, Southern Glazer’s Wine & Spirits, Staples, Telebrands Corporation, The Container Store, The Jay Group, The Honest Company, Ulta Beauty, UPS Supply Chain, UWT Logistics and West Coast Distribution.	 	
2017 GUIDANCE
Manhattan Associates provides the following revenue and diluted earnings per share guidance for the full year 2017:
 	 	Guidance Range - 2017 Full Year	
 	($'s in millions, except EPS)	$ Range	 	 	% Growth Range	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Total revenue - current guidance	$	606	 	 	$	620	 	 	 	0%	 	 	 	3%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Total revenue - previous guidance	$	622	 	 	$	632	 	 	 	3%	 	 	 	5%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Diluted earnings per share (EPS):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	GAAP EPS - current guidance	$	1.77	 	 	$	1.81	 	 	 	3%	 	 	 	5%	 	 	
 	Equity-based compensation, net of tax	 	0.12	 	 	 	0.12	 	 	 	 	 	 	 	 	 	 	
 	Purchase amortization, net of tax	 	-	 	 	 	-	 	 	 	 	 	 	 	 	 	 	
 	Adjusted EPS(1) - current guidance	$	1.89	 	 	$	1.93	 	 	 	1%	 	 	 	3%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	GAAP EPS - previous guidance	$	1.74	 	 	$	1.78	 	 	 	1%	 	 	 	3%	 	 	
 	Equity-based compensation, net of tax	 	0.15	 	 	 	0.15	 	 	 	 	 	 	 	 	 	 	
 	Purchase amortization, net of tax	 	-	 	 	 	-	 	 	 	 	 	 	 	 	 	 	
 	Adjusted EPS(1) - previous guidance	$	1.89	 	 	$	1.93	 	 	 	1%	 	 	 	3%	 	 	

 	(1) Adjusted EPS is a Non-GAAP measure which excludes the impact of equity-based compensation	 	 	
 	    and acquisition-related costs, and the related income tax effects of both.	 	 	

Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. Those

 

statements, including the guidance provided above, do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.
Manhattan Associates will make its earnings release and published expectations available on its website (www.manh.com). Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance above, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.
CONFERENCE CALL
The Company’s conference call regarding its first quarter financial results will be held today, April 20, 2017, at 4:30 p.m. Eastern 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 85400037 or via the web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ second quarter 2017 earnings release.
GAAP VERSUS NON-GAAP PRESENTATION
The Company provides adjusted operating income, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Company’s historical and projected operating results. These measures are not in accordance with – or alternatives to – GAAP, and may be different from non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share measures used by other companies. The Company believes that the presentation of these non-GAAP financial measures facilitates investors’ ability to understand and compare the Company’s results and guidance, because the measures

 

provide supplemental information in evaluating the operating results of its business, as distinct from results that include items that are not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three months ended March 31, 2017.  
Non-GAAP adjusted operating income, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation and acquisition-related costs and the amortization thereof – all net of income tax effects. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments are included in the supplemental information attached to this release.
ABOUT MANHATTAN ASSOCIATES
Manhattan Associates is a technology leader in supply chain and omni-channel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers. 
 
Manhattan Associates designs, builds and delivers leading edge cloud and on-premise solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omni-channel marketplace. For more information, please visit www.manh.com.
 
This press release contains “forward-looking statements” relating to Manhattan Associates, Inc.  Forward-looking statements in this press release include the information set forth under “2017 Guidance.” Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: uncertainty about the global economy, delays in product development, competitive pressures, software errors, information security breaches and the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.
###

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

 	 	Three Months Ended March 31,	 	
 	 	2017	 	 	2016	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Revenue:	 	 	 	 	 	 	 	 	
Software license	 	$	22,773	 	 	$	20,607	 	
Services	 	 	108,833	 	 	 	116,263	 	
Hardware and other	 	 	11,883	 	 	 	12,990	 	
Total revenue	 	 	143,489	 	 	 	149,860	 	
Costs and expenses:	 	 	 	 	 	 	 	 	
Cost of license	 	 	2,240	 	 	 	3,152	 	
Cost of services	 	 	49,743	 	 	 	51,904	 	
Cost of hardware and other	 	 	9,638	 	 	 	9,757	 	
Research and development	 	 	14,225	 	 	 	14,706	 	
Sales and marketing	 	 	11,789	 	 	 	12,588	 	
General and administrative	 	 	11,872	 	 	 	12,448	 	
Depreciation and amortization	 	 	2,262	 	 	 	2,206	 	
Total costs and expenses	 	 	101,769	 	 	 	106,761	 	
Operating income	 	 	41,720	 	 	 	43,099	 	
Other (loss) income, net	 	 	(371	)	 	 	520	 	
Income before income taxes	 	 	41,349	 	 	 	43,619	 	
Income tax provision	 	 	13,125	 	 	 	16,139	 	
Net income	 	$	28,224	 	 	$	27,480	 	
 	 	 	 	 	 	 	 	 	
