EX-99.1 2 manh-ex991_6.htm EX-99.1 manh-ex991_6.htm

Exhibit 99.1

 

 

Contact:

 

Matt Humphries, CFA

 

Rick Fernandez

 

 

Senior Director,

Investor Relations

 

Senior Manager, 

Corporate Communications

 

 

Manhattan Associates, Inc.

 

Manhattan Associates, Inc.

 

 

678-597-6574

 

678-597-6988

 

 

mhumphries@manh.com

 

rfernandez@manh.com

 

 

 

 

 

 

Manhattan Associates Reports Record Fourth Quarter and Full Year 2019 Revenue

 

ATLANTA – February 4, 2020 – Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported record total revenue of $152.9 million for the fourth quarter ended December 31, 2019, applying the new revenue recognition standard retrospectively. GAAP diluted earnings per share for Q4 2019 was $0.26 compared to $0.40 in Q4 2018. Non-GAAP adjusted diluted earnings per share for Q4 2019 was $0.40 compared to $0.46 in Q4 2018.

“Q4 was another strong quarter for Manhattan Associates, wrapping up a record revenue year and positioning us well for 2020 and beyond,” said Manhattan Associates president and CEO Eddie Capel.  “The performance of our market-leading innovation and suite of Manhattan Active® omnichannel, inventory and supply chain solutions during a record setting 2019 peak season was a great success with overwhelmingly positive feedback from our customers, giving us further confidence as we progress in our Cloud transition. Importantly, global demand for our Cloud solutions continues to grow from new and existing customers.”

“We remain bullish on the market opportunity that lies ahead, despite continued global macro volatility, as demand for innovative solutions in the retail and supply chain markets has never been greater.  Our focus continues to be on enabling our customers to Push Possible®, while positioning the business for long-term, sustainable growth,” added Mr. Capel.  

FOURTH QUARTER 2019 FINANCIAL SUMMARY:

 

•

Consolidated total revenue was $152.9 million in Q4 2019, compared to $144.4 million in Q4 2018.

 

 

o

Cloud subscription revenue was $15.7 million in Q4 2019, compared to $6.8 million in Q4 2018.

 

 

o

License revenue was $9.2 million in Q4 2019, compared to $13.3 million in Q4 2018.

 

 

 

 

 

o

Service revenue was $86.3 million in Q4 2019, compared to $84.5 million in Q4 2018.

 

 

•

GAAP diluted earnings per share was $0.26 in Q4 2019 compared to $0.40 in Q4 2018.

 

 

•

Adjusted diluted earnings per share, a non-GAAP measure, was $0.40 in Q4 2019, compared to $0.46 in Q4 2018.

 

 

•

GAAP operating income was $25.1 million in Q4 2019, compared to $34.3 million in Q4 2018.

 

 

•

Adjusted operating income, a non-GAAP measure, was $33.4 million in Q4 2019, compared to $39.7 million in Q4 2018.

 

 

•

Cash flow from operations was $34.6 million for Q4 2019, compared to $34.0 million for Q4 2018. Days Sales Outstanding was 61 days at both December 31, 2019, and September 30, 2019.

 

 

•

Cash and investments totaled $110.7 million at December 31, 2019, compared to $113.6 million at September 30, 2019.

 

 

•

During the three months ended December 31, 2019, the Company repurchased 444,852 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $35.0 million. In January 2020, our Board authorized the Company to repurchase up to an aggregate of $50 million of the Company’s common stock.

 

FULL YEAR 2019 FINANCIAL SUMMARY:

 

•

Consolidated total revenue for the twelve months ended December 31, 2019 was a record $617.9 million, compared to $559.2 million for the twelve months ended December 31, 2018.

 

 

o

Cloud subscription revenue was $46.8 million for the twelve months ended December 31, 2019, compared to $23.1 million for the twelve months ended December 31, 2018.

 

 

o

License revenue was $48.9 million for the twelve months ended December 31, 2019, compared to $45.4 million for the twelve months ended December 31, 2018. 

 

 

 

 

 

o

Service revenue was $360.5 million for the twelve months ended December 31, 2019, compared to $329.7 million, for the twelve months ended December 31, 2018.

 

 

•

GAAP diluted earnings per share for the twelve months ended December 31, 2019 was $1.32, compared to $1.58 for the twelve months ended December 31, 2018.  

 

 

•

Adjusted diluted earnings per share a non-GAAP measure, was $1.74 for the twelve months ended December 31, 2019, compared to $1.79 for the twelve months ended December 31, 2018.

 

 

•

GAAP operating income was $115.9 million for the twelve months ended December 31, 2019, compared to $133.9 million for the twelve months ended December 31, 2018.

 

 

•

Adjusted operating income, a non-GAAP measure, was $148.2 million for the twelve months ended December 31, 2019, compared to $154.2 million for the twelve months ended December 31, 2018. 

 

 

•

Cash flow from operations was $146.9 million for the twelve months ended December 31, 2019, compared to $137.3 million for the twelve months ended December 31, 2018.

 

 

•

During the twelve months ended December 31, 2019, the Company repurchased 1,640,055 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $115.9 million.

 


 

 

 

2020 GUIDANCE

Manhattan Associates provides the following revenue, operating margin and diluted earnings per share guidance for the full year 2020:

 

 

 

 

 

Guidance Range - 2020 Full Year

 

 

 

($'s in millions, except operating margin and EPS)

$ Range

 

 

% Growth Range

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

644

 

 

$

656

 

 

4%

 

 

6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

14.6

%

 

 

15.2

%

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

5.4

%

 

 

5.3

%

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin(1)

 

20.0

%

 

 

20.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (EPS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS

$

1.12

 

 

$

1.19

 

 

-15%

 

 

-10%

 

 

 

Equity-based compensation

 

0.47

 

 

 

0.47

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefit on stock vesting(2)

 

(0.06

)

 

 

(0.06

)

 

 

 

 

 

 

 

 

 

 

Adjusted EPS(1)

$

1.53

 

 

$

1.60

 

 

-12%

 

 

-8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-based

 

 

 

   compensation and acquisition-related costs, and the related income tax effects of these items if applicable.

 

 

 

(2) Excess tax benefit on stock vesting expected to occur primarily in the first quarter of 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Manhattan Associates will make its earnings release and published expectations available on its website (www.manh.com). Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance above, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

CONFERENCE CALL

The Company’s conference call regarding its fourth quarter and twelve months ended December 31, 2019 financial results will be held today, February 4, 2020, at 4:30 p.m. Eastern

 

 

 

Time. We invite investors to a live webcast of the conference call through the Investor Relations section of Manhattan Associates' website at www.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software.

Those who cannot listen to the live broadcast may access a replay shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 7226618 or via the web at www.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates’ first quarter 2020 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Company’s historical and projected operating results. These measures are not in accordance with – or alternatives to – GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors’ ability to understand and compare the Company’s results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company’s Form 8-K earnings release filing for the three and twelve months ended December 31, 2019.  

Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation, acquisition-related costs and the amortization of these costs, (from time to time) restructuring charges – all net of income tax effects, and the impact of the enactment of the Tax Cuts and Jobs Act. We include reconciliations of the Company’s GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES

 

 

 

Manhattan Associates is a technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers. 

Manhattan Associates designs, builds and delivers leading edge cloud and on-premise solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

This press release contains “forward-looking statements” relating to Manhattan Associates, Inc.  Forward-looking statements in this press release include, without limitation, the information set forth under “2020 Guidance,” statements we make about market adoption of our cloud-based solution and other statements identified by words such as “may,” “expect,” “forecast,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “project,” “estimate,” and similar expressions.  Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: uncertainty about the global economy, risks related from transitioning our business from a traditional perpetual license software company (generally hosted by our customers on their own premises and equipment) to a subscription-based software-as-a service/cloud-based model, disruption in the retail sector, the possible effect of new U.S. tariffs on imports from other countries (and possible responsive tariffs on U.S. exports by other countries) on international commerce, delays in product development, competitive pressures, software errors, information security breaches and the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

###

 

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

 

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud subscriptions

$

15,721

 

 

$

6,803

 

 

$

46,831

 

 

$

23,104

 

Software license

 

9,234

 

 

 

13,314

 

 

 

48,855

 

 

 

45,368

 

Maintenance

 

38,045

 

 

 

36,466

 

 

 

149,230

 

 

 

147,033

 

Services

 

86,308

 

 

 

84,525

 

 

 

360,516

 

 

 

329,685

 

