10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-23999

MANHATTAN ASSOCIATES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Georgia	58-2373424
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2300 Windy Ridge Parkway, Tenth Floor Atlanta, Georgia	30339
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 955-7070

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the Registrant’s class of capital stock outstanding as of April 26, 2013, the latest practicable date, is as follows: 19,462,458 shares of common stock, $0.01 par value per share.

MANHATTAN ASSOCIATES, INC.

FORM 10-Q

Quarter Ended March 31, 2013

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012	3
Condensed Consolidated Statements of Income for the three months ended March  31, 2013 and 2012 (unaudited)	4
Condensed Consolidated Statements of Comprehensive Income for the three months ended March  31, 2013 and 2012 (unaudited)	5
Condensed Consolidated Statements of Cash Flows for the three months ended March  31, 2013 and 2012 (unaudited)	6
Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	21
PART II OTHER INFORMATION
Item 1. Legal Proceedings	21
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	23
Signatures	24

2

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

	March 31, 2013			December 31, 2012
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	101,093		$	96,737
Short term investments		7,452			6,310
Accounts receivable, net of allowance of $5,207 and $6,235 in 2013 and 2012, respectively		59,587			62,102
Deferred income taxes		7,798			7,787
Prepaid expenses and other current assets		9,291			8,571
Total current assets		185,221			181,507
Property and equipment, net		14,749			15,650
Goodwill, net		62,259			62,265
Deferred income taxes		717			732
Other assets		1,595			1,659
Total assets	$	264,541		$	261,813
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,722		$	10,229
Accrued compensation and benefits		14,561			16,720
Accrued and other liabilities		11,262			12,233
Deferred revenue		57,932			47,935
Income taxes payable		—			4,024
Total current liabilities		90,477			91,141
Other non-current liabilities		11,018			9,163
Shareholders’ equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2013 or 2012		—			—
Common stock, $.01 par value; 100,000,000 shares authorized; 19,471,417 and 19,620,967 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively		195			196
Retained earnings		167,634			166,016
Accumulated other comprehensive loss		(4,783	)		(4,703	)
Total shareholders’ equity		163,046			161,509
Total liabilities and shareholders’ equity	$	264,541		$	261,813

See accompanying Notes to Condensed Consolidated Financial Statements.

3

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

	Three Months Ended March 31,
	2013		2012
	(unaudited)
Revenue:
Software license	$	14,245	$	15,587
Services		74,887		70,370
Hardware and other		7,469		5,524
Total revenue		96,601		91,481
Costs and expenses:
Cost of license		1,778		1,777
Cost of services		35,046		31,710
Cost of hardware and other		6,214		4,448
Research and development		11,476		11,551
Sales and marketing		11,434		12,403
General and administrative		9,508		10,308
Depreciation and amortization		1,484		1,344
Total costs and expenses		76,940		73,541
Operating income		19,661		17,940
Other income (loss), net		151		(124	)
Income before income taxes		19,812		17,816
Income tax provision		6,457		6,414
Net income	$	13,355	$	11,402
Basic earnings per share	$	0.69	$	0.57
Diluted earnings per share	$	0.68	$	0.55
Weighted average number of shares:
Basic		19,327		19,904
Diluted		19,685		20,637

See accompanying Notes to Condensed Consolidated Financial Statements.

4

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

	Three Months Ended March 31,
	2013			2012
	(unaudited)
Net income	$	13,355		$	11,402
Foreign currency translation adjustment		(80	)		1,088
Comprehensive income	$	13,275		$	12,490

See accompanying Notes to Condensed Consolidated Financial Statements.

5

Item 1. Financial Statements (continued)

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended March 31,
	2013			2012
	(unaudited)
Operating activities:
Net income	$	13,355		$	11,402
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,484			1,344
Equity-based compensation		1,907			1,660
Loss on disposal of equipment		1			—
Tax benefit of stock awards exercised/vested		4,206			4,491
Excess tax benefits from equity-based compensation		(4,163	)		(3,634	)
Deferred income taxes		1,682			2,564
Unrealized foreign currency (gain) loss		(75	)		172
Changes in operating assets and liabilities:
Accounts receivable, net		2,255			(627	)
Other assets		(594	)		(292	)
Accounts payable, accrued and other liabilities		(6,652	)		(5,517	)
Income taxes		(3,720	)		(832	)
Deferred revenue		10,414			2,328
Net cash provided by operating activities		20,100			13,059
Investing activities:
Purchase of property and equipment		(598	)		(1,796	)
Net (purchases) maturities of investments		(1,115	)		2,106
Net cash (used in) provided by investing activities		(1,713	)		310
Financing activities:
Purchase of common stock		(20,474	)		(33,487	)
Proceeds from issuance of common stock from options exercised		2,623			16,108
Excess tax benefits from equity-based compensation		4,163			3,634
Net cash used in financing activities		(13,688	)		(13,745	)
Foreign currency impact on cash		(343	)		473
Net change in cash and cash equivalents		4,356			97
Cash and cash equivalents at beginning of period		96,737			92,180
Cash and cash equivalents at end of period	$	101,093		$	92,277

See accompanying Notes to Condensed Consolidated Financial Statements.

6

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013

(Unaudited)

1. Basis of Presentation and Principles of Consolidation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at March 31, 2013, the results of operations for the three months ended March 31, 2013 and 2012, and cash flows for the three months ended March 31, 2013 and 2012. The results for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

2. Revenue Recognition

The Company’s revenue consists of fees from the licensing and hosting of software (collectively included in “Software license” revenue in the Condensed Consolidated Statements of Income), fees from implementation and training services (collectively, “professional services”) and customer support services and software enhancements (collectively included in “Services” revenue in the Condensed Consolidated Statements of Income), and sales of hardware and other revenue, which consists of reimbursements of out-of-pocket expenses incurred in connection with professional services rendered (collectively included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income). All revenue is recognized net of any related sales taxes.

The Company recognizes license revenue when the following criteria are met: (1) a signed contract is obtained covering all elements of the arrangement, (2) delivery of the product has occurred, (3) the license fee is fixed or determinable, and (4) collection is probable. Revenue recognition for software with multiple-element arrangements requires recognition of revenue using the “residual method” when (a) there is vendor-specific objective evidence (VSOE) of the fair values of all undelivered elements in a multiple-element arrangement that is not accounted for using long-term contract accounting, (b) VSOE of fair value does not exist for one or more of the delivered elements in the arrangement, and (c) all other applicable revenue-recognition criteria for software revenue recognition, are satisfied. For those contracts that contain significant customization or modifications, license revenue is recognized using contract accounting.

The Company allocates revenue to customer support services and software enhancements and any other undelivered elements of the arrangement based on VSOE of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria have been met. The balance of the revenue, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If the Company cannot objectively determine the fair value of each undelivered element based on the VSOE of fair value, the Company defers revenue recognition until all elements are delivered, all services have been performed, or until fair value can be objectively determined. The Company must apply judgment in determining all elements of the arrangement and in determining the VSOE of fair value for each element, considering the price charged for each product on a stand-alone basis or applicable renewal rates. For arrangements that include future software functionality deliverables, the Company accounts for these deliverables as a separate element of the arrangement. Because the Company does not sell these deliverables on a standalone basis, the Company is not able to establish VSOE of fair value of these deliverables. As a result, the Company defers all revenue under the arrangement until the future functionality has been delivered to the customer.

7

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2013

(Unaudited)

Payment terms for the Company’s software licenses vary. Each contract is evaluated individually to determine whether the fees in the contract are fixed or determinable and whether collectibility is probable. Judgment is required in assessing the probability of collection, which is generally based on evaluation of customer-specific information, historical collection experience, and economic market conditions. If market conditions decline, or if the financial conditions of customers deteriorate, the Company may be unable to determine that collectibility is probable, and the Company could be required to defer the recognition of revenue until the Company receives customer payments. The Company has an established history of collecting under the terms of its software license contracts without providing refunds or concessions to its customers. Therefore, the Company has determined that the presence of payment terms that extend beyond contract execution in a particular contract do not preclude the conclusion that the fees in the contract are fixed or determinable. Although infrequent, when payment terms in a contract extend beyond twelve months, the Company has determined that such fees are not fixed or determinable and recognizes revenue as payments become due provided that all other conditions for revenue recognition have been met.

The Company’s services revenue consists of fees generated from professional services and customer support and software enhancements related to the Company’s software products. Professional services include system planning, design, configuration, testing and other software implementation support and are not typically essential to the functionality of our software. Fees from professional services performed by the Company are separately priced and are generally billed on an hourly basis, and revenue is recognized as the services are performed. In certain situations, professional services are rendered under agreements in which billings are limited to contractual maximums or based upon a fixed-fee for portions of or all of the engagement. Revenue related to fixed-fee based contracts is recognized on a proportional performance basis based on the hours incurred on discrete projects within an overall services arrangement. The Company has determined that output measures, or services delivered, approximate the input measures associated with fixed-fee services arrangements. Project losses are provided for in their entirety in the period in which they become known. Revenue related to customer support services and software enhancements is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months.

