ATLANTA, April 19, 2016 (GLOBE NEWSWIRE) -- Leading Supply Chain Commerce Solutions provider Manhattan Associates, Inc. (NASDAQ:MANH) today reported record non-GAAP adjusted diluted earnings per share for the first quarter ended March 31, 2016, of $0.42 compared to $0.34 in Q1 2015, on license revenue of $20.6 million and record total revenue of $149.9 million. GAAP diluted earnings per share for Q1 2016 was a record $0.38 compared to $0.31 in Q1 2015.

“We’re very pleased with our start to 2016. In this first quarter, we posted record financial results and our competitive win rates remain strong as our associates continue to execute very well serving our customers,” said Eddie Capel, Manhattan Associates President and CEO. “Our investments in omni-channel, retail store and distribution management solutions continue to drive growth and extend our market leadership position in a subdued world economy. We believe we are well positioned for a solid year in 2016 and beyond.”

FIRST QUARTER 2016 FINANCIAL SUMMARY:

  • Adjusted diluted earnings per share, a non-GAAP measure, was $0.42 in Q1 2016, compared to $0.34 in Q1 2015.
  • GAAP diluted earnings per share was $0.38 in Q1 2016, compared to $0.31 in Q1 2015.
  • Consolidated total revenue was $149.9 million in Q1 2016, compared to $133.5 million in Q1 2015. License revenue was $20.6 million in Q1 2016, compared to $19.3 million in Q1 2015.
  • Adjusted operating income, a non-GAAP measure, was $47.9 million in Q1 2016, compared to $40.0 million in Q1 2015.
  • GAAP operating income was $43.1 million in Q1 2016, compared to $36.9 million in Q1 2015.
  • Cash flow from operations was $40.4 million in Q1 2016, compared to $15.2 million in Q1 2015. Days Sales Outstanding was 51 days at March 31, 2016, compared to 63 days at December 31, 2015.
  • Cash and investments totaled $114.7 million at March 31, 2016, compared to $128.8 million at December 31, 2015.
  • During the three months ended March 31, 2016, the Company repurchased 892,283 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $48.5 million. In April 2016, the Board of Directors approved raising the Company's share repurchase authority to an aggregate of $50.0 million of the Company’s outstanding common stock.

SALES ACHIEVEMENTS:

  • Recognized license revenue of $1.0 million or more on three new contracts during Q1 2016.
  • Completed software license wins with new customers such as: aCommerce, Amrod, Bedrosians Tile & Stone, Central Garden & Pet Company, Levi Strauss & Co, Tokyo Chemical Industry, and Van Marcke Group.
  • Expanded relationships with existing customers such as: Ascena Retail Group, Batory Foods, Carhartt, Country Road Group, Express, Fashion Biz, Floor and Decor Outlets of America, Genesco, Hy-Vee, Itochu Logistics, J. Knipper and Company, lululemon athletica, Mercury Marine, Michael Kors Europe, Mothercare, Norix Group, Pitt-Ohio, REI, Samson, Santens, Sketchers USA, The Hillman Group, Under Armour, VF Services, Wineworks, and Winning Appliances. 

 

2016 GUIDANCE

Manhattan Associates provides the following revenue and diluted earnings per share guidance for the full year 2016:

    Guidance Range - 2016 Full Year
 ($'s in millions, except EPS)$ Range % Growth Range
           
 Total revenue - current guidance$615   $620    10.5%  11.5%
           
 Total revenue - previous guidance $609  $615   9.5%  10.5%
           
Diluted earnings per share (EPS):       
 Adjusted EPS(1) - current guidance$1.73  $1.76   14%  16%
 GAAP EPS - current guidance$1.58  $1.61   13%  15%
           
 Adjusted EPS(1) - previous guidance$1.69  $1.72   11%  13%
 GAAP EPS - previous guidance$1.55  $1.58   11%  13%
           
 (1) Adjusted EPS is a Non-GAAP measure which excludes the impact of equity-based compensation  

 

Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. Those statements, including the guidance provided above, do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

Manhattan Associates will make its earnings release and published expectations available on its website (www.manh.com). Beginning the close of business on June 15, 2016, 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 2016 Guidance section as being Manhattan Associates’ current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. During the Quiet Period, previously published expectations should be considered historical only, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until publication of Manhattan Associates’ next quarterly earnings release, currently scheduled for the third full week of July 2016.