Basic earnings per share	 	$	0.40	 	 	$	0.38	 	
Diluted earnings per share	 	$	0.40	 	 	$	0.38	 	
 	 	 	 	 	 	 	 	 	
Weighted average number of shares:	 	 	 	 	 	 	 	 	
Basic	 	 	69,973	 	 	 	72,630	 	
Diluted	 	 	70,247	 	 	 	73,020	 	

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

 	 	 	Three Months Ended March 31,	 	
 	 	 	2017	 	 	2016	 	
 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	$	41,720	 	 	$	43,099	 	
Equity-based compensation (a)	 	 	 	4,472	 	 	 	4,688	 	
Purchase amortization (c)	 	 	 	107	 	 	 	107	 	
Adjusted operating income (Non-GAAP)	 	 	$	46,299	 	 	$	47,894	 	

Income tax provision	 	 	$	13,125	 	 	$	16,139	 	
Equity-based compensation (a)	 	 	 	1,632	 	 	 	1,734	 	
Tax benefit of stock awards vested (b)	 	 	 	1,968	 	 	 	-	 	
Purchase amortization (c)	 	 	 	39	 	 	 	40	 	
Adjusted income tax provision (Non-GAAP)	 	 	$	16,764	 	 	$	17,913	 	

Net income	 	 	$	28,224	 	 	$	27,480	 	
Equity-based compensation (a)	 	 	 	2,840	 	 	 	2,954	 	
Tax benefit of stock awards vested (b)	 	 	 	(1,968	)	 	 	-	 	
Purchase amortization (c)	 	 	 	68	 	 	 	67	 	
Adjusted net income (Non-GAAP)	 	 	$	29,164	 	 	$	30,501	 	

Diluted EPS	 	 	$	0.40	 	 	$	0.38	 	
Equity-based compensation (a)	 	 	 	0.04	 	 	 	0.04	 	
Tax benefit of stock awards vested (b)	 	 	 	(0.03	)	 	 	-	 	
Purchase amortization (c)	 	 	 	-	 	 	 	-	 	
Adjusted diluted EPS (Non-GAAP)	 	 	$	0.42	 	 	$	0.42	 	
 	 	 	 	 	 	 	 	 	 	
Fully diluted shares	 	 	 	70,247	 	 	 	73,020	 	

(a)	Adjusted results exclude all equity-based compensation, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof. Equity-based compensation is included in the following GAAP operating expense lines for the three months ended March 31, 2017 and 2016:	
 
 	 	 	Three Months Ended March 31,	 	
 	 	 	2017	 	 	2016	 	
 	 	 	 	 	 	 	 	 	 	
Cost of services	 	 	$	1,141	 	 	$	1,279	 	
Research and development	 	 	 	720	 	 	 	754	 	
Sales and marketing	 	 	 	667	 	 	 	685	 	
General and administrative	 	 	 	1,944	 	 	 	1,970	 	
Total equity-based compensation	 	 	$	4,472	 	 	$	4,688	 	
 
(b)	During the first quarter of 2017, we adopted Accounting Standards Update (ASU) 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, to improve the accounting for employee share-based payments. Under the new guidance, all excess tax benefits and certain tax deficiencies are recognized as income tax expense or benefit in the income statements on a prospective basis, rather than recorded in additional paid-in capital. The adjustment represents the excess tax benefits of the stock awards vested during the period. Excess tax benefits occur when the amount deductible for an award of equity instruments on our tax return is more than the cumulative compensation cost recognized	

 
 	for financial reporting purposes. As discussed above, we excluded equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry.  Therefore, we also excluded the related tax benefit generated upon their vesting.  	
 
(c)	Adjustments represent purchased intangibles amortization from prior acquisition. Such amortization is excluded from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof.	