Hardware and other revenue is generated from the resale of a variety of hardware products, developed and manufactured by third parties, that are integrated with and complementary to the Company’s software solutions. As part of a complete solution, the Company’s customers periodically purchase hardware from the Company for use with the software licenses purchased from the Company. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. Hardware revenue is recognized upon shipment to the customer when title passes. The Company generally purchases hardware from the Company’s vendors only after receiving an order from a customer. As a result, the Company generally does not maintain hardware inventory.

In accordance with the other presentation matters within the Revenue Recognition Topic of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, the Company recognizes amounts associated with reimbursements from customers for out-of-pocket expenses as revenue. Such amounts have been included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income. The total amount of expense reimbursement recorded to revenue was $3.3 million and $2.5 million for the three months ended March 31, 2013 and 2012, respectively.

3. Fair Value Measurement

The Company measures its investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:

• Level 1–Quoted prices in active markets for identical instruments.

• Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

8

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2013

(Unaudited)

The Company’s investments are categorized as available-for-sale securities and recorded at fair market value. Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.

At March 31, 2013, the Company’s cash, cash equivalents, and short-term investments balances were $58.2 million, $42.9 million, and $7.5 million, respectively. The Company currently has no long-term investments. Cash equivalents consist of highly liquid money market funds and certificates of deposit. Short-term investments consist of certificates of deposit. The Company uses quoted prices from active markets that are classified at Level 1 as a highest level observable input in the disclosure hierarchy framework for all available-for-sale securities. At March 31, 2013 and December 31, 2012, the Company had $33.3 million and $35.2 million in money market funds, respectively, which are classified as Level 1 and are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company has no investments classified as Level 2 or Level 3.

4. Equity-Based Compensation

In January 2012, in order to simplify equity grant administration, the Company changed its practice of granting restricted stock in favor of granting restricted stock units, or RSUs, which convert to the Company’s common stock upon vesting. There is no material difference between the grant of restricted stock and the grant of RSUs to either the Company or the recipients receiving the grants; however, in contrast to the granting of restricted stock, no stock will actually be issued under the granting of RSUs until the units vest. The Company does not currently grant stock options.

As previously reported, on December 31, 2012, Mr. Peter F. Sinisgalli stepped down from the role of Chief Executive Officer of the Company and became a non-employee member of the Board of Directors. In March 2013, the Board of Directors, upon the recommendation of the Compensation Committee in recognition of Mr. Sinisgalli’s successful tenure as Chief Executive Officer and the superior performance of the Company under his leadership, approved the vesting of a portion of the equity incentives granted to him during his employment as Chief Executive Officer that were scheduled to vest during the first quarter of 2013. These previously granted incentives included options to acquire 3,750 shares at an exercise price of $15.53 per share and 10,597 shares of restricted stock and RSUs. The Board’s action preserved 22% of Mr. Sinisgalli’s non-vested employee equity value in recognition of his services and contribution, with the remaining 78% forfeited.

The Company recorded equity-based compensation related to stock options granted in prior years of $0.1 million during the three months ended March 31, 2013 and 2012.

A summary of changes in outstanding options for the three months ended March 31, 2013 is as follows:

	Number of Options
Outstanding at December 31, 2012		371,750
Exercised		(131,399	)
Forfeited and expired		(5,000	)
Outstanding at March 31, 2013		235,351

The Company granted 183,675 and 197,879 RSUs during the three months ended March 31, 2013 and 2012, respectively. The Company recorded equity-based compensation expense related to restricted stock and RSUs of $1.8 million and $1.5 million for the quarters ended March 31, 2013 and 2012, respectively.

9

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2013

(Unaudited)

A summary of changes in unvested shares/units for the three months ended March 31, 2013 is as follows:

	Number of shares/units
Outstanding at December 31, 2012		597,199
Granted		183,675
Vested		(195,012	)
Forfeited		(52,406	)
Outstanding at March 31, 2013		533,456

5. Income Taxes

The Company’s effective tax rate was 32.6% and 36.0% for the quarters ended March 31, 2013 and 2012, respectively. The decrease in the effective tax rate for the quarter ended March 31, 2013 compared to the same quarter in the prior year is principally due to the reinstatement of the federal research and development tax credit in January 2013 for the 2012 and 2013 tax years, partially offset by the establishment of state income tax reserves.

The Company applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification. For the three months ended March 31, 2013, the Company experienced a net increase in unrecognized tax benefits of $0.4 million primarily related to state income tax and the reinstated federal research and development tax credit. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions within its global operations in income tax expense.

The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The Company is no longer subject to income tax examinations for the years before 2010 in the U.S. federal, substantially all state and local, and substantially all non-US jurisdictions.

6. Net Earnings Per Share

Basic net earnings per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for each period presented. Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares and common equivalent shares (CESs) outstanding for each period presented using the treasury stock method.

The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three months ended March 31, 2013 and 2012 (in thousands, except per share data):

	Three Months Ended March 31,
	2013			2012
Net income	$	13,355		$	11,402
Earnings per share:
Basic	$	0.69		$	0.57
Effect of CESs		(0.01	)		(0.02	)
Diluted	$	0.68		$	0.55
Weighted average number of shares:
Basic		19,327			19,904
Effect of CESs		358			733
Diluted		19,685			20,637

There were no anti-dilutive CESs during 2012 and 2013.

10

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2013

(Unaudited)

7. Contingencies

From time to time, the Company may be involved in litigation relating to claims arising out of its ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of the Company’s installations involve products that are critical to the operations of its clients’ businesses. Any failure in a product could result in a claim for substantial damages against the Company, regardless of its responsibility for such failure. Although the Company attempts to limit contractually its liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in the Company’s contracts will be enforceable in all instances. The Company is not presently involved in any material litigation. The Company expenses legal costs associated with loss contingencies as such claims are incurred.

8. Operating Segments

The Company operates its business in three geographical segments: the Americas (North America and Latin America); Europe, Middle East, and Africa (EMEA); and Asia Pacific (APAC). The information for the periods presented below reflects these segments. All segments derive revenue from the sale and implementation of the Company’s supply chain execution and planning solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain. The Company uses the same accounting policies for each operating segment. The Chief Executive Officer and Chief Financial Officer evaluate performance based on revenue and operating results for each region.

The Americas segment charges royalty fees to the EMEA and APAC segments based on software licenses sold by those operating segments. The royalties, which totaled approximately $0.7 million and $1.2 million for the three months ended March 31, 2013 and 2012, respectively, are included in cost of revenue in EMEA and APAC with a corresponding reduction in the Americas cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of personnel, direct sales and marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all research and development costs including the costs associated with the Company’s India operations.

The following table presents the revenues, expenses and operating income by reporting segment for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013								2012
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
License	$	11,529	$	1,319	$	1,397	$	14,245	$	10,989	$	4,059	$	539	$	15,587
Services		61,280		9,763		3,844		74,887		57,116		8,046		5,208		70,370
Hardware and other		7,011		349		109		7,469		5,090		302		132		5,524
Total revenue		79,820		11,431		5,350		96,601		73,195		12,407		5,879		91,481
Costs and Expenses:
Cost of revenue		33,814		6,160		3,064		43,038		29,017		6,065		2,853		37,935
Operating expenses		27,697		3,444		1,277		32,418		29,259		3,702		1,301		34,262
Depreciation and amortization		1,345		74		65		1,484		1,234		60		50		1,344
Total costs and expenses		62,856		9,678		4,406		76,940		59,510		9,827		4,204		73,541
Operating income	$	16,964	$	1,753	$	944	$	19,661	$	13,685	$	2,580	$	1,675	$	17,940

11

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

March 31, 2013

(Unaudited)

The Company’s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Professional services	$	49,151	$	46,621
Customer support and software enhancements		25,736		23,749
Total services revenue	$	74,887	$	70,370

License revenues related to the Company’s warehouse and non-warehouse product groups for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Warehouse	$	9,251	$	8,678
Non-Warehouse		4,994		6,909
Total software license revenue	$	14,245	$	15,587

9. New Accounting Pronouncements

In February 2013, the FASB issued an Accounting Standards Update (ASU) on reporting of amounts reclassified out of accumulated other comprehensive income, an amendment to the Presentation of Comprehensive Income Topic of the FASB Accounting Standards Codification. The ASU requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, companies are required to present either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, companies are required to cross-reference to other disclosures that provide additional detail about those amounts. This guidance is effective prospectively for annual and interim periods beginning after December 15, 2012. The Company adopted the ASU in its first quarter of 2013 reporting, which did not have an impact on its financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Certain statements contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements related to plans for future business development activities, anticipated costs of revenues, product mix and service revenues, research and development and selling, general and administrative activities, and liquidity and capital needs and resources. When used in this report, the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which reflect our opinions only as of the date of this quarterly report. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. For further information about these and other factors that could affect our future results, please see “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2012. Investors are cautioned that 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. The following discussion should be read in conjunction with the condensed consolidated financial statements for the three months ended March 31, 2013 and 2012, including the notes to those statements, included elsewhere in this quarterly report. We also recommend the following discussion be read in conjunction with management’s discussion and analysis and consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2012. References in this filing to the “Company,” “Manhattan,” “Manhattan Associates,” “we,” “our,” and “us” refer to Manhattan Associates, Inc., our predecessors, and our wholly-owned and consolidated subsidiaries.

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Business Overview

We are a leading developer and implementer of supply chain software solutions that help organizations optimize their supply chain operations from planning through execution. Our platform-based supply chain software solution portfolios – Manhattan SCOPE^® and Manhattan SCALE^TM – are designed to deliver both business agility and total cost of ownership advantages to customers. Manhattan SCOPE (Supply Chain Optimization, Planning through Execution) leverages our Supply Chain Process Platform (SCPP) to unify the full breadth of the supply chain, while Manhattan SCALE (Supply Chain Architected for Logistics Execution) leverages Microsoft’s .NET^® platform to unify logistics functions.

Early in the Company’s history, our offerings were heavily focused on warehouse management solutions. As the Company grew in size and scope, our offerings expanded across the entire supply chain, while still maintaining a significant presence in, and a relatively strong concentration of revenues from warehouse management solutions, which is a component of our distribution management solution suite. Over time, as our non-warehouse management solutions have proliferated and increased in capability, the Company’s revenue concentration in its warehouse management solutions has correspondingly decreased.

Our business model is singularly focused on the development and implementation of complex supply chain software solutions that are designed to optimize supply chain effectiveness and efficiency for our customers. We have three principal sources of revenue:

• licenses of our supply chain software;

• professional services, including solutions planning and implementation, related consulting, customer training, and customer support services and software enhancements (collectively, “services”); and

• hardware sales and other revenue.

In the three months ended March 31, 2013, we generated $96.6 million in total revenue, with a revenue mix of: license revenue 15%; services revenue 77%; and hardware and other revenue 8%.

We manage our business based on three geographic regions: North America and Latin America (Americas); Europe, Middle East, and Africa (EMEA); and Asia Pacific (APAC). Geographic revenue is based on the location of the sale. Our international revenue was approximately $24.7 million for the three months ended March 31, 2013, which represents approximately 25% of our total revenue. International revenue includes all revenue derived from sales to customers outside the United States. At March 31, 2013, we employed approximately 2,410 employees worldwide, of which 1,135 employees are based in the Americas, 170 employees in EMEA, and 1,105 employees in APAC (including India). We have offices in Australia, China, France, India, Japan, the Netherlands, Singapore, and the United Kingdom, as well as representatives in Mexico and reseller partnerships in Latin America, Eastern Europe, the Middle East, South Africa, and Asia.

Global Economic Trends and Industry Factors

Global macroeconomic trends, technology spending, and supply chain management market growth are important barometers for our business. In the first quarter of 2013, approximately 75% of our total revenue was generated in the United States, 12% in EMEA, and the balance in APAC, Canada, and Latin America. Gartner Inc., an information technology research and advisory company, estimates that nearly 80% of every supply chain software solutions dollar invested is spent in the United States (50%) and Western Europe (28%); consequently, the health of the U.S. and Western European economies has a meaningful impact on our financial results.

We sell technology-based solutions with total pricing, including software and services, in many cases exceeding $1.0 million. Our software often is a part of our customers’ and prospects’ much larger capital commitment associated with facilities expansion and business improvement. We believe that, given the lingering uncertainty in the global macro environment, the current sales cycles for large license deals of $1.0 million or greater in our target markets have been extended. The current business climate within the United States and geographic regions in which we operate continues to affect customers’ and prospects’ decisions regarding timing of strategic capital expenditures. Delays with respect to such decisions can have a material adverse impact on our business, and may further intensify competition in our already highly competitive markets.

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In April 2013, the International Monetary Fund (IMF) provided a World Economic Outlook (WEO), which projected global economic growth to reach about 3 ¹/₄ percent in 2013 and 4 percent in 2014. The WEO noted that “global prospects have improved again but the road to recovery in the advanced economies will remain bumpy.” The WEO projected that advanced economies, which represent our primary revenue markets, would grow at about 1 ¹/₄ percent in 2013 and 2 ¹/₄ percent in 2014, while the emerging and developing economies would continue to grow at a solid pace of about 5 ¹/₄ percent in 2013.

During 2012 and continuing into 2013, the overall trend has been steady for the Company’s large license deals, with recognized $1.0 million or larger software license sales totaling twelve for 2012 and totaling three in the first three months of 2013. However, the large deal flow has been inconsistent from quarter to quarter, reflecting what we believe to be ongoing macroeconomic uncertainty in the United States and Western Europe. While we are encouraged by our 2012 and first three months of 2013 results, we, along with many of our customers, still remain cautious regarding the pace of global economic recovery. With global GDP growth continuing to be well below pre-2008 levels, we believe global economic volatility likely will continue to shape customers’ and prospects’ buying decisions, making it more difficult to forecast sales cycles for our products and the timing of large software license deals.

Revenue

License revenue. License revenue, a leading indicator of our business, is primarily derived from software license fees that customers pay for supply chain solutions. License revenue totaled $14.2 million, or 15% of total revenue, with gross margins of 87.5% for the three months ended March 31, 2013. Our typical license revenue percentage mix of new to existing customers historically has approximated 50/50. However, for the three months ended March 31, 2013, the percentage mix of new to existing customers was approximately 30/70. We believe our current mix of new customer to existing customer license sales will fluctuate with continuing global macroeconomic uncertainty; however, we anticipate that the mix will return to historically normal levels in improved global economic conditions.

License revenue growth is influenced by the strength of general economic and business conditions and the competitive position of our software products. Our license revenue generally has long sales cycles and the timing of the closing of a few large license transactions can have a material impact on our quarterly license revenues, operating profit, operating margins, and earnings per share. For example, $1.0 million of license revenue in the first quarter of 2013 equates to approximately $0.03 of diluted earnings per share impact.

Our software solutions are singularly focused on the supply chain planning and execution markets, which are intensely competitive and characterized by rapid technological change. We are a market leader in the supply chain management software solutions market as defined by industry analysts such as ARC Advisory Group and Gartner. Our goal is to extend our position as a leading global supply chain solutions provider by growing our license revenues faster than our competitors through investment in innovation. We expect to continue to face increased competition from Enterprise Resource Planning (ERP) and Supply Chain Management applications vendors and business application software vendors that may broaden their solution offerings by internally developing, or by acquiring or partnering with independent developers of supply chain planning and execution software. Increased competition could result in price reductions, fewer customer orders, reduced gross margins, and loss of market share.

Services revenue. Our services business consists of professional services (consulting and customer training) and customer support services and software enhancements (CSSE). Services revenue totaled $74.9 million, or 77% of total revenue, with gross margins of 53.2% for the three months ended March 31, 2013. Professional services accounted for approximately 65% of total services revenue and approximately 50% of total revenue in the three months ended March 31, 2013. Our operating margin profile may be lower than those of various other technology companies due to our large services revenue mix as a percentage of total revenue. While we believe our services margins are very strong, they do lower our overall operating margin profile as services margins are inherently lower than license revenue margins.

At March 31, 2013, our services organization totaled approximately 1,440 employees, accounting for 60% of our total employees worldwide. Our professional services organization provides our customers with expertise and assistance in planning and implementing our solutions. To ensure a successful product implementation, consultants assist customers with the initial installation of a system, the conversion and transfer of the customer’s historical data onto our system, and ongoing training, education, and system upgrades. We believe our professional services enable customers to implement our software more rapidly than if they were to rely on internal or other third party services, enable the customer to maximize value from our solution, strengthen our customer relationships, and add to our industry-specific knowledge base for use in future implementations and product innovations.

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Although our professional services are optional, the majority of our customers use at least some portion of these services for their planning, implementation, or related needs. Professional services are typically rendered under time and materials-based contracts with services typically billed on an hourly basis. Professional services are sometimes rendered under fixed-fee based contracts with payments due on specific dates or milestones.

Typically, our professional services lag license revenue by several quarters, as implementation services and related consulting are performed after the purchase of the software. Services revenue growth is contingent upon license revenue growth and customer upgrade cycles, which are influenced by the strength of general economic and business conditions and the competitive position of our software products. In addition, our business has competitive exposure to offshore providers and other consulting companies. All of these factors potentially create the risk of pricing pressure, fewer customer orders, reduced gross margins, and loss of market share.

For CSSE, we offer a comprehensive 24 hour per day, 365 days per year program that provides our customers with software upgrades, when and if available, which include additional or improved functionality and technological advances incorporating emerging supply chain and industry initiatives.

