Manhattan Associates Announces Financial Results for the Fourth Quarter of 2005

Record Software Fees of $16.1 Million for the Quarter Push Manhattan Associates to $246 Million in Annual Revenue

ATLANTA - February 7, 2006 - Leading supply chain solutions provider, Manhattan Associates®, Inc. (NASDAQ: MANH), today announced results for the fourth quarter ended December 31, 2005.

Key financial highlights for Manhattan Associates include:

• Software and hosting fees for the quarter ended December 31, 2005, were a record $16.1 million, an increase of 19% over the fourth quarter of 2004;
• Services revenue for the quarter ended December 31, 2005, was a record $43.8 million, an increase of 26% over the fourth quarter of 2004;
• Total revenue for the quarter ended December 31, 2005, was a record $66.4 million, an increase of 19% over the fourth quarter of 2004;
• Adjusted earnings per share for the quarter ended December 31, 2005, was $0.24 per share;
• Repurchased 876,000 shares of Manhattan Associates` common stock during the quarter ended December 31, 2005, at an average price of $22.47 per share, totaling approximately $20 million.

Restatement:

We recently became aware of certain tax accounting issues related to prior years which we and our auditors believe require the restatement of our previously issued financial statements for the years ended December 31, 1999 through December 31, 2004. Net income in those years was overstated by a total of approximately $7 million resulting primarily from not filing an election to change the method of computing our research and development income tax credit in 1998 following a small acquisition and for not providing the appropriate liability for transaction taxes in certain states. Although it is possible to recover some, if not all, of the lost tax credits through a retroactive relief request from the Internal Revenue Service and some of the transaction taxes from our customers who contractually agreed to be responsible for these taxes, the amount of recovery cannot be estimated precisely and collection is not considered probable. Any future recapture of the lost tax credits or collection of transaction taxes from our customers will be recorded as a reduction to expense in the period received and included in U.S. GAAP earnings per share. All U.S. GAAP amounts included herein reflect the restated amounts.

The previously reported quarterly adjusted earnings per share amounts announced in 2005 remain unchanged.

Adjusted earnings per share is defined herein as net earnings per share according to accounting principles generally accepted in the United States of America, excluding the impact of certain items, if applicable in that period, including acquisition-related costs and the amortization thereof, the recapture of previously recognized transaction tax expense, stock option expense under FAS 123R and the severance and accounts receivable charge recorded in Q2 of 2005, all net of income taxes.

GAAP net income was $5.7 million or $0.20 per fully diluted share for the fourth quarter of 2005 compared to $4.5 million or $0.15 per fully diluted share for the fourth quarter of 2004.

Adjusted net income for the fourth quarter of 2005 was $6.7 million, or $0.24 per fully diluted share. Adjusted net income for the fourth quarter of 2004 was $5.1 million, or $0.17 per fully diluted share.

For the year ended December 31, 2005, total revenue was a record $246.4 million, increasing 15% over the prior year. Software and hosting fees for the year totaled $57.1 million, an increase of 14% over 2004 and services revenues totaled $166.1 million, an increase of 17% compared with the prior year. GAAP net income was $18.6 million, or $0.64 per fully diluted share for the year ended December 31, 2005, compared with GAAP net income of $21.6 million, or $0.70 per fully diluted share for the year ended December 31, 2004. Adjusted net income for the year ended December 31, 2005 was $25.7 million, or $0.88 per fully diluted share compared to $23.8 million, or $0.77 per fully diluted share for the year ended December 31, 2004.

The company provides adjusted net income and adjusted net income per share in the press release as additional information of its operating results. The measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP net income and non-GAAP per share measures used by other companies. The company believes that this presentation of adjusted net income and adjusted net income per share provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations.

Overall I am pleased with our fourth quarter results, said Pete Sinisgalli, president and CEO of Manhattan Associates. Our revenue and earnings results were solid and we continued to capture market share in the markets we serve. Our complete Supply Chain Management offering is gaining momentum and I look forward to building on our successes in 2006.

Other key highlights for Manhattan Associates include the following: