Contact:

Linda Pinne

Beverly McDonald

Interim Chief Financial Officer

Senior Director, Corporate Marketing

Chief Accounting Officer

Manhattan Associates, Inc.

Manhattan Associates, Inc.

678-597-6528

770-955-7070

bmcdonald@manh.com

lpinne@manh.com

·

GAAP diluted earnings per share was $0.46 in Q2 2016, compared to $0.35 in Q2 2015.

·

Adjusted diluted earnings per share, a non-GAAP measure, was $0.49 in Q2 2016, compared to $0.37 in Q2 2015.

·

Consolidated total revenue was $154.9 million in Q2 2016, compared to $139.1 million in Q2 2015. License revenue was $20.6 million in Q2 2016, compared to $19.8 million in Q2 2015.

·

GAAP operating income was $52.3 million in Q2 2016, compared to $41.4 million in Q2 2015.

·

Adjusted operating income, a non-GAAP measure, was $55.9 million in Q2 2016, compared to $44.1 million in Q2 2015. 

·

Cash flow from operations was $19.1 million in Q2 2016, compared to $27.5 million in Q2 2015. Days Sales Outstanding was 55 days at June 30, 2016, compared to 51 days at March 31, 2016.

·

Cash and investments totaled $95.2 million at June 30, 2016, compared to $114.7 million at March 31, 2016.

·

During the three months ended June 30, 2016, the Company repurchased 551,323 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $35.0 million. In July 2016, the Board of Directors approved raising the Company's share repurchase authority to an aggregate of $50.0 million of the Company’s outstanding common stock.

·

GAAP diluted earnings per share for the six months ended June 30, 2016, was a record $0.84, compared to $0.66 for the six months ended June 30, 2015.  

·

Adjusted diluted earnings per share, a non-GAAP measure, was a record $0.91 for the six months ended June 30, 2016, compared to $0.71 for the six months ended June 30, 2015.

·

Consolidated revenue for the six months ended June 30, 2016, was a record $304.8 million, compared to $272.6 million for the six months ended June 30, 2015. License revenue was a record $41.2 million for the six months ended June 30, 2016, compared to $39.1 million for the six months ended June 30, 2015.  

·

GAAP operating income was a record $95.4 million for the six months ended June 30, 2016, compared to $78.2 million for the six months ended June 30, 2015.

·

Adjusted operating income, a non-GAAP measure, was a record $103.8 million for the six months ended June 30, 2016, compared to $84.2 million for the six months ended June 30, 2015. 

·

Cash flow from operations was a record $59.5 million in the six months ended June 30, 2016, compared to $42.7 million in the six months ended June 30, 2015. 

·

During the six months ended June 30, 2016, the Company repurchased 1,443,606 shares of Manhattan Associates common stock under the share repurchase program authorized by the Board of Directors, for a total investment of $83.5 million.

·

Recognized license revenue of $1.0 million or more on three new contracts during Q2 2016.

·

Completed software license wins with new customers such as: Castlery, C&A Marketing, Guangzhou ZSY Pharmaceutical, Skye Group, Tommy Bahama, Uniform Advantage and Yogya Group.

·

Expanded relationships with existing customers such as: Alliance Healthcare, Antalis, Avon Products, Big Lots, Bodega Latina, Buyers Product Company,  Cabela’s, Casella Wines, Christian Dior Perfumes, Copernica, Dalepak, Fanatics, Feld Entertainment, Floor and Decor, Forever Direct, Gazal, GENCO, Harris Teeter, Hy-Vee, IEH Auto Parts, Kane Warehousing, Kuehne + Nagel, Letco Medical, Leroy Merlin Italia, National Logistics Services, Ozburn-Hessey Logistics, Paragon Industries, RedMart, Reyes Holdings, Safeway, Swift Transportation Company, The Hillman Group, Total Sweeteners, UPS Supply Chain Management, Weldom, West Coast Distribution, WesTrac and Wineworks.

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Revenue:

Software license

$

20,631

$

19,758

$

41,238

$

39,072

Services

119,833

107,344

236,096

208,547

Hardware and other

14,428

12,007

27,418

25,013

Total revenue

154,892

139,109

304,752

272,632

Costs and expenses:

Cost of license

2,283

2,137

5,435

5,043

Cost of services

48,393

46,464

100,297

91,248

Cost of hardware and other

11,841

10,163

21,598

20,710

Research and development

13,458

13,257

28,164

26,813

Sales and marketing

12,015

11,889

24,603

23,736

General and administrative

12,368

11,927

24,816

23,165

Depreciation and amortization

2,266

1,898

4,472

3,679

Total costs and expenses

102,624

97,735

209,385

194,394

Operating income

52,268

41,374

95,367

78,238

Other income, net

654

359

1,174

621

Income before income taxes

52,922

41,733

96,541

78,859

Income tax provision

19,581

15,729

35,720

29,651

Net income

$

33,341

$

26,004

$

60,821

$

49,208

Basic earnings per share

$

0.46

$

0.35

$

0.84

$

0.67

Diluted earnings per share

$

0.46

$

0.35

$

0.84

$

0.66

Weighted average number of shares:

Basic

71,880

73,618

72,264

73,797

Diluted

72,228

74,126

72,633

74,366

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Operating income

$

52,268

$

41,374

$

95,367

$

78,238

Equity-based compensation (a)

3,495

2,661

8,183

5,739

Purchase amortization (b)

108

106

215

212

Adjusted operating income (Non-GAAP)

$

55,871

$

44,141

$

103,765

$

84,189

Income tax provision

$

19,581

$

15,729

$

35,720

$

29,651

Equity-based compensation (a)

1,294

1,004

3,028

2,158

Purchase amortization (b)

39

40

79

80

Adjusted income tax provision (Non-GAAP)

$

20,914

$

16,773

$

38,827

$

31,889

Net income

$

33,341

$

26,004

$

60,821

$

49,208

Equity-based compensation (a)

2,201

1,657

5,155

3,581

Purchase amortization (b)

69

66

136

132

Adjusted net income (Non-GAAP)

$

35,611

$

27,727

$

66,112

$

52,921

Diluted EPS

$

0.46

$

0.35

$

0.84

$

0.66

Equity-based compensation (a)

0.03

0.02

0.07

0.05

Purchase amortization (b)

-

-

-

-

Adjusted diluted EPS (Non-GAAP)

$

0.49

$

0.37

$

0.91

$

0.71

Fully diluted shares

72,228

74,126

72,633

74,366

(a)

Adjusted results exclude all equity-based compensation, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC on the date hereof. Equity-based compensation is included in the following GAAP operating expense lines for the three and six months ended June 30, 2016 and 2015:

Three Months Ended June 30,

Six Months Ended June 30,

2016

2015

2016

2015

Cost of services

$

868

$

729

$

2,147

$

1,520

Research and development

620

464

1,374

928

Sales and marketing

595

489

1,280

880

General and administrative

1,412

979

3,382

2,411

Total equity-based compensation

$

3,495

$

2,661

$

8,183

$

5,739

(b)

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

June 30, 2016

December 31, 2015

(unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

93,135

$

118,416

Short-term investments

2,076

10,344

Accounts receivable, net of allowance of $4,359 and $7,031, respectively

92,998

97,379

Prepaid expenses and other current assets

11,761

10,772

Total current assets

199,970

236,911

Property and equipment, net

20,861

21,176

Goodwill, net

62,235

62,233

Deferred income taxes

3,699

4,648

Other assets

7,111

7,275

Total assets

$

293,876

$

332,243

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

11,546

$

11,219

Accrued compensation and benefits

19,653

29,284

Accrued and other liabilities

13,231

13,853

Deferred revenue

63,913

68,757

Income taxes payable

1,762

4,072

Total current liabilities

110,105

127,185

Other non-current liabilities

8,789

9,566

Shareholders' equity:

Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2016 and 2015

-

-

Common stock, $0.01 par value; 200,000,000 shares authorized; 71,604,493 and 72,766,383 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively

716

728

Retained earnings

188,362

207,070

Accumulated other comprehensive loss

(14,096

)

(12,306

)

Total shareholders' equity

174,982

195,492

Total liabilities and shareholders' equity

$

293,876

$

332,243

Six Months Ended June 30,

2016

2015

(unaudited)

(unaudited)

Operating activities:

Net income

$                  60,821

$                    49,208

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

Depreciation and amortization

4,472

3,679

Equity-based compensation

8,183

5,739

Loss (Gain) on disposal of equipment

14

(38)

Tax benefit of stock awards exercised/vested

5,069

7,848

Excess tax benefits from equity-based compensation

(5,074)

(7,825)

Deferred income taxes

950

1,216

Unrealized foreign currency (gain) loss

(403)

117

Changes in operating assets and liabilities:

Accounts receivable, net

4,113

3,002

Other assets

(1,124)

(97)

Accounts payable, accrued and other liabilities

(10,624)

(13,296)

Income taxes

(2,313)

(5,428)

Deferred revenue

(4,577)

(1,437)

Net cash provided by operating activities

59,507

42,688

Investing activities:

Purchase of property and equipment

(4,107)

(5,769)

Net maturities of investments

8,113

447

Net cash provided by (used in) investing activities

4,006

(5,322)

Financing activities:

Purchase of common stock

(92,812)

(61,330)

Proceeds from issuance of common stock from options exercised

18

535

Excess tax benefits from equity-based compensation

5,074

7,825

Net cash used in financing activities

(87,720)

(52,970)

Foreign currency impact on cash

(1,074)

52

Net change in cash and cash equivalents

(25,281)

(15,552)

Cash and cash equivalents at beginning of period

118,416

115,708

Cash and cash equivalents at end of period

$                  93,135

$                  100,156

1.