Our CSSE revenues totaled $25.7 million for the three months ended March 31, 2013, representing approximately 35% of services revenue and approximately 25% of total revenue in the three months ended March 31, 2013. The growth of CSSE revenues is influenced by: (i) new license revenue growth, (ii) annual renewal of support contracts, and (iii) fluctuations in currency rates. Substantially all of our customers renew their annual support contracts. Over the last three years, our annual revenue renewal rate of customers subscribing to comprehensive support and software enhancements has been greater than 90%. CSSE fees generally are paid in advance, and our CSSE revenue generally is recognized ratably over the term of the agreement, typically twelve months. CSSE renewal revenue is not recognized unless payment is received from the customer.

Hardware and other revenue. Our hardware and other revenue totaled $7.5 million, representing 8% of total revenue with gross margins of 16.8% for the three months ended March 31, 2013. In conjunction with the licensing of our software, and as a convenience for our customers, we resell a variety of hardware products developed and manufactured by third parties. These products include computer hardware, radio frequency terminal networks, RFID chip readers, bar code printers and scanners, and other peripherals. We resell all third-party hardware products pursuant to agreements with manufacturers or through distributor-authorized reseller agreements pursuant to which we are entitled to purchase hardware products at discount prices and to receive technical support in connection with product installations and any subsequent product malfunctions. We generally purchase hardware from our vendors only after receiving an order from a customer. As a result, we generally do not maintain hardware inventory.

Other revenue represents amounts associated with reimbursements from customers for out-of-pocket expenses. The total amount of expense reimbursement recorded to hardware and other revenue was $3.3 million for the three months ended March 31, 2013.

Product Development

We continue to invest significantly in research and development (R&D), which historically has averaged 13% to 15% of revenue (excluding hardware and other revenue) to provide leading solutions that help global manufacturers, wholesalers, distributors, retailers, and logistics providers successfully manage accelerating and fluctuating demands as well as the increasing complexity and volatility of their local and global supply chains. Our research and development expenses were $11.5 million for the three months ended March 31, 2013, respectively. At March 31, 2013, our R&D organization totaled approximately 650 employees, located in the U.S. and India, representing approximately 25% of our total employees worldwide.

We expect to continue to focus our R&D resources on the development and enhancement of supply chain software solutions. We offer what we believe to be the broadest solution portfolio in the supply chain solutions marketplace, to address all aspects of planning and forecasting, inventory optimization, order lifecycle management, transportation lifecycle management, and distribution management. We also plan to continue to enhance our existing solutions and to introduce new solutions to address evolving industry standards and market needs. We identify opportunities to further enhance our solutions and to develop and provide new solutions through our customer support organization, as well as through ongoing customer consulting engagements and implementations, interactions with our user groups, association with leading industry analysts and market research firms, and participation on industry standards and research committees. Our solutions address the needs of customers in various vertical markets, including retail, consumer goods, food and grocery, logistics service providers, industrial and wholesale, high technology and electronics, life sciences, and government.

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Cash Flow and Financial Condition

For the three months ended March 31, 2013, we generated cash flow from operating activities of $20.1 million. Our cash, cash equivalents, and investments at March 31, 2013 totaled $108.5 million, with no debt on our balance sheet. We currently have no credit facilities. During the past three years, our primary uses of cash have been funding investment in R&D and operations to drive earnings growth and repurchases of our common stock.

We repurchased 225,632 shares of Manhattan Associates’ outstanding common stock under our repurchase program during the three months ended March 31, 2013. In April 2013, our Board of Directors approved raising the Company’s remaining share repurchase authority to $50.0 million of Manhattan Associates’ outstanding common stock.

For the remainder of 2013, we anticipate that our priorities for the use of cash will be in developing sales and services resources and continued investment in product development to drive and support profitable growth and extend our market leadership. We will continue to evaluate acquisition opportunities that are complementary to our product footprint and technology direction. We will also continue to weigh our share repurchase options against cash for acquisitions and investing in the business. We do not anticipate any borrowing requirements in the remainder of 2013 for general corporate purposes.

Results of Operations

The following table summarizes our consolidated results for the three months ended March 31, 2013 and 2012.

	Three Months Ended March 31,
	2013		2012
	(in thousands, except per share data)
Revenue	$	96,601	$	91,481
Costs and expenses		76,940		73,541
Operating income		19,661		17,940
Other income (expense), net		151		(124	)
Income before income taxes		19,812		17,816
Net income	$	13,355	$	11,402
Diluted earnings per share	$	0.68	$	0.55
Diluted weighted average number of shares		19,685		20,637

We manage our business based on three geographic regions: the Americas, EMEA, and APAC. Geographic revenue information is based on the location of sale. The revenues represented below are from external customers only. The geographical-based expenses include costs of personnel, direct sales and marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all research and development costs, including the costs associated with the Company’s India operations. During the three months ended March 31, 2013 and 2012, we derived the majority of our revenues from sales to customers within our Americas region. The following table summarizes revenue and operating profit by region:

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	Three Months Ended March 31,
	2013		2012		% Change vs. Prior Year
	(in thousands)
Revenue:
Software License
Americas	$	11,529	$	10,989		5	%
EMEA		1,319		4,059		-68	%
APAC		1,397		539		159	%
Total software license	$	14,245	$	15,587		-9	%
Services
Americas	$	61,280	$	57,116		7	%
EMEA		9,763		8,046		21	%
APAC		3,844		5,208		-26	%
Total services	$	74,887	$	70,370		6	%
Hardware and Other
Americas	$	7,011	$	5,090		38	%
EMEA		349		302		16	%
APAC		109		132		-17	%
Total hardware and other	$	7,469	$	5,524		35	%
Total Revenue
Americas	$	79,820	$	73,195		9	%
EMEA		11,431		12,407		-8	%
APAC		5,350		5,879		-9	%
Total revenue	$	96,601	$	91,481		6	%
Operating income:
Americas	$	16,964	$	13,685		24	%
EMEA		1,753		2,580		-32	%
APAC		944		1,675		-44	%
Total operating income	$	19,661	$	17,940		10	%

Summary of the First Quarter 2013 Condensed Consolidated Financial Results

• Diluted earnings per share was $0.68 in the first quarter of 2013, compared to $0.55 in the first quarter of 2012.

• Consolidated total revenue was $96.6 million in the first quarter of 2013, compared to $91.5 million in the first quarter of 2012. License revenue was $14.2 million in the first quarter of 2013, compared to $15.6 million in the first quarter of 2012.

• Operating income was $19.7 million in the first quarter of 2013, compared to $17.9 million in the first quarter of 2012.

• Cash flow from operations was $20.1 million in the first quarter of 2013, compared to $13.1 million in the first quarter of 2012. Days Sales Outstanding was 56 days at March 31, 2013, compared to 60 days at December 31, 2012.

• Cash and investments on-hand were $108.5 million at March 31, 2013, compared to $103.0 million at December 31, 2012.

• During the three months ended March 31, 2013, the Company repurchased 225,632 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $15.9 million. In April 2013, the Board of Directors approved raising the Company’s remaining share repurchase authority to an aggregate of $50.0 million of the Company’s outstanding common stock.

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The results of our operations for the first quarters of 2013 and 2012 are discussed below.

Revenue

	Three Months Ended March 31,
					% Change vs.			% of Total Revenue
	2013		2012		Prior Year			2013			2012
	(in thousands)
Software license	$	14,245	$	15,587		-9	%		15	%		17	%
Services		74,887		70,370		6	%		77	%		77	%
Hardware and other		7,469		5,524		35	%		8	%		6	%
Total revenue	$	96,601	$	91,481		6	%		100	%		100	%

Our revenue consists of fees generated from the licensing and hosting of software; fees from professional services, customer support services, and software enhancements; hardware sales of complementary radio frequency and computer equipment; and other revenue representing amounts associated with reimbursements from customers for out-of-pocket expenses.

License revenue. License revenue decreased $1.3 million, or 9%, in the quarter ended March 31, 2013 compared to the same period in the prior year. We completed three large software license deals greater than $1.0 million in the first quarter of 2013. The license sales percentage mix across our product suite in the quarter ended March 31, 2013 was approximately 65/35 of warehouse management solutions to non-warehouse management solutions.

Services revenue. Services revenue increased $4.5 million, or 6%, in the first quarter of 2013 compared to the same quarter in the prior year due to a $2.5 million increase in professional services revenue and a $2.0 million increase in customer support and software enhancements. The increase in services revenue was primarily due to customer-specific initiatives in conjunction with customer upgrade activity and large license deals signed. Services revenue for the Americas and EMEA segments increased $4.2 million and $1.7 million, respectively, partially offset by a decrease in services revenue for the APAC segment of $1.4 million, in the first quarter of 2013 compared to the first quarter of 2012.

Hardware and other. Hardware sales increased by $1.1 million to $4.2 million in the first quarter of 2013 compared to $3.1 million for the first quarter of 2012. Sales of hardware are largely dependent upon customer-specific desires, which fluctuate from quarter to quarter. Other revenue represents reimbursements for professional service travel expenses that are required to be classified as revenue and are included in hardware and other revenue. Reimbursements by customers for out-of-pocket expenses were approximately $3.3 million and $2.5 million for the quarters ended March 31, 2013 and 2012, respectively.