CONFERENCE CALL

The Company’s conference call regarding its first quarter financial results will be held today, April 19, 2016, at 4:30 p.m. Eastern Daylight Time. Investors are invited to listen to a live webcast of the conference call through the investor relations section of Manhattan Associates' website at www.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software.

For those who cannot listen to the live broadcast, a replay can be accessed shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 77743347 or via the web www.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ second quarter 2016 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Company’s operating results. These measures are not in accordance with – or 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 important supplemental information in evaluating the operating results of its business, as distinct from results that include items that are not indicative of ongoing operating results, and because the Company’s competitors and peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three months ended March 31, 2016. 

Non-GAAP adjusted operating income, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation and acquisition-related costs and the amortization thereof – all net of income tax effects. Reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments are included in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES

Manhattan Associates makes commerce-ready supply chains that bring all points of commerce together so you’re ready to sell and ready to execute. Across the store, through your network or from your fulfillment center, we design, build and deliver market-leading solutions that support both top-line growth and bottom-line profitability. By converging front-end sales with back-end supply chain execution, our software, platform technology and unmatched experience help our customers get commerce ready—and ready to reap the rewards of the omni-channel marketplace. For more information, please visit www.manh.com.

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc.  Forward-looking statements in this press release include the information set forth under “2016 Guidance.” Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: uncertainty about the global economy, delays in product development, competitive pressures, software errors, information security breaches and the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. 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, 
  2016  2015 
  (unaudited)  (unaudited) 
Revenue:        
Software license $20,607  $19,314 
Services  116,263   101,203 
Hardware and other  12,990   13,006 
Total revenue  149,860   133,523 
Costs and expenses:        
Cost of license  3,152   2,906 
Cost of services  51,904   44,784 
Cost of hardware and other  9,757   10,547 
Research and development  14,706   13,556 
Sales and marketing  12,588   11,847 
General and administrative  12,448   11,238 
Depreciation and amortization  2,206   1,781 
Total costs and expenses  106,761   96,659 
Operating income  43,099   36,864 
Other income, net  520   262 
Income before income taxes  43,619   37,126 
Income tax provision  16,139   13,922 
Net income $27,480  $23,204 
         
Basic earnings per share $0.38  $0.31 
Diluted earnings per share $0.38  $0.31 
         
Weighted average number of shares:        
Basic  72,630   73,979 
Diluted  73,020   74,607 



MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Reconciliation of Selected GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
 
   Three Months Ended March 31, 
   2016  2015 
          
Operating income  $43,099  $36,864 
Equity-based compensation (a)   4,688   3,078 
Purchase amortization (b)   107   106 
Adjusted operating income (Non-GAAP)  $47,894  $40,048 
          
          
Income tax provision  $16,139  $13,922 
Equity-based compensation (a)   1,734   1,154 
Purchase amortization (b)   40   40 
Adjusted income tax provision (Non-GAAP)  $17,913  $15,116 
          
          
Net income  $27,480  $23,204 
Equity-based compensation (a)   2,954   1,924 
Purchase amortization (b)   67   66 
Adjusted net income (Non-GAAP)  $30,501  $25,194 
          
          
Diluted EPS  $0.38  $0.31 
Equity-based compensation (a)   0.04   0.03 
Purchase amortization (b)   -   - 
Adjusted diluted EPS (Non-GAAP)  $0.42  $0.34 
          
Fully diluted shares   73,020   74,607 


(a)     Adjusted results exclude all equity-based compensation, to facilitate comparison with our competitors and peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof. Equity-based compensation is included in the following GAAP operating expense lines for the three months ended March 31, 2016 and 2015:

   Three Months Ended March 31, 
   2016  2015 
          
Cost of services  $1,279  $791 
Research and development   754   464 
Sales and marketing   685   391 
General and administrative   1,970   1,432 
Total equity-based compensation  $4,688  $3,078 


(b)     Adjustments represent purchased intangibles amortization from prior acquisition. Such amortization is excluded from adjusted results to facilitate comparison with our competitors and peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof.


MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
 
  March 31, 2016  December 31, 2015 
  (unaudited)     
ASSETS        
Current Assets:        
Cash and cash equivalents $105,812  $118,416 
Short-term investments  8,909   10,344 
Accounts receivable, net of allowance of $5,999 and $7,031, respectively  84,119   97,379 
Prepaid expenses and other current assets  11,365   10,772 
Total current assets  210,205   236,911 
         
Property and equipment, net  20,992   21,176 
Goodwill, net  62,239   62,233 
Deferred income taxes  2,915   4,648 
Other assets  6,821   7,275 
Total assets $303,172  $332,243 
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:        
Accounts payable $10,111  $11,219 
Accrued compensation and benefits  20,424   29,284 
Accrued and other liabilities  12,271   13,853 
Deferred revenue  70,201   68,757 
Income taxes payable  6,110   4,072 
Total current liabilities  119,117   127,185 
         
Other non-current liabilities  9,089   9,566 
         
Shareholders' equity:        
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2016 and 2015  -   - 
Common stock, $0.01 par value; 200,000,000 shares authorized; 72,136,663 and 72,766,383 shares issued and
outstanding at March 31, 2016 and December 31, 2015, respectively
  721   728 
Retained earnings  186,496   207,070 
Accumulated other comprehensive loss  (12,251)  (12,306)
Total shareholders' equity  174,966   195,492 
Total liabilities and shareholders' equity $303,172  $332,243 



MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
 
  Three Months Ended March 31,
   2016   2015 
  (unaudited) (unaudited)
Operating activities:    
Net income $  27,480  $  23,204 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  2,206   1,781 
Equity-based compensation  4,688   3,078 
Loss (Gain) on disposal of equipment  3   (7)
Tax benefit of stock awards exercised/vested  5,023   6,601 
Excess tax benefits from equity-based compensation  (5,023)  (6,579)
Deferred income taxes  1,747   1,730 
Unrealized foreign currency gain  (61)  (97)
Changes in operating assets and liabilities:    
      Accounts receivable, net  13,554   2,440 
      Other assets  (228)  (2,024)
      Accounts payable, accrued and other liabilities  (12,186)  (13,489)
      Income taxes  2,044   (1,119)
      Deferred revenue  1,179   (344)
Net cash provided by operating activities  40,426   15,175 
     
Investing activities:    
Purchase of property and equipment  (1,906)  (3,098)
Net maturities (purchases) of investments  1,418   (1,279)
Net cash used in investing activities  (488)  (4,377)
     
Financing activities:    
Purchase of common stock  (57,791)  (36,033)
Proceeds from issuance of common stock from options exercised  18   278 
Excess tax benefits from equity-based compensation  5,023   6,579 
Net cash used in financing activities  (52,750)  (29,176)
     
Foreign currency impact on cash  208   (241)
     
Net change in cash and cash equivalents  (12,604)  (18,619)
Cash and cash equivalents at beginning of period  118,416   115,708 
Cash and cash equivalents at end of period $  105,812  $  97,089 



MANHATTAN ASSOCIATES, INC.
SUPPLEMENTAL INFORMATION

1.    GAAP and Adjusted earnings per share by quarter are as follows:

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
GAAP Diluted EPS  $0.31  $0.35  $0.38  $0.36  $1.40  $0.38 
Adjustments to GAAP:                         
Equity-based
  compensation
   0.03   0.02   0.05   0.03   0.12   0.04 
Purchase amortization   -   -   -   -   -   - 
Adjusted Diluted EPS  $0.34  $0.37  $0.42  $0.39  $1.52  $0.42 
Fully Diluted Shares   74,607   74,126   73,761   73,555   74,038   73,020 


2.    Revenues and operating income by reportable segment are as follows (in thousands):

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Revenue:                         
Americas  $109,959  $117,154  $120,118  $117,245  $464,476  $128,807 
EMEA   18,305   17,175   16,829   17,767   70,076   15,686 
APAC   5,259   4,780   5,357   6,423   21,819   5,367 
   $133,523  $139,109  $142,304  $141,435  $556,371  $149,860 
                          
GAAP Operating Income:                         
Americas  $30,182  $36,214  $36,407  $31,020  $133,823  $37,454 
EMEA   5,522   4,516   5,909   6,363   22,310   4,439 
APAC   1,160   644   1,364   2,145   5,313   1,206 
   $36,864  $41,374  $43,680  $39,528  $161,446  $43,099 
                          