Hardware

 

3,621

 

 

 

3,258

 

 

 

12,517

 

 

 

13,967

 

Total revenue

 

152,929

 

 

 

144,366

 

 

 

617,949

 

 

 

559,157

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of software license

 

663

 

 

 

682

 

 

 

2,626

 

 

 

5,297

 

Cost of cloud subscriptions, maintenance and services

 

71,190

 

 

 

62,138

 

 

 

282,341

 

 

 

235,584

 

Research and development

 

21,784

 

 

 

18,208

 

 

 

87,608

 

 

 

71,896

 

Sales and marketing

 

15,434

 

 

 

13,843

 

 

 

56,860

 

 

 

51,262

 

General and administrative

 

16,512

 

 

 

13,222

 

 

 

64,603

 

 

 

52,618

 

Depreciation and amortization

 

2,277

 

 

 

1,997

 

 

 

7,987

 

 

 

8,613

 

Total costs and expenses

 

127,860

 

 

 

110,090

 

 

 

502,025

 

 

 

425,270

 

Operating income

 

25,069

 

 

 

34,276

 

 

 

115,924

 

 

 

133,887

 

Other (loss) income, net

 

(215

)

 

 

(901

)

 

 

153

 

 

 

2,344

 

Income before income taxes

 

24,854

 

 

 

33,375

 

 

 

116,077

 

 

 

136,231

 

Income tax provision

 

8,096

 

 

 

7,460

 

 

 

30,315

 

 

 

31,541

 

Net income

$

16,758

 

 

$

25,915

 

 

$

85,762

 

 

$

104,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.26

 

 

$

0.40

 

 

$

1.33

 

 

$

1.58

 

Diluted earnings per share

$

0.26

 

 

$

0.40

 

 

$

1.32

 

 

$

1.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

63,822

 

 

 

65,199

 

 

 

64,397

 

 

 

66,201

 

Diluted

 

64,807

 

 

 

65,526

 

 

 

65,103

 

 

 

66,434

 

 

 

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Reconciliation of Selected GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

25,069

 

 

$

34,276

 

 

$

115,924

 

 

$

133,887

 

Equity-based compensation (a)

 

 

8,195

 

 

 

5,291

 

 

 

31,841

 

 

 

19,864

 

Purchase amortization (c)

 

 

107

 

 

 

108

 

 

 

430

 

 

 

430

 

Adjusted operating income (Non-GAAP)

 

$

33,371

 

 

$

39,675

 

 

$

148,195

 

 

$

154,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

$

8,096

 

 

$

7,460

 

 

$

30,315

 

 

$

31,541

 

Equity-based compensation (a)

 

 

(1,166

)

 

 

1,092

 

 

 

4,627

 

 

 

4,662

 

Tax benefit of stock awards vested (b)

 

 

10

 

 

 

6

 

 

 

156

 

 

 

777

 

Purchase amortization (c)

 

 

28

 

 

 

22

 

 

 

107

 

 

 

101

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

(146

)

 

 

-

 

 

 

202

 

Adjusted income tax provision (Non-GAAP)

 

$

6,968

 

 

$

8,434

 

 

$

35,205

 

 

$

37,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

16,758

 

 

$

25,915

 

 

$

85,762

 

 

$

104,690

 

Equity-based compensation (a)

 

 

9,361

 

 

 

4,199

 

 

 

27,214

 

 

 

15,202

 

Tax benefit of stock awards vested (b)

 

 

(10

)

 

 

(6

)

 

 

(156

)

 

 

(777

)

Purchase amortization (c)

 

 

79

 

 

 

86

 

 

 

323

 

 

 

329

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

146

 

 

 

-

 

 

 

(202

)

Adjusted net income (Non-GAAP)

 

$

26,188

 

 

$

30,340

 

 

$

113,143

 

 

$

119,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

$

0.26

 

 

$

0.40

 

 

$

1.32

 

 

$

1.58

 

Equity-based compensation (a)

 

 

0.14

 

 

 

0.06

 

 

 

0.42

 

 

 

0.23

 

Tax benefit of stock awards vested (b)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.01

)

Purchase amortization (c)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

U.S. Tax Cuts and Jobs Act impact (d)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted diluted EPS (Non-GAAP)

 

$

0.40

 

 

$

0.46

 

 

$

1.74

 