Cost of Revenue

	Three Months Ended March 31,
					% Change vs.
	2013		2012		Prior Year
	(in thousands)
Cost of software license	$	1,778	$	1,777		0	%
Cost of services		35,046		31,710		11	%
Cost of hardware and other		6,214		4,448		40	%
Total cost of revenue	$	43,038	$	37,935		13	%

Cost of license. Cost of license consists of the costs associated with software reproduction; hosting services; media, packaging and delivery, documentation and other related costs; and royalties on third-party software sold with or as part of our products. Cost of license was flat in the first quarter of 2013 compared to the same quarter of 2012.

Cost of services. Cost of services consists primarily of salaries and other personnel-related expenses of employees dedicated to professional and technical services and customer support services. The $3.3 million, or 11%, increase in cost of services in the quarter ended March 31, 2013 compared to the same quarter in the prior year was principally due to an increase in compensation and other personnel-related expenses resulting from increased headcount in our services organization.

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Cost of hardware and other. Cost of hardware increased by $0.9 million to $3.0 million in the first quarter of 2013 compared to $2.1 million in the same quarter of 2012. Cost of hardware and other includes professional services billed travel expenses reimbursed by customers of approximately $3.3 million and $2.4 million for the quarters ended March 31, 2013 and 2012, respectively.

Operating Expenses

	Three Months Ended March 31,
					% Change vs.
	2013		2012		Prior Year
	(in thousands)
Research and development	$	11,476	$	11,551		-1	%
Sales and marketing		11,434		12,403		-8	%
General and administrative		9,508		10,308		-8	%
Depreciation and amortization		1,484		1,344		10	%
Operating expenses	$	33,902	$	35,606		-5	%

Research and development. Research and development expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses for the quarter ended March 31, 2013 slightly decreased as compared to the quarter ended March 31, 2012.

Our principal research and development activities have focused on the integration of acquired products, new product releases and the expansion of our existing products including the product footprint of our supply chain optimization solutions suite, which we call Supply Chain Optimization from Planning through Execution (SCOPE). The Manhattan SCOPE Platform provides not only a sophisticated service-oriented architecture-based application framework, but a platform that facilitates integration with ERP and other supply chain solutions. For each of the quarters ended March 31, 2013 and 2012, we did not capitalize any research and development costs.

Sales and marketing. Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs, and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses decreased by $1.0 million in the first quarter of 2013 compared to the same quarter of the prior year primarily due to a decrease of $0.8 million in performance-based bonus expenses and a decrease of $0.3 million in marketing programs partially offset by an increase of $0.4 million in travel expenses.

General and administrative. General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. General and administrative expenses decreased by $0.8 million in the current year quarter compared to the same quarter in the prior year principally due to a decrease of $0.5 million in professional fees.

Depreciation and amortization. Depreciation expense was $1.5 million and $1.3 million for the quarters ended March 31, 2013 and 2012, respectively. Amortization of intangibles associated with various acquisitions in prior years was immaterial as they are nearly fully amortized.

Operating Income

Operating income for the first quarter of 2013 was $19.7 million compared to $17.9 million for the first quarter of 2012. Operating margins were 20.4% for the first quarter of 2013 versus 19.6% for the same quarter in the prior year. Operating income and margin increased primarily due to strong revenue growth and favorable foreign currency translation effects of $0.4 million for the three months ended March 31, 2013, primarily due to the weakening of the Indian Rupee versus the U.S. dollar during the three months ended March 31, 2013 compared to the same period in the prior year.

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Other Income (Expense), Net and Taxes

	Three Months Ended March 31,
						% Change vs.
	2013		2012			Prior Year
	(in thousands)
Other income (expense), net	$	151	$	(124	)		-222	%
Income tax provision		6,457		6,414			1	%

Other income (expense), net. Other income (expense), net principally includes interest income, foreign currency gains and losses, and other non-operating expenses. Other income (expense), net increased $0.3 million in the first quarter of 2013 compared to the first quarter of 2012 primarily due to a $0.2 million decrease in foreign currency losses related to the fluctuation of the U.S. dollar relative to foreign currencies, principally the Indian Rupee. We recorded net foreign currency losses of approximately $0.2 million and $0.4 million during the quarters ended March 31, 2013 and 2012, respectively.

Income tax provision. Our effective income tax rate was 32.6% and 36.0% for the quarters ended March 31, 2013 and 2012, respectively. The decrease in the effective tax rate for the quarter ended March 31, 2013 compared to the same quarter in the prior year is principally due to the reinstatement of the federal research and development tax credit in January 2013 for the 2012 and 2013 tax years, partially offset by the establishment of state income tax reserves.

Liquidity and Capital Resources

As of March 31, 2013, we had approximately $108.5 million in cash, cash equivalents, and investments, as compared to $103.0 million at December 31, 2012. Our main source of operating cash flow is cash collections from our customers, which we use to fund our operations. In the remainder of 2013, we expect that our priorities for the use of cash will be our share repurchase program, developing sales and services resources and continued investment in product development to drive and support profitable growth and to extend our market leadership. We expect to continue to weigh our share repurchase options against using cash for investing in the business and acquisition opportunities that are complementary to our product footprint and technology direction. We do not anticipate any borrowing requirements in the remainder of 2013 for general corporate purposes.

Our operating activities generated cash flow of approximately $20.1 million and $13.1 million for the three months ended March 31, 2013 and 2012, respectively. The increase in cash flow from operations was primarily attributable to higher revenue and net earnings and strong cash collections.

Our investing activities used cash of approximately $1.7 million during the three months ended March 31, 2013 and provided cash of approximately $0.3 million during the three months ended March 31, 2012. The primary use of cash for investing activities for the three months ended March 31, 2013 was $0.6 million in capital expenditures and net purchases of $1.1 million in short-term investments. The primary source of cash for investing activities for the three months ended March 31, 2012 was the net maturities of $2.1 million in investments, partially offset by $1.8 million in capital expenditures.

Our financing activities used cash of approximately $13.7 million for both three months periods ended March 31, 2013 and 2012. The principal use of cash for financing activities for the three months ended March 31, 2013 was to purchase approximately $20.5 million of our common stock, including $4.5 million of shares withheld for taxes due upon vesting of restricted stock and restricted stock units, partially offset by proceeds generated from options exercised of $2.6 million and a $4.2 million excess tax benefit from equity-based compensation. The principal use of cash for financing activities for the three months ended March 31, 2012 was to purchase approximately $33.5 million of our common stock, including $2.8 million for shares withheld for taxes due upon vesting of restricted stock, partially offset by proceeds generated from options exercised of $16.1 million and a $3.6 million excess tax benefit from equity-based compensation.

Periodically, opportunities may arise to grow our business through the acquisition of complementary and synergistic companies, products, and technologies. Any material acquisition could result in a decrease to our working capital depending on the amount, timing, and nature of the consideration to be paid. We believe that existing balances of cash and investments will be sufficient to meet our working capital and capital expenditure needs at least for the next twelve months, although there can be no assurance that this will be the case.

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Critical Accounting Policies and Estimates

In the first three months of 2013, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2012.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes to the Quantitative and Qualitative Disclosures about Market Risk previously disclosed in our annual report on Form 10-K for the year ended December 31, 2012.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

As of the end of the period covered by this report, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, including any corrective actions with regard to material weaknesses.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be a party to legal proceedings arising in the ordinary course of business, and we could be a party to legal proceedings not in the ordinary course of business. The Company is not currently a party to any legal proceeding the result of which it believes could have a material adverse impact upon its business, financial position, results of operations, or cash flows.

Many of our installations involve products that are critical to the operations of our clients’ businesses. Any failure in our products could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances.

21

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of the Company’s annual report on Form 10-K for the year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information regarding our common stock repurchases under our publicly-announced repurchase program and shares withheld for taxes due upon vesting of restricted stock for the quarter ended March 31, 2013. All repurchases related to the repurchase program were made on the open market.

							Maximum Number (or
					Total Number of		Approximate Dollar
	Total		Average		Shares Purchased		Value) of Shares that
	Number of		Price Paid		as Part of Publicly		May Yet Be Purchased
	Shares		per		Announced Plans		Under the Plans or
Period	Purchased(a)		Share(b)		or Programs		Programs
January 1—January 31, 2013		51,818	$	63.48		—	$	50,000,000
February 1—February 28, 2013		121,605		68.94		121,437		41,628,666
March 1—March 31, 2013		104,195		72.54		104,195		34,070,706
Total		277,618		69.27		225,632

(a) Includes 51,818 shares and 168 shares withheld for taxes due upon vesting of restricted stock during January and February, respectively.

(b) The average price paid per share for shares withheld for taxes due upon vesting of restricted stock was $63.48 and $68.86 in January and February, respectively.

In April 2013, our Board of Directors approved raising our remaining repurchase authority for the Company’s common stock to a total of $50.0 million.

Item 3. Defaults Upon Senior Securities.

No events occurred during the quarter covered by the report that would require a response to this item.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

No events occurred during the quarter covered by the report that would require a response to this item.

22

Item 6. Exhibits.