 

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

 	 	March 31, 2017	 	 	December 31, 2016	 	
 	 	(unaudited)	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	89,208	 	 	$	95,615	 	
Short-term investments	 	 	12,051	 	 	 	-	 	
Accounts receivable, net of allowance of $3,900 and $3,595, respectively	 	 	84,076	 	 	 	100,285	 	
Prepaid expenses and other current assets	 	 	14,759	 	 	 	11,118	 	
Total current assets	 	 	200,094	 	 	 	207,018	 	
 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	16,525	 	 	 	17,424	 	
Goodwill, net	 	 	62,230	 	 	 	62,228	 	
Deferred income taxes	 	 	898	 	 	 	2,867	 	
Other assets	 	 	7,595	 	 	 	7,603	 	
Total assets	 	$	287,342	 	 	$	297,140	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	11,213	 	 	$	12,052	 	
Accrued compensation and benefits	 	 	18,866	 	 	 	20,700	 	
Accrued and other liabilities	 	 	11,929	 	 	 	12,510	 	
Deferred revenue	 	 	70,751	 	 	 	63,457	 	
Income taxes payable	 	 	17,057	 	 	 	8,924	 	
Total current liabilities	 	 	129,816	 	 	 	117,643	 	
 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	9,658	 	 	 	10,131	 	
 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2017 and 2016	 	 	-	 	 	 	-	 	
Common stock, $0.01 par value; 200,000,000 shares authorized; 69,443,299 and 70,233,955 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	 	 	694	 	 	 	702	 	
Retained earnings	 	 	161,175	 	 	 	184,558	 	
Accumulated other comprehensive loss	 	 	(14,001	)	 	 	(15,894	)	
Total shareholders' equity	 	 	147,868	 	 	 	169,366	 	
Total liabilities and shareholders' equity	 	$	287,342	 	 	$	297,140	 	

 

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

 	 	Three Months Ended March 31,	 	
 	 	2017	 	 	2016	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	28,224	 	 	$	27,480	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	2,262	 	 	 	2,206	 	
Equity-based compensation	 	 	4,472	 	 	 	4,688	 	
Loss on disposal of equipment	 	 	20	 	 	 	3	 	
Tax benefit of stock awards exercised/vested	 	 	-	 	 	 	5,023	 	
Excess tax benefits from equity-based compensation	 	 	-	 	 	 	(5,023	)	
Deferred income taxes	 	 	2,531	 	 	 	1,747	 	
Unrealized foreign currency loss (gain)	 	 	104	 	 	 	(61	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	16,553	 	 	 	13,554	 	
Other assets	 	 	(3,939	)	 	 	(228	)	
Accounts payable, accrued and other liabilities	 	 	(4,063	)	 	 	(12,186	)	
Income taxes	 	 	8,172	 	 	 	2,044	 	
Deferred revenue	 	 	6,940	 	 	 	1,179	 	
Net cash provided by operating activities	 	 	61,276	 	 	 	40,426	 	
 	 	 	 	 	 	 	 	 	
Investing activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(789	)	 	 	(1,906	)	
Net (purchases) maturities of investments	 	 	(11,630	)	 	 	1,418	 	
Net cash used in investing activities	 	 	(12,419	)	 	 	(488	)	
 	 	 	 	 	 	 	 	 	
Financing activities:	 	 	 	 	 	 	 	 	
Purchase of common stock	 	 	(56,619	)	 	 	(57,791	)	
Proceeds from issuance of common stock from options exercised	 	 	-	 	 	 	18	 	
Excess tax benefits from equity-based compensation	 	 	-	 	 	 	5,023	 	
Net cash used in financing activities	 	 	(56,619	)	 	 	(52,750	)	
 	 	 	 	 	 	 	 	 	
Foreign currency impact on cash	 	 	1,355	 	 	 	208	 	
 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	 	 	(6,407	)	 	 	(12,604	)	
Cash and cash equivalents at beginning of period	 	 	95,615	 	 	 	118,416	 	
Cash and cash equivalents at end of period	 	$	89,208	 	 	$	105,812	 	

 

 
MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION
1.	GAAP and Adjusted earnings per share by quarter are as follows:	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
GAAP Diluted EPS	 	 	$	0.38	 	 	$	0.46	 	 	$	0.47	 	 	$	0.42	 	 	$	1.72	 	 	$	0.40	 	
Adjustments to GAAP:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
   compensation	 	 	 	0.04	 	 	 	0.03	 	 	 	0.03	 	 	 	0.04	 	 	 	0.14	 	 	 	0.04	 	
Tax benefit of stock awards vested	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(0.03	)	
Purchase amortization	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Adjusted Diluted EPS	 	 	$	0.42	 	 	$	0.49	 	 	$	0.50	 	 	$	0.46	 	 	$	1.87	 	 	$	0.42	 	
Fully Diluted Shares	 	 	 	73,020	 	 	 	72,228	 	 	 	71,743	 	 	 	71,148	 	 	 	72,060	 	 	 	70,247	 	