 

$

1.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully diluted shares

 

 

64,807

 

 

 

65,526

 

 

 

65,103

 

 

 

66,434

 

 

(a)

Adjusted results exclude all equity-based compensation, to facilitate comparison with our peers and because it typically does not require cash settlement.  As explained in our Current Report on Form 8-K filed today with the SEC, we do not include this expense when assessing our operating performance.  We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly due to Section 162(m) of the Internal Revenue Code which limits tax deductions for compensation granted to certain executives.  The Tax Cuts and Jobs Act further increased these limitations.  Thus, we have changed from applying an overall effective rate in our tax adjustment to using the actual tax benefit for equity-based compensation included in our GAAP results after considering the impact of non-deductible equity-based compensation.  To effect this change, we have trued up our GAAP to Adjusted tax adjustment for 2019 in the fourth quarter of 2019.

 

 

 

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

$

2,346

 

 

$

1,583

 

 

$

9,298

 

 

$

5,787

 

Research and development

 

 

1,565

 

 

 

1,095

 

 

 

6,126

 

 

 

4,230

 

Sales and marketing

 

 

878

 

 

 

545

 

 

 

3,311

 

 

 

2,041

 

General and administrative

 

 

3,406

 

 

 

2,068

 

 

 

13,106

 

 

 

7,806

 

Total equity-based compensation

 

$

8,195

 

 

$

5,291

 

 

$

31,841

 

 

$

19,864

 

 

(b)

Adjustments represent the excess tax benefits and tax deficiencies of the stock awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible for an award of equity instruments on our tax return is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we excluded equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also excluded the related tax benefit (expense) generated upon their vesting.

 

(c)

Adjustments represent purchased intangibles amortization from a prior acquisition. We exclude that amortization from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC.

 

(d)

In the fourth quarter of 2017, we recorded a provisional net one-time tax of $2.8 million due to the enactment of the Tax Cuts and Jobs Act in December 2017. We calculated that amount based on a reasonable estimate of the income tax effects, primarily from a tax on accumulated foreign earnings and the remeasurement of deferred tax assets. We finalized our calculations, resulting in a tax benefit of $0.2 million during the twelve months ended December 31, 2018.


 

 

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

December 31, 2019

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

110,678

 

 

$

99,126

 

Short-term investments

 

 

-

 

 

 

1,440

 

Accounts receivable, net of allowance of $2,826 and $2,589 at December 31, 2019 and December 31, 2018, respectively

 

 

100,937

 

 

 

100,108

 

Prepaid expenses and other current assets

 

 

20,426

 

 

 

14,708

 

Total current assets

 

 

232,041

 

 

 

215,382

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

22,725

 

 

 

14,318

 

Operating lease right-of-use assets

 

 

35,896

 

 

 

-

 

Goodwill, net

 

 

62,237

 

 

 

62,240

 

Deferred income taxes

 

 

6,814

 

 

 

5,442

 

Other assets

 

 

12,566

 

 

 

9,768

 

Total assets

 

$

372,279

 

 

$

307,150

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

20,561

 

 

$

18,181

 

Accrued compensation and benefits

 

 

45,991

 

 

 

29,485

 

Accrued and other liabilities

 

 

19,325

 

 

 

12,161

 

Deferred revenue

 

 

94,371

 

 

 

81,894

 

Income taxes payable

 

 

1,348

 

 

 

3,543

 

Total current liabilities

 

 

181,596

 

 

 

145,264

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, long-term

 

 

32,416

 

 

 

-

 

Other non-current liabilities

 

 

15,989

 

 

 

14,739

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or

   outstanding at December 31, 2019 and December 31, 2018

 

 

-

 

 

 

-

 

Common stock, $.01 par value; 200,000,000 shares authorized; 63,456,986 and

  64,860,419 shares issued and outstanding at December 31, 2019 and

   December 31, 2018, respectively

 

 

635

 

 

 

649

 

Retained earnings

 

 

159,490

 

 

 

163,359

 

Accumulated other comprehensive loss

 

 

(17,847

)

 

 

(16,861

)

Total shareholders' equity

 

 

142,278

 

 

 

147,147

 

Total liabilities and shareholders' equity

 

$

372,279

 

 

$

307,150

 

 

 

 

 

MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Year Ended December 31,

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

85,762

 