Exhibit 31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS**	XBRL Instance Document
Exhibit 101.SCH**	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MANHATTAN ASSOCIATES, INC.
Date: April 30, 2013	/s/ Eddie Capel
	Eddie Capel
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: April 30, 2013	/s/ Dennis B. Story
	Dennis B. Story
	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

24

EXHIBIT INDEX

Exhibit 31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS**	XBRL Instance Document
Exhibit 101.SCH**	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* In accordance with Item 601(b)(32)(ii) of the SEC’s Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eddie Capel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 30^th day of April, 2013

/s/ Eddie Capel

Eddie Capel, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis B. Story, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 30^th day of April, 2013

/s/ Dennis B. Story

Dennis B. Story, Executive Vice President,

Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code and shall not be relied on by any person for any other purpose.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer, respectively, of Manhattan Associates, Inc. (the “Company”), hereby each certify that, to the undersigned’s knowledge:

The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2013 (the “Report”), which accompanies this Certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 30^th day of April, 2013

/s/ Eddie Capel

Eddie Capel, President and Chief Executive Officer

/s/ Dennis B. Story

Dennis B. Story, Executive Vice President,

Chief Financial Officer and Treasurer

In accordance with SEC Release No. 34-47986, this Exhibit is furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Reconciliation of Net Income and Shares Amounts in Computation of Basic and Diluted Net Earnings Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Net income	$ 13,355	$ 11,402
Earnings per share:
Basic	$ 0.69	$ 0.57
Effect of CESs	$ (0.01)	$ (0.02)
Diluted	$ 0.68	$ 0.55
Weighted average number of shares:
Basic	19,327	19,904
Effect of CESs	358	733
Diluted	19,685	20,637

XML

Fair Value Measurement

3 Months Ended

Mar. 31, 2013

Fair Value Measurement

3. Fair Value Measurement

The Company measures its investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:

• Level 1–Quoted prices in active markets for identical instruments.

• Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s investments are categorized as available-for-sale securities and recorded at fair market value. Investments with maturities of 90 days or less from the date of purchase are classified as cash equivalents; investments with maturities of greater than 90 days from the date of purchase but less than one year are generally classified as short-term investments; and investments with maturities of one year or greater from the date of purchase are generally classified as long-term investments. Unrealized holding gains and losses are reflected as a net amount in a separate component of shareholders’ equity until realized. For the purposes of computing realized gains and losses, cost is determined on a specific identification basis.

At March 31, 2013, the Company’s cash, cash equivalents, and short-term investments balances were $58.2 million, $42.9 million, and $7.5 million, respectively. The Company currently has no long-term investments. Cash equivalents consist of highly liquid money market funds and certificates of deposit. Short-term investments consist of certificates of deposit. The Company uses quoted prices from active markets that are classified at Level 1 as a highest level observable input in the disclosure hierarchy framework for all available-for-sale securities. At March 31, 2013 and December 31, 2012, the Company had $33.3 million and $35.2 million in money market funds, respectively, which are classified as Level 1 and are included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The Company has no investments classified as Level 2 or Level 3.

XML

License Revenues of Warehouse and Non-Warehouse Product Groups (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue from External Customer [Line Items]
Total software license revenue	$ 14,245	$ 15,587
Warehouse Product Groups
Revenue from External Customer [Line Items]
Total software license revenue	9,251	8,678
Non-warehouse Product Groups
Revenue from External Customer [Line Items]
Total software license revenue	$ 4,994	$ 6,909

XML

Services Revenues from Professional Services and Customer Support and Software Enhancements (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue from External Customer [Line Items]
Professional services	$ 49,151	$ 46,621
Customer support and software enhancements	25,736	23,749
Total services revenue	$ 74,887	$ 70,370

XML

Revenue Recognition

3 Months Ended

Mar. 31, 2013

Revenue Recognition

2. Revenue Recognition

The Company’s revenue consists of fees from the licensing and hosting of software (collectively included in “Software license” revenue in the Condensed Consolidated Statements of Income), fees from implementation and training services (collectively, “professional services”) and customer support services and software enhancements (collectively included in “Services” revenue in the Condensed Consolidated Statements of Income), and sales of hardware and other revenue, which consists of reimbursements of out-of-pocket expenses incurred in connection with professional services rendered (collectively included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income). All revenue is recognized net of any related sales taxes.

The Company recognizes license revenue when the following criteria are met: (1) a signed contract is obtained covering all elements of the arrangement, (2) delivery of the product has occurred, (3) the license fee is fixed or determinable, and (4) collection is probable. Revenue recognition for software with multiple-element arrangements requires recognition of revenue using the “residual method” when (a) there is vendor-specific objective evidence (VSOE) of the fair values of all undelivered elements in a multiple-element arrangement that is not accounted for using long-term contract accounting, (b) VSOE of fair value does not exist for one or more of the delivered elements in the arrangement, and (c) all other applicable revenue-recognition criteria for software revenue recognition, are satisfied. For those contracts that contain significant customization or modifications, license revenue is recognized using contract accounting.

The Company allocates revenue to customer support services and software enhancements and any other undelivered elements of the arrangement based on VSOE of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria have been met. The balance of the revenue, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If the Company cannot objectively determine the fair value of each undelivered element based on the VSOE of fair value, the Company defers revenue recognition until all elements are delivered, all services have been performed, or until fair value can be objectively determined. The Company must apply judgment in determining all elements of the arrangement and in determining the VSOE of fair value for each element, considering the price charged for each product on a stand-alone basis or applicable renewal rates. For arrangements that include future software functionality deliverables, the Company accounts for these deliverables as a separate element of the arrangement. Because the Company does not sell these deliverables on a standalone basis, the Company is not able to establish VSOE of fair value of these deliverables. As a result, the Company defers all revenue under the arrangement until the future functionality has been delivered to the customer.

Payment terms for the Company’s software licenses vary. Each contract is evaluated individually to determine whether the fees in the contract are fixed or determinable and whether collectibility is probable. Judgment is required in assessing the probability of collection, which is generally based on evaluation of customer-specific information, historical collection experience, and economic market conditions. If market conditions decline, or if the financial conditions of customers deteriorate, the Company may be unable to determine that collectibility is probable, and the Company could be required to defer the recognition of revenue until the Company receives customer payments. The Company has an established history of collecting under the terms of its software license contracts without providing refunds or concessions to its customers. Therefore, the Company has determined that the presence of payment terms that extend beyond contract execution in a particular contract do not preclude the conclusion that the fees in the contract are fixed or determinable. Although infrequent, when payment terms in a contract extend beyond twelve months, the Company has determined that such fees are not fixed or determinable and recognizes revenue as payments become due provided that all other conditions for revenue recognition have been met.

The Company’s services revenue consists of fees generated from professional services and customer support and software enhancements related to the Company’s software products. Professional services include system planning, design, configuration, testing and other software implementation support and are not typically essential to the functionality of our software. Fees from professional services performed by the Company are separately priced and are generally billed on an hourly basis, and revenue is recognized as the services are performed. In certain situations, professional services are rendered under agreements in which billings are limited to contractual maximums or based upon a fixed-fee for portions of or all of the engagement. Revenue related to fixed-fee based contracts is recognized on a proportional performance basis based on the hours incurred on discrete projects within an overall services arrangement. The Company has determined that output measures, or services delivered, approximate the input measures associated with fixed-fee services arrangements. Project losses are provided for in their entirety in the period in which they become known. Revenue related to customer support services and software enhancements is generally paid in advance and recognized ratably over the term of the agreement, typically twelve months.

Hardware and other revenue is generated from the resale of a variety of hardware products, developed and manufactured by third parties, that are integrated with and complementary to the Company’s software solutions. As part of a complete solution, the Company’s customers periodically purchase hardware from the Company for use with the software licenses purchased from the Company. These products include computer hardware, radio frequency terminal networks, radio frequency identification (RFID) chip readers, bar code printers and scanners, and other peripherals. Hardware revenue is recognized upon shipment to the customer when title passes. The Company generally purchases hardware from the Company’s vendors only after receiving an order from a customer. As a result, the Company generally does not maintain hardware inventory.

In accordance with the other presentation matters within the Revenue Recognition Topic of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, the Company recognizes amounts associated with reimbursements from customers for out-of-pocket expenses as revenue. Such amounts have been included in “Hardware and other” revenue in the Condensed Consolidated Statements of Income. The total amount of expense reimbursement recorded to revenue was $3.3 million and $2.5 million for the three months ended March 31, 2013 and 2012, respectively.