2.	Revenues and operating income by reportable segment are as follows (in thousands):	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	 	$	128,807	 	 	$	131,018	 	 	$	130,099	 	 	$	123,660	 	 	$	513,584	 	 	$	113,115	 	
EMEA	 	 	 	15,686	 	 	 	18,185	 	 	 	15,078	 	 	 	17,333	 	 	 	66,282	 	 	 	23,360	 	
APAC	 	 	 	5,367	 	 	 	5,689	 	 	 	7,036	 	 	 	6,599	 	 	 	24,691	 	 	 	7,014	 	
 	 	 	$	149,860	 	 	$	154,892	 	 	$	152,213	 	 	$	147,592	 	 	$	604,557	 	 	$	143,489	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	 	$	37,454	 	 	$	44,126	 	 	$	46,213	 	 	$	37,154	 	 	$	164,947	 	 	$	28,713	 	
EMEA	 	 	 	4,439	 	 	 	6,854	 	 	 	4,822	 	 	 	5,945	 	 	 	22,060	 	 	 	10,754	 	
APAC	 	 	 	1,206	 	 	 	1,288	 	 	 	2,549	 	 	 	2,257	 	 	 	7,300	 	 	 	2,253	 	
 	 	 	$	43,099	 	 	$	52,268	 	 	$	53,584	 	 	$	45,356	 	 	$	194,307	 	 	$	41,720	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments (pre-tax):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity-based
   compensation	 	 	$	4,688	 	 	$	3,495	 	 	$	3,541	 	 	$	4,210	 	 	$	15,934	 	 	$	4,472	 	
Purchase amortization	 	 	 	107	 	 	 	108	 	 	 	107	 	 	 	108	 	 	 	430	 	 	 	107	 	
 	 	 	$	4,795	 	 	$	3,603	 	 	$	3,648	 	 	$	4,318	 	 	$	16,364	 	 	$	4,579	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted non-GAAP
   Operating Income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	 	$	42,249	 	 	$	47,729	 	 	$	49,861	 	 	$	41,472	 	 	$	181,311	 	 	$	33,292	 	
EMEA	 	 	 	4,439	 	 	 	6,854	 	 	 	4,822	 	 	 	5,945	 	 	 	22,060	 	 	 	10,754	 	
APAC	 	 	 	1,206	 	 	 	1,288	 	 	 	2,549	 	 	 	2,257	 	 	 	7,300	 	 	 	2,253	 	
 	 	 	$	47,894	 	 	$	55,871	 	 	$	57,232	 	 	$	49,674	 	 	$	210,671	 	 	$	46,299	 	

 

 
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):	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Professional services	 	 	$	84,506	 	 	$	86,992	 	 	$	84,843	 	 	$	77,097	 	 	$	333,438	 	 	$	75,457	 	
Customer support and
   software enhancements	 	 	 	31,757	 	 	 	32,841	 	 	 	34,424	 	 	 	34,826	 	 	 	133,848	 	 	 	33,376	 	
Total services revenue	 	 	$	116,263	 	 	$	119,833	 	 	$	119,267	 	 	$	111,923	 	 	$	467,286	 	 	$	108,833	 	
 
4.	Hardware and other revenue includes the following items (in thousands):	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Hardware revenue	 	 	$	8,761	 	 	$	9,554	 	 	$	6,543	 	 	$	9,070	 	 	$	33,928	 	 	$	7,559	 	
Billed travel	 	 	 	4,229	 	 	 	4,874	 	 	 	4,770	 	 	 	4,474	 	 	 	18,347	 	 	 	4,324	 	
Total hardware and
   other revenue	 	 	$	12,990	 	 	$	14,428	 	 	$	11,313	 	 	$	13,544	 	 	$	52,275	 	 	$	11,883	 	