Adjustments (pre-tax):                         
Americas:                         
Equity-based
  compensation
  $3,078  $2,661  $5,348  $3,441  $14,528  $4,688 
Purchase amortization   106   106   113   107   432   107 
   $3,184  $2,767  $5,461  $3,548  $14,960  $4,795 
                          
Adjusted non-GAAP
  Operating Income:
                         
Americas  $33,366  $38,981  $41,868  $34,568  $148,783  $42,249 
EMEA   5,522   4,516   5,909   6,363   22,310   4,439 
APAC   1,160   644   1,364   2,145   5,313   1,206 
   $40,048  $44,141  $49,141  $43,076  $176,406  $47,894 
                          

3.    Our services revenue consists of fees generated from professional services and customer support and software enhancements related to our software products as follows (in thousands):

    2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Professional services  $72,659  $76,548  $80,994  $74,423  $304,624  $84,506 
Customer support and
   software enhancements
   28,544   30,796   31,555   32,559   123,454   31,757 
Total services revenue  $101,203  $107,344  $112,549  $106,982  $428,078  $116,263 


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

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Hardware revenue  $7,730  $7,080  $5,462  $9,243  $29,515  $8,761 
Billed travel   5,276   4,927   5,163   4,797   20,163   4,229 
Total hardware and
  other revenue
  $13,006  $12,007  $10,625  $14,040  $49,678  $12,990 


5.    Impact of Currency Fluctuation

The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Revenue  $(3,426) $(3,599) $(3,421) $(2,263) $(12,709) $(810)
Costs and expenses   (2,546)  (3,201)  (2,820)  (2,058)  (10,625)  (1,292)
Operating income   (880)  (398)  (601)  (205)  (2,084)  482 
Foreign currency (losses)
  gains in other income
   (86)  (4)  213   (199)  (76)  165 
   $(966) $(402) $(388) $(404) $(2,160) $647 


Manhattan Associates has a large research and development center in Bangalore, India.  The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Operating income  $72  $468  $571  $492  $1,603  $682 
Foreign currency gains
  (losses) in other income
   45   182   423   2   652   (109)
Total impact of changes
  in the Indian Rupee
  $117  $650  $994  $494  $2,255  $573 


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

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Interest income  $324  $335  $336  $336  $1,331  $335 
Foreign currency (losses)
  gains
   (86)  (4)  213   (199)  (76)  165 
Other non-operating
  income (expense)
   24   28   55   33   140   20 
Total other income (loss)  $262  $359  $604  $170  $1,395  $520 


7.    Total equity-based compensation is as follows (in thousands except per share amounts):

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Total equity-based
  compensation -restricted stock
  $3,078  $2,661  $5,348  $3,441  $14,528  $4,688 
Income tax provision   1,154   1,004   2,011   1,216   5,385   1,734 
Net income  $1,924  $1,657  $3,337  $2,225  $9,143  $2,954 
Diluted earnings per
  share - restricted stock
  $0.03  $0.02  $0.05  $0.03  $0.12  $0.04 


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

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Capital expenditures  $3,098  $2,671  $3,850  $1,873  $11,492  $1,906 


9.    Stock Repurchase Activity (in thousands):

   2015  2016 
   1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Full Year  1st Qtr 
Shares purchased under
  publicly-announced
  buy-back program
  524   458   399   340   1,721   892 
Shares withheld for taxes
  due upon vesting of
  restricted stock
  212   2   9   3   226   163 
Total shares purchased   736   460   408   343   1,947   1,055 
Total cash paid for shares
  purchased under
  publicly-announced
  buy-back program
 $26,306  $25,214  $25,001  $25,078  $101,599  $48,499 
Total cash paid for shares
  withheld for taxes due
  upon vesting of restricted
  stock
  9,727   83   508   221   10,539   9,292 
Total cash paid for shares
  repurchased
  $36,033  $25,297  $25,509  $25,299  $112,138  $57,791 

 

Contact:
Dennis Story
Chief Financial Officer
Manhattan Associates, Inc.
770-955-7070
dstory@manh.com

Beverly McDonald
Senior Director, Corporate Marketing
Manhattan Associates, Inc.
678-597-6528
bmcdonald@manh.com