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 101,093	$ 96,737
Short term investments	7,452	6,310
Accounts receivable, net of allowance of $5,207 and $6,235 in 2013 and 2012, respectively	59,587	62,102
Deferred income taxes	7,798	7,787
Prepaid expenses and other current assets	9,291	8,571
Total current assets	185,221	181,507
Property and equipment, net	14,749	15,650
Goodwill, net	62,259	62,265
Deferred income taxes	717	732
Other assets	1,595	1,659
Total assets	264,541	261,813
Current liabilities:
Accounts payable	6,722	10,229
Accrued compensation and benefits	14,561	16,720
Accrued and other liabilities	11,262	12,233
Deferred revenue	57,932	47,935
Income taxes payable		4,024
Total current liabilities	90,477	91,141
Other non-current liabilities	11,018	9,163
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2013 or 2012
Common stock, $.01 par value; 100,000,000 shares authorized; 19,471,417 and 19,620,967 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively	195	196
Retained earnings	167,634	166,016
Accumulated other comprehensive loss	(4,783)	(4,703)
Total shareholders' equity	163,046	161,509
Total liabilities and shareholders' equity	$ 264,541	$ 261,813

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities:
Net income	$ 13,355	$ 11,402
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,484	1,344
Equity-based compensation	1,907	1,660
Loss on disposal of equipment	1
Tax benefit of stock awards exercised/vested	4,206	4,491
Excess tax benefits from equity-based compensation	(4,163)	(3,634)
Deferred income taxes	1,682	2,564
Unrealized foreign currency (gain) loss	(75)	172
Changes in operating assets and liabilities:
Accounts receivable, net	2,255	(627)
Other assets	(594)	(292)
Accounts payable, accrued and other liabilities	(6,652)	(5,517)
Income taxes	(3,720)	(832)
Deferred revenue	10,414	2,328
Net cash provided by operating activities	20,100	13,059
Investing activities:
Purchase of property and equipment	(598)	(1,796)
Net (purchases) maturities of investments	(1,115)	2,106
Net cash (used in) provided by investing activities	(1,713)	310
Financing activities:
Purchase of common stock	(20,474)	(33,487)
Proceeds from issuance of common stock from options exercised	2,623	16,108
Excess tax benefits from equity-based compensation	4,163	3,634
Net cash used in financing activities	(13,688)	(13,745)
Foreign currency impact on cash	(343)	473
Net change in cash and cash equivalents	4,356	97
Cash and cash equivalents at beginning of period	96,737	92,180
Cash and cash equivalents at end of period	$ 101,093	$ 92,277

XML

Summary of Changes in Outstanding Options (Detail)	3 Months Ended
	Mar. 31, 2013
Number of Options
Number of Options, Outstanding at December 31, 2012	371,750
Number of Options, Exercised	(131,399)
Number of Options, Forfeited and expired	(5,000)
Number of Options, Outstanding at March 31, 2013	235,351

XML

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reconciliation of Effective Income Tax Rate [Line Items]
Effective tax rate	32.60%	36.00%
Net increase in unrecognized tax benefits	$ 0.4

XML

Basis of Presentation and Principles of Consolidation

3 Months Ended

Mar. 31, 2013

Basis of Presentation and Principles of Consolidation

1. Basis of Presentation and Principles of Consolidation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Manhattan Associates, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information, with the instructions to Form 10-Q and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position at March 31, 2013, the results of operations for the three months ended March 31, 2013 and 2012, and cash flows for the three months ended March 31, 2013 and 2012. The results for the three months ended March 31, 2013 are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and management’s discussion and analysis included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Accounts receivable, allowance	$ 5,207	$ 6,235
Preferred stock, par value
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	19,471,417	19,620,967
Common stock, shares outstanding	19,471,417	19,620,967

XML

Net Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Reconciliation of Net Income and Share Amounts in Computation of Basic and Diluted Net Earnings Per Common Share

The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three months ended March 31, 2013 and 2012 (in thousands, except per share data):

	Three Months Ended March 31,
	2013			2012
Net income	$	13,355		$	11,402
Earnings per share:
Basic	$	0.69		$	0.57
Effect of CESs		(0.01	)		(0.02	)
Diluted	$	0.68		$	0.55
Weighted average number of shares:
Basic		19,327			19,904
Effect of CESs		358			733
Diluted		19,685			20,637

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 26, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	MANH
Entity Registrant Name	MANHATTAN ASSOCIATES INC
Entity Central Index Key	0001056696
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		19,462,458

XML

Operating Segments (Tables)

3 Months Ended

Mar. 31, 2013

Revenues, Expenses and Operating Income by Reporting Segment

The following table presents the revenues, expenses and operating income by reporting segment for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013								2012
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
License	$	11,529	$	1,319	$	1,397	$	14,245	$	10,989	$	4,059	$	539	$	15,587
Services		61,280		9,763		3,844		74,887		57,116		8,046		5,208		70,370
Hardware and other		7,011		349		109		7,469		5,090		302		132		5,524
Total revenue		79,820		11,431		5,350		96,601		73,195		12,407		5,879		91,481
Costs and Expenses:
Cost of revenue		33,814		6,160		3,064		43,038		29,017		6,065		2,853		37,935
Operating expenses		27,697		3,444		1,277		32,418		29,259		3,702		1,301		34,262
Depreciation and amortization		1,345		74		65		1,484		1,234		60		50		1,344
Total costs and expenses		62,856		9,678		4,406		76,940		59,510		9,827		4,204		73,541
Operating income	$	16,964	$	1,753	$	944	$	19,661	$	13,685	$	2,580	$	1,675	$	17,940

Services Revenues from Professional Services and Customer Support and Software Enhancements

The Company’s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Professional services	$	49,151	$	46,621
Customer support and software enhancements		25,736		23,749
Total services revenue	$	74,887	$	70,370

License Revenues of Warehouse and Non-Warehouse Product Groups

License revenues related to the Company’s warehouse and non-warehouse product groups for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Warehouse	$	9,251	$	8,678
Non-Warehouse		4,994		6,909
Total software license revenue	$	14,245	$	15,587

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue:
Software license	$ 14,245	$ 15,587
Services	74,887	70,370
Hardware and other	7,469	5,524
Total revenue	96,601	91,481
Costs and expenses:
Cost of license	1,778	1,777
Cost of services	35,046	31,710
Cost of hardware and other	6,214	4,448
Research and development	11,476	11,551
Sales and marketing	11,434	12,403
General and administrative	9,508	10,308
Depreciation and amortization	1,484	1,344
Total costs and expenses	76,940	73,541
Operating income	19,661	17,940
Other income (loss), net	151	(124)
Income before income taxes	19,812	17,816
Income tax provision	6,457	6,414
Net income	$ 13,355	$ 11,402
Basic earnings per share	$ 0.69	$ 0.57
Diluted earnings per share	$ 0.68	$ 0.55
Weighted average number of shares:
Basic	19,327	19,904
Diluted	19,685	20,637

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Net Earnings Per Share

3 Months Ended

Mar. 31, 2013

Net Earnings Per Share

6. Net Earnings Per Share

Basic net earnings per share is computed using net income divided by the weighted average number of shares of common stock outstanding (“Weighted Shares”) for each period presented. Diluted net earnings per share is computed using net income divided by the sum of Weighted Shares and common equivalent shares (CESs) outstanding for each period presented using the treasury stock method.

The following is a reconciliation of the net income and share amounts used in the computation of basic and diluted net earnings per common share for the three months ended March 31, 2013 and 2012 (in thousands, except per share data):

	Three Months Ended March 31,
	2013			2012
Net income	$	13,355		$	11,402
Earnings per share:
Basic	$	0.69		$	0.57
Effect of CESs		(0.01	)		(0.02	)
Diluted	$	0.68		$	0.55
Weighted average number of shares:
Basic		19,327			19,904
Effect of CESs		358			733
Diluted		19,685			20,637

There were no anti-dilutive CESs during 2012 and 2013.

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

5. Income Taxes

The Company’s effective tax rate was 32.6% and 36.0% for the quarters ended March 31, 2013 and 2012, respectively. The decrease in the effective tax rate for the quarter ended March 31, 2013 compared to the same quarter in the prior year is principally due to the reinstatement of the federal research and development tax credit in January 2013 for the 2012 and 2013 tax years, partially offset by the establishment of state income tax reserves.

The Company applies the provisions for income taxes related to, among other things, accounting for uncertain tax positions and disclosure requirements in accordance with the Income Taxes Topic of the FASB Accounting Standards Codification. For the three months ended March 31, 2013, the Company experienced a net increase in unrecognized tax benefits of $0.4 million primarily related to state income tax and the reinstated federal research and development tax credit. There has been no change to the Company’s policy that recognizes potential interest and penalties related to uncertain tax positions within its global operations in income tax expense.

The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The Company is no longer subject to income tax examinations for the years before 2010 in the U.S. federal, substantially all state and local, and substantially all non-US jurisdictions.

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Summary of Changes in Unvested Shares of Restricted Stock (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units, Granted	183,675	197,879
Restricted Stock and Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares/units, Outstanding at December 31, 2012	597,199
Number of units, Granted	183,675
Number of shares/units, Vested	(195,012)
Number of shares/units, Forfeited	(52,406)
Number of shares/units, Outstanding at March 31, 2013	533,456

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Revenue Recognition - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue Recognition [Line Items]
Expense reimbursement recorded to revenue	$ 3.3	$ 2.5

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New Accounting Pronouncements

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncements

9. New Accounting Pronouncements

In February 2013, the FASB issued an Accounting Standards Update (ASU) on reporting of amounts reclassified out of accumulated other comprehensive income, an amendment to the Presentation of Comprehensive Income Topic of the FASB Accounting Standards Codification. The ASU requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, companies are required to present either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, companies are required to cross-reference to other disclosures that provide additional detail about those amounts. This guidance is effective prospectively for annual and interim periods beginning after December 15, 2012. The Company adopted the ASU in its first quarter of 2013 reporting, which did not have an impact on its financial statements.