 

$

104,690

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,987

 

 

 

8,613

 

 

Equity-based compensation

 

 

31,841

 

 

 

19,864

 

 

(Gain) loss on disposal of equipment

 

 

(429

)

 

 

59

 

 

Deferred income taxes

 

 

(1,406

)

 

 

(4,265

)

 

Unrealized foreign currency (gain) loss

 

 

(708

)

 

 

298

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(1,065

)

 

 

(9,341

)

 

Other assets

 

 

(8,924

)

 

 

(4,357

)

 

Accounts payable, accrued and other liabilities

 

 

20,812

 

 

 

18,603

 

 

Income taxes

 

 

1,180

 

 

 

(4,390

)

 

Deferred revenue

 

 

11,858

 

 

 

7,575

 

 

Net cash provided by operating activities

 

 

146,908

 

 

 

137,349

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(15,193

)

 

 

(7,306

)

 

Net maturities (purchases) of short-term investments

 

 

1,439

 

 

 

(2,532

)

 

Net cash used in investing activities

 

 

(13,754

)

 

 

(9,838

)

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Purchase of common stock

 

 

(121,487

)

 

 

(149,322

)

 

Net cash used in financing activities

 

 

(121,487

)

 

 

(149,322

)

 

 

 

 

 

 

 

 

 

 

 

Foreign currency impact on cash

 

 

(115

)

 

 

(4,585

)

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

11,552

 

 

 

(26,396

)

 

Cash and cash equivalents at beginning of period

 

 

99,126

 

 

 

125,522

 

 

Cash and cash equivalents at end of period

 

$

110,678

 

 

$

99,126

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

MANHATTAN ASSOCIATES, INC.

SUPPLEMENTAL INFORMATION

1.

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

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

GAAP Diluted EPS

$

0.33

 

 

$

0.42

 

 

$

0.43

 

 

$

0.40

 

 

$

1.58

 

 

$

0.32

 

 

$

0.32

 

 

$

0.42

 

 

$

0.26

 

 

$

1.32

 

Adjustments to GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation

 

0.05

 

 

 

0.06

 

 

 

0.06

 

 

 

0.06

 

 

 

0.23

 

 

 

0.08

 

 

 

0.10

 

 

 

0.09

 

 

 

0.14

 

 

 

0.42

 

Tax benefit of stock awards vested

 

(0.01

)

 

-

 

 

-

 

 

-

 

 

 

(0.01

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Purchase amortization

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

U.S. Tax Cuts and Jobs Act impact

 

(0.01

)

 

-

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted Diluted EPS

$

0.37

 

 

$

0.47

 

 

$

0.49

 

 

$

0.46

 

 

$

1.79

 

 

$

0.41

 

 

$

0.42

 

 

$

0.51

 

 

$

0.40

 

 

$

1.74

 

Fully Diluted Shares

 

67,736

 

 

 

66,535

 

 

 

65,901

 

 

 

65,526

 

 

 

66,434

 

 

 

65,204

 

 

 

65,093

 

 

 

64,992

 

 

 

64,807

 

 

 

65,103

 

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

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Revenue:

 

Americas

$

104,615

 

 

$

112,945

 

 

$

113,886

 

 

$

114,040

 

 

$

445,486

 

 

$

114,873

 

 

$

121,778

 

 

$

132,028

 

 

$

121,155

 

 

$

489,834

 

EMEA

 

19,164

 

 

 

21,356

 

 

 

21,181

 

 

 

23,043

 

 

 

84,744

 

 

 

26,288

 

 

 

25,043

 

 

 

22,978

 

 

 

23,964

 

 

 

98,273

 

APAC

 

6,790

 

 

 

7,570

 

 

 

7,284

 

 

 

7,283

 

 

 

28,927

 

 

 

7,243

 

 

 

7,520

 

 

 

7,269

 

 

 

7,810

 

 

 

29,842

 

 

$

130,569

 

 

$

141,871

 

 

$

142,351

 

 

$

144,366

 

 

$

559,157

 

 

$

148,404

 

 

$

154,341

 

 

$

162,275

 

 

$

152,929

 

 

$

617,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Income:

 

Americas

$

20,318

 

 

$

26,589

 

 

$

26,200

 

 

$

24,422

 

 

$

97,529

 

 

$

18,051

 

 

$

16,826

 

 

$

26,310

 

 

$

17,437

 

 

$

78,624

 

EMEA

 

5,475

 

 

 

6,252

 

 

 

7,413

 

 

 

7,297

 

 

 

26,437

 

 

 

7,734

 

 

 

8,057

 

 

 

6,371

 

 

 

4,772

 

 

 

26,934

 

APAC

 

2,037

 

 

 

2,844

 

 

 

2,483

 

 

 

2,557

 

 

 

9,921

 

 

 

2,491

 

 

 

2,699

 

 

 

2,316

 

 

 

2,860

 

 

 

10,366

 

 

$

27,830

 

 

$

35,685

 

 

$

36,096

 

 

$

34,276

 

 

$

133,887

 

 

$

28,276

 

 

$

27,582

 

 

$

34,997

 

 

$

25,069

 

 

$

115,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (pre-tax):

 

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based

   compensation

$

4,343

 

 

$

4,927

 

 

$

5,303

 

 

$

5,291

 

 

$

19,864

 

 

$

7,182

 

 

$

8,462

 

 

 

8,002

 

 

$

8,195

 

 

$

31,841

 

Purchase amortization

 

107

 

 

 

108

 

 

 

107

 

 

 

108

 

 

 

430

 

 

 

108

 

 

 

107

 

 

 

108

 

 

 

107

 

 

 

430

 

 

$

4,450

 

 

$

5,035

 

 

$

5,410

 

 

$

5,399

 

 

$

20,294

 

 

$

7,290

 

 

$

8,569

 

 

$

8,110

 

 

$

8,302

 

 

$

32,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-GAAP Operating Income:

 

Americas

$

24,768

 

 

$

31,624

 

 

$

31,610

 

 

$

29,821

 

 

$

117,823

 

 

$

25,341

 

 

$

25,395

 

 

$

34,420

 

 

$

25,739

 

 

$

110,895

 

EMEA

 

5,475

 

 

 

6,252

 

 

 

7,413

 

 

 

7,297

 

 

 

26,437

 

 

 

7,734

 

 

 

8,057

 

 

 

6,371

 

 

 

4,772

 

 

 

26,934

 

APAC

 

2,037

 

 

 

2,844

 

 

 

2,483

 

 

 

2,557

 

 

 

9,921

 

 

 

2,491

 

 

 

2,699

 

 

 

2,316

 

 

 

2,860

 

 

 

10,366

 

 

$

32,280

 

 

$

40,720

 

 

$

41,506

 

 

$

39,675

 

 

$

154,181

 

 

$

35,566

 

 

$

36,151

 

 

$

43,107

 

 

$

33,371

 

 

$

148,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

Impact of Currency Fluctuation

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Revenue

$

2,781

 

 

$

1,699

 

 

$

(581

)

 

$

(1,068

)

 

$

2,831

 

 

$

(2,419

)

 

$

(1,906

)

 

$

(1,352

)

 

$

(670

)

 

$

(6,347

)

Costs and expenses

 

2,328

 

 

 

831

 

 

 

(1,177

)

 

 

(1,774

)

 

 

208

 

 

 

(2,686

)

 

 

(1,696

)

 

 

(988

)

 

 

(346

)

 

 

(5,716

)

Operating income

 

453

 

 

 

868

 

 

 

596

 

 

 

706

 

 

 

2,623

 

 

 

267

 

 

 

(210

)

 

 

(364

)

 

 

(324

)

 

 

(631

)

Foreign currency gains (losses) in other income

 

366

 

 

 

705

 

 

 

1,431

 

 

 

(1,185

)

 

 

1,317

 

 

 

(590

)

 

 

(377

)

 

 

298

 

 

 

(325

)

 

 

(994

)

 

$

819

 

 

$

1,573

 

 

$

2,027

 

 

$

(479

)

 

$

3,940

 

 

$

(323

)

 

$

(587

)

 

$

(66

)

 

$

(649

)

 

$

(1,625

)

 


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

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Operating income

$

(360

)

 

$

359

 

 

$

828

 

 

$

1,066

 

 

$

1,893

 

 

$

981

 

 

$

438

 

 

$

51

 

 

$

(140

)

 

$

1,330

 

Foreign currency gains (losses) in other

income

 

210

 

 

 

1,120

 

 

 