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):
  	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Revenue	 	 	$	(810	)	 	$	(474	)	 	$	(784	)	 	$	(1,425	)	 	$	(3,493	)	 	$	(1,547	)	
Costs and expenses	 	 	 	(1,292	)	 	 	(702	)	 	 	(782	)	 	 	(1,028	)	 	 	(3,804	)	 	 	(789	)	
Operating income	 	 	 	482	 	 	 	228	 	 	 	(2	)	 	 	(397	)	 	 	311	 	 	 	(758	)	
Foreign currency gains
   (losses) in other income	 	 	 	165	 	 	 	331	 	 	 	(72	)	 	 	211	 	 	 	635	 	 	 	(646	)	
 	 	 	$	647	 	 	$	559	 	 	$	(74	)	 	$	(186	)	 	$	946	 	 	$	(1,404	)	
 
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):
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Operating income	 	 	$	682	 	 	$	459	 	 	$	259	 	 	$	159	 	 	$	1,559	 	 	$	(70	)	
Foreign currency (losses)
   gains in other income	 	 	 	(109	)	 	 	212	 	 	 	(44	)	 	 	159	 	 	 	218	 	 	 	(320	)	
Total impact of changes
   in the Indian Rupee	 	 	$	573	 	 	$	671	 	 	$	215	 	 	$	318	 	 	$	1,777	 	 	$	(390	)	
 
6.	Other income includes the following components (in thousands):	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Interest income	 	 	$	335	 	 	$	329	 	 	$	281	 	 	$	216	 	 	$	1,161	 	 	$	293	 	
Foreign currency gains
   (losses)	 	 	 	165	 	 	 	331	 	 	 	(72	)	 	 	211	 	 	 	635	 	 	 	(646	)	
Other non-operating
   income (expense)	 	 	 	20	 	 	 	(6	)	 	 	1	 	 	 	(11	)	 	 	4	 	 	 	(18	)	
Total other income (loss)	 	 	$	520	 	 	$	654	 	 	$	210	 	 	$	416	 	 	$	1,800	 	 	$	(371	)	

 
7.Capital expenditures are as follows (in thousands):
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Capital expenditures	 	 	$	1,906	 	 	$	2,201	 	 	$	1,358	 	 	$	1,378	 	 	$	6,843	 	 	$	789	 	

8.	Stock Repurchase Activity (in thousands):	
 
 	 	 	2016	 	 	2017	 	
 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Full Year	 	 	1st Qtr	 	
Shares purchased under
   publicly-announced
   buy-back program	 	 	892	 	 	 	552	 	 	 	420	 	 	 	957	 	 	 	2,821	 	 	 	1,004	 	
Shares withheld for taxes
   due upon vesting of
   restricted stock	 	 	163	 	 	 	-	 	 	 	3	 	 	 	1	 	 	 	167	 	 	 	131	 	
Total shares purchased	 	 	 	1,055	 	 	 	552	 	 	 	423	 	 	 	958	 	 	 	2,988	 	 	 	1,135	 	
Total cash paid for shares
   purchased under
   publicly-announced
   buy-back program	 	$	48,499	 	 	$	34,995	 	 	$	24,998	 	 	$	49,901	 	 	$	158,393	 	 	$	49,978	 	
Total cash paid for shares
   withheld for taxes due
   upon vesting of restricted
   stock	 	 	9,292	 	 	 	26	 	 	 	158	 	 	 	64	 	 	 	9,540	 	 	 	6,641	 	
Total cash paid for shares
   repurchased	 	 	$	57,791	 	 	$	35,021	 	 	$	25,156	 	 	$	49,965	 	 	$	167,933	 	 	$	56,619	 	
 
9.	As mentioned in footnote b to the reconciliation of selected GAAP to Non-GAAP Measures, during the first quarter of 2017, we adopted ASU 2016-09 Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. Had we adopted the guidance during the first quarter of 2016, the cash provided by operating activities and cash used in financing activities for the three months ended March 31, 2016 as compared to March 31, 2017 would have been as follows:	
 
 	 	 	2016	 	 	2017	 	 	 	 	 	 	 	 	 	
 	 	 	1st Qtr	 	 	1st Qtr	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities, as stated	 	 	$	40,426	 	 	$	61,276	 	 	 	 	 	 	 	 	 	
Add: excess tax benefit from equity-based
      compensation	 	5,023	 	 	 	-	 	 	 	 	 	 	 	 	 	
Revised net cash provided by operating activities	 	 	$	45,449	 	 	$	61,276	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in financing activities, as stated	 	 	$	(52,750	)	 	$	(56,619	)	 	 	 	 	 	 	 	 	
Less: excess tax benefit from equity-based
      compensation	 	(5,023	)	 	 	-	 	 	 	 	 	 	 	 	 	
Revised net cash used in financing activities	 	 	$	(57,773	)	 	$	(56,619	)