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Contingencies

3 Months Ended

Mar. 31, 2013

Contingencies

7. Contingencies

From time to time, the Company may be involved in litigation relating to claims arising out of its ordinary course of business, and occasionally legal proceedings not in the ordinary course. Many of the Company’s installations involve products that are critical to the operations of its clients’ businesses. Any failure in a product could result in a claim for substantial damages against the Company, regardless of its responsibility for such failure. Although the Company attempts to limit contractually its liability for damages arising from product failures or negligent acts or omissions, there can be no assurance that the limitations of liability set forth in the Company’s contracts will be enforceable in all instances. The Company is not presently involved in any material litigation. The Company expenses legal costs associated with loss contingencies as such claims are incurred.

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Operating Segments

3 Months Ended

Mar. 31, 2013

Operating Segments

8. Operating Segments

The Company operates its business in three geographical segments: the Americas (North America and Latin America); Europe, Middle East, and Africa (EMEA); and Asia Pacific (APAC). The information for the periods presented below reflects these segments. All segments derive revenue from the sale and implementation of the Company’s supply chain execution and planning solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain. The Company uses the same accounting policies for each operating segment. The Chief Executive Officer and Chief Financial Officer evaluate performance based on revenue and operating results for each region.

The Americas segment charges royalty fees to the EMEA and APAC segments based on software licenses sold by those operating segments. The royalties, which totaled approximately $0.7 million and $1.2 million for the three months ended March 31, 2013 and 2012, respectively, are included in cost of revenue in EMEA and APAC with a corresponding reduction in the Americas cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of personnel, direct sales and marketing expenses, and general and administrative costs to support the business. There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas costs are all research and development costs including the costs associated with the Company’s India operations.

The following table presents the revenues, expenses and operating income by reporting segment for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013								2012
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
License	$	11,529	$	1,319	$	1,397	$	14,245	$	10,989	$	4,059	$	539	$	15,587
Services		61,280		9,763		3,844		74,887		57,116		8,046		5,208		70,370
Hardware and other		7,011		349		109		7,469		5,090		302		132		5,524
Total revenue		79,820		11,431		5,350		96,601		73,195		12,407		5,879		91,481
Costs and Expenses:
Cost of revenue		33,814		6,160		3,064		43,038		29,017		6,065		2,853		37,935
Operating expenses		27,697		3,444		1,277		32,418		29,259		3,702		1,301		34,262
Depreciation and amortization		1,345		74		65		1,484		1,234		60		50		1,344
Total costs and expenses		62,856		9,678		4,406		76,940		59,510		9,827		4,204		73,541
Operating income	$	16,964	$	1,753	$	944	$	19,661	$	13,685	$	2,580	$	1,675	$	17,940

The Company’s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Professional services	$	49,151	$	46,621
Customer support and software enhancements		25,736		23,749
Total services revenue	$	74,887	$	70,370

License revenues related to the Company’s warehouse and non-warehouse product groups for the three months ended March 31, 2013 and 2012 are as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Warehouse	$	9,251	$	8,678
Non-Warehouse		4,994		6,909
Total software license revenue	$	14,245	$	15,587

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Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Changes in Outstanding Options

A summary of changes in outstanding options for the three months ended March 31, 2013 is as follows:

	Number of Options
Outstanding at December 31, 2012		371,750
Exercised		(131,399	)
Forfeited and expired		(5,000	)
Outstanding at March 31, 2013		235,351

Summary of Changes in Unvested Shares/Units

A summary of changes in unvested shares/units for the three months ended March 31, 2013 is as follows:

	Number of shares/units
Outstanding at December 31, 2012		597,199
Granted		183,675
Vested		(195,012	)
Forfeited		(52,406	)
Outstanding at March 31, 2013		533,456

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Equity-Based Compensation - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expense	$ 0.1	$ 0.1
Number of restricted stock units/shares, Granted	183,675	197,879
Restricted stock expense	$ 1.8	$ 1.5
Former Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, previously granted options approved for vesting during the period	3,750
Share based compensation, exercise price for options previously granted	$ 15.53
Share based compensation, previously granted restricted stock and RSUs approved for vesting during the period	10,597
Percentage of non-vested employee equity value preserved	22.00%
Percentage of non-vested employee equity value forfeited	78.00%

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Operating Segments - Additional Information (Detail) (Americas, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Americas
Segment Reporting Disclosure [Line Items]
Americas royalty fees	$ 0.7	$ 1.2

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net income	$ 13,355	$ 11,402
Foreign currency translation adjustment	(80)	1,088
Comprehensive income	$ 13,275	$ 12,490

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Equity-Based Compensation

3 Months Ended

Mar. 31, 2013

Equity-Based Compensation

4. Equity-Based Compensation

In January 2012, in order to simplify equity grant administration, the Company changed its practice of granting restricted stock in favor of granting restricted stock units, or RSUs, which convert to the Company’s common stock upon vesting. There is no material difference between the grant of restricted stock and the grant of RSUs to either the Company or the recipients receiving the grants; however, in contrast to the granting of restricted stock, no stock will actually be issued under the granting of RSUs until the units vest. The Company does not currently grant stock options.

As previously reported, on December 31, 2012, Mr. Peter F. Sinisgalli stepped down from the role of Chief Executive Officer of the Company and became a non-employee member of the Board of Directors. In March 2013, the Board of Directors, upon the recommendation of the Compensation Committee in recognition of Mr. Sinisgalli’s successful tenure as Chief Executive Officer and the superior performance of the Company under his leadership, approved the vesting of a portion of the equity incentives granted to him during his employment as Chief Executive Officer that were scheduled to vest during the first quarter of 2013. These previously granted incentives included options to acquire 3,750 shares at an exercise price of $15.53 per share and 10,597 shares of restricted stock and RSUs. The Board’s action preserved 22% of Mr. Sinisgalli’s non-vested employee equity value in recognition of his services and contribution, with the remaining 78% forfeited.

The Company recorded equity-based compensation related to stock options granted in prior years of $0.1 million during the three months ended March 31, 2013 and 2012.

A summary of changes in outstanding options for the three months ended March 31, 2013 is as follows:

	Number of Options
Outstanding at December 31, 2012		371,750
Exercised		(131,399	)
Forfeited and expired		(5,000	)
Outstanding at March 31, 2013		235,351

The Company granted 183,675 and 197,879 RSUs during the three months ended March 31, 2013 and 2012, respectively. The Company recorded equity-based compensation expense related to restricted stock and RSUs of $1.8 million and $1.5 million for the quarters ended March 31, 2013 and 2012, respectively.

A summary of changes in unvested shares/units for the three months ended March 31, 2013 is as follows:

	Number of shares/units
Outstanding at December 31, 2012		597,199
Granted		183,675
Vested		(195,012	)
Forfeited		(52,406	)
Outstanding at March 31, 2013		533,456

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Revenues, Expenses and Operating Income by Reporting Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting Information [Line Items]
License	$ 14,245	$ 15,587
Services	74,887	70,370
Hardware and other	7,469	5,524
Total revenue	96,601	91,481
Cost of revenue	43,038	37,935
Operating expenses	32,418	34,262
Depreciation and amortization	1,484	1,344
Total costs and expenses	76,940	73,541
Operating income	19,661	17,940
Americas
Segment Reporting Information [Line Items]
License	11,529	10,989
Services	61,280	57,116
Hardware and other	7,011	5,090
Total revenue	79,820	73,195
Cost of revenue	33,814	29,017
Operating expenses	27,697	29,259
Depreciation and amortization	1,345	1,234
Total costs and expenses	62,856	59,510
Operating income	16,964	13,685
EMEA
Segment Reporting Information [Line Items]
License	1,319	4,059
Services	9,763	8,046
Hardware and other	349	302
Total revenue	11,431	12,407
Cost of revenue	6,160	6,065
Operating expenses	3,444	3,702
Depreciation and amortization	74	60
Total costs and expenses	9,678	9,827
Operating income	1,753	2,580
APAC
Segment Reporting Information [Line Items]
License	1,397	539
Services	3,844	5,208
Hardware and other	109	132
Total revenue	5,350	5,879
Cost of revenue	3,064	2,853
Operating expenses	1,277	1,301
Depreciation and amortization	65	50
Total costs and expenses	4,406	4,204
Operating income	$ 944	$ 1,675

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Fair Value Measurement - Additional Information (Detail) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash balance	$ 58,200,000
Cash equivalents	42,900,000
Short-term investments	7,452,000	6,310,000
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 33,300,000	$ 35,200,000