1,572

 

 

 

(1,074

)

 

 

1,828

 

 

 

(182

)

 

 

(127

)

 

 

437

 

 

 

284

 

 

 

412

 

Total impact of

   changes in the

   Indian Rupee

$

(150

)

 

$

1,479

 

 

$

2,400

 

 

$

(8

)

 

$

3,721

 

 

$

799

 

 

$

311

 

 

$

488

 

 

$

144

 

 

$

1,742

 

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

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Interest income

$

347

 

 

$

241

 

 

$

201

 

 

$

278

 

 

$

1,067

 

 

$

231

 

 

$

178

 

 

$

191

 

 

$

115

 

 

$

715

 

Foreign currency gains

   (losses)

 

366

 

 

 

705

 

 

 

1,431

 

 

 

(1,185

)

 

 

1,317

 

 

 

(590

)

 

 

(377

)

 

 

298

 

 

 

(325

)

 

 

(994

)

Other non-operating

   income (expense)

 

8

 

 

 

40

 

 

 

(94

)

 

 

6

 

 

 

(40

)

 

 

(12

)

 

 

128

 

 

 

321

 

 

 

(5

)

 

 

432

 

Total other income (loss)

$

721

 

 

$

986

 

 

$

1,538

 

 

$

(901

)

 

$

2,344

 

 

$

(371

)

 

$

(71

)

 

$

810

 

 

$

(215

)

 

$

153

 

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

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Capital expenditures

$

2,174

 

 

$

1,881

 

 

$

1,481

 

 

$

1,770

 

 

$

7,306

 

 

$

616

 

 

$

2,689

 

 

$

8,053

 

 

$

3,835

 

 

$

15,193

 

 

 

 

6.

Stock Repurchase Activity (in thousands):

 

 

2018

 

 

2019

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

 

1st Qtr

 

 

2nd Qtr

 

 

3rd Qtr

 

 

4th Qtr

 

 

Full Year

 

Shares purchased under publicly-announced buy-back program

 

1,158

 

 

 

1,082

 

 

 

389

 

 

 

519

 

 

 

3,148

 

 

 

464

 

 

 

302

 

 

 

429

 

 

 

445

 

 

 

1,640

 

Shares withheld for taxes due upon vesting of restricted stock

 

111

 

 

 

1

 

 

 

3

 

 

 

-

 

 

 

115

 

 

 

106

 

 

 

1

 

 

 

4

 

 

 

1

 

 

 

112

 

Total shares purchased

 

1,269

 

 

 

1,083

 

 

 

392

 

 

 

519

 

 

 

3,263

 

 

 

570

 

 

 

303

 

 

 

433

 

 

 

446

 

 

 

1,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash paid for shares purchased under publicly-announced buy-back program

$

49,972

 

 

$

47,876

 

 

$

20,669

 

 

$

24,757

 

 

$

143,274

 

 

$

24,927

 

 

$

19,993

 

 

$

35,955

 

 

$

34,992

 

 

$

115,867

 

Total cash paid for shares withheld for taxes due upon vesting of restricted stock

 

5,843

 

 

 

23

 

 

 

175

 

 

 

7

 

 

 

6,048

 

 

 

5,233

 

 

 

85

 

 

 

266

 

 

 

36

 

 

 

5,620

 

Total cash paid for shares repurchased

$

55,815

 

 

$

47,899

 

 

$

20,844

 

 

$

24,764

 

 

$

149,322

 

 

$

30,160

 

 

$

20,078

 

 

$

36,221

 

 

$

35,028

 

 

$

121,487

 

 

7. Remaining Performance Obligations

Under the new revenue recognition standard, we now disclose revenue we expect to recognize from our remaining performance obligations. Our reported performance obligations primarily represent cloud subscriptions with a non-cancelable term greater than one year (including cloud deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Our deferred revenue on the balance sheet primarily relates to our maintenance contracts, which are typically one year in duration and are not included in the remaining performance obligations.  Below are our remaining performance obligations as of the end of each period (in thousands):

 

 

December 31, 2018

 

 

March 31, 2019

 

 

June 30, 2019

 

 

September 30, 2019

 

 

December 31, 2019

 

Remaining Performance Obligations

$

76,990

 

 

$

100,532

 

 

$

120,403

 

 

$

152,043

 

 

$

171,665