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

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

GAAP Diluted EPS

$

0.31

$

0.35

$

0.38

$

0.36

$

1.40

$

0.38

$

0.46

$

0.84

Adjustments to GAAP:

Equity-based

   compensation

0.03

0.02

0.05

0.03

0.12

0.04

0.03

0.07

Purchase amortization

-

-

-

-

-

-

-

-

Adjusted Diluted EPS

$

0.34

$

0.37

$

0.42

$

0.39

$

1.52

$

0.42

$

0.49

$

0.91

Fully Diluted Shares

74,607

74,126

73,761

73,555

74,038

73,020

72,228

72,633

2.

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

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Revenue:

Americas

$

109,959

$

117,154

$

120,118

$

117,245

$

464,476

$

128,807

$

131,018

$

259,825

EMEA

18,305

17,175

16,829

17,767

70,076

15,686

18,185

33,871

APAC

5,259

4,780

5,357

6,423

21,819

5,367

5,689

11,056

$

133,523

$

139,109

$

142,304

$

141,435

$

556,371

$

149,860

$

154,892

$

304,752

GAAP Operating Income:

Americas

$

30,182

$

36,214

$

36,407

$

31,020

$

133,823

$

37,454

$

44,126

$

81,580

EMEA

5,522

4,516

5,909

6,363

22,310

4,439

6,854

11,293

APAC

1,160

644

1,364

2,145

5,313

1,206

1,288

2,494

$

36,864

$

41,374

$

43,680

$

39,528

$

161,446

$

43,099

$

52,268

$

95,367

Adjustments (pre-tax):

Americas:

Equity-based

   compensation

$

3,078

$

2,661

$

5,348

$

3,441

$

14,528

$

4,688

$

3,495

$

8,183

Purchase amortization

106

106

113

107

432

107

108

215

$

3,184

$

2,767

$

5,461

$

3,548

$

14,960

$

4,795

$

3,603

$

8,398

Adjusted non-GAAP

   Operating Income:

Americas

$

33,366

$

38,981

$

41,868

$

34,568

$

148,783

$

42,249

$

47,729

$

89,978

EMEA

5,522

4,516

5,909

6,363

22,310

4,439

6,854

11,293

APAC

1,160

644

1,364

2,145

5,313

1,206

1,288

2,494

$

40,048

$

44,141

$

49,141

$

43,076

$

176,406

$

47,894

$

55,871

$

103,765

3.

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

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Professional services

$

72,659

$

76,548

$

80,994

$

74,423

$

304,624

$

84,506

$

86,992

$

171,498

Customer support and

   software enhancements

28,544

30,796

31,555

32,559

123,454

31,757

32,841

64,598

Total services revenue

$

101,203

$

107,344

$

112,549

$

106,982

$

428,078

$

116,263

$

119,833

$

236,096

4.

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

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Hardware revenue

$

7,730

$

7,080

$

5,462

$

9,243

$

29,515

$

8,761

$

9,554

$

18,315

Billed travel

5,276

4,927

5,163

4,797

20,163

4,229

4,874

9,103

Total hardware and

   other revenue

$

13,006

$

12,007

$

10,625

$

14,040

$

49,678

$

12,990

$

14,428

$

27,418

5.

Impact of Currency Fluctuation

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Revenue

$

(3,426

)

$

(3,599

)

$

(3,421

)

$

(2,263

)

$

(12,709

)

$

(810

)

$

(474

)

$

(1,284

)

Costs and expenses

(2,546

)

(3,201

)

(2,820

)

(2,058

)

(10,625

)

(1,292

)

(702

)

(1,994

)

Operating income

(880

)

(398

)

(601

)

(205

)

(2,084

)

482

228

710

Foreign currency (losses)

   gains in other income

(86

)

(4

)

213

(199

)

(76

)

165

331

496

$

(966

)

$

(402

)

$

(388

)

$

(404

)

$

(2,160

)

$

647

$

559

$

1,206

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Operating income

$

72

$

468

$

571

$

492

$

1,603

$

682

$

459

$

1,141

Foreign currency gains

   (losses) in other income

45

182

423

2

652

(109

)

212

103

Total impact of changes

   in the Indian Rupee

$

117

$

650

$

994

$

494

$

2,255

$

573

$

671

$

1,244

6.

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

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Interest income

$

324

$

335

$

336

$

336

$

1,331

$

335

$

329

$

664

Foreign currency (losses)

   gains

(86

)

(4

)

213

(199

)

(76

)

165

331

496

Other non-operating

   income (expense)

24

28

55

33

140

20

(6

)

14

Total other income (loss)

$

262

$

359

$

604

$

170

$

1,395

$

520

$

654

$

1,174

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Capital expenditures

$

3,098

$

2,671

$

3,850

$

1,873

$

11,492

$

1,906

$

2,201

$

4,107

8.

Stock Repurchase Activity (in thousands):

2015

2016

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Full Year

1st Qtr

2nd Qtr

YTD

Shares purchased under

   publicly-announced

   buy-back program

524

458

399

340

1,721