Kurt Peters , Senior Executive Editor
ATLANTA, Feb. 7 -- Manhattan Associates, Inc., (Nasdaq: MANH), the global leader in extended supply chain execution solutions, today announced adjusted earnings of $0.20 per fully diluted share, which excludes the after-tax effects of the amortization of acquisition-related intangibles and the unusual allowance against revenues from Kmart Corporation (the "Kmart allowance") due to their January 22, 2002 filing under Chapter 11 of the U.S. Bankruptcy Code. Excluding the impact of the Kmart allowance, Manhattan Associates posted year- over-year increases in both its earnings and core revenue drivers of software license fees and services fees.
Excluding the Kmart allowance for the fourth quarter ended December 31, 2001: revenue was a record $45.0 million, an increase of 23% from revenue of $36.4 million for the fourth quarter ended December 31, 2000; software fees were $9.0 million compared to $8.9 million for the fourth quarter of 2000; services revenue was a record $25.4 million, an increase of 10% over the fourth quarter of 2000; and hardware revenue was $10.5 million, an increase of 140% from hardware revenue of $4.4 million for the fourth quarter of 2000.
Excluding the Kmart allowance and the amortization of acquisition-related intangibles for the fourth quarter ended December 31, 2001, adjusted net income for the quarter ended December 31, 2001 increased to a record $6.1 million or $0.20 per fully diluted share.
Excluding the Kmart allowance and the amortization of acquisition-related intangibles for the year ended December 31, 2001: revenue was $155.6 million, an increase of 17% from revenue of $133.1 million; and core revenue drivers, which does not include hardware, were $132.9 million, an increase of 24% over the year 2000. For the year ended December 31, 2001, adjusted net income was $22.2 million or $0.72 per fully diluted share, as compared to adjusted net income of $18.9 million or $0.62 per fully diluted share for the year ended December 31, 2000.
Including the Kmart allowance and the amortization of acquisition-related intangibles for the fourth quarter ended December 31, 2001: revenue was $40.6 million, an increase of 12% over the fourth quarter of 2000; and net income was $2.5 million or $0.08 per fully diluted share. Including the Kmart allowance, the amortization of acquisition-related intangibles and the write off of R&D; (in 2000) for the year ended December 31, 2001: revenue was $151.3 million, an increase of 14% over the prior year; and net income was $16.2 million or $0.53 per fully diluted share, the same as 2000.
As of January 22, 2002, the amounts due from Kmart were approximately $5.3 million, including approximately $4.3 million related to 2001. As a result, the Company recorded an allowance of $4.3 million against revenues in the fourth quarter that resulted in an after-tax reduction to net income of $2.7 million for the fourth quarter and year ended December 31, 2001.
"Overall, we are very pleased with our results this quarter. Despite the negative impact of our Kmart exposure, the results are evidence of our financial health and our ability to continue to execute and lead in this marketplace," said Manhattan Associates President and CEO Richard Haddrill.
Other key quarterly and year-end highlights for Manhattan Associates include:
* Cash and short-term investments increased by $10 million, or 11%, during the quarter to $104.2 million. Cash and short-term investments have increased $36.5 million, or 54%, since the beginning of 2001.
* Days Sales Outstanding (DSO), excluding the effect of the $4.3 million allowance for the Kmart revenues, declined to 63 days at December 31, 2001, down from 67 days at September 30, 2001 and 71 days at December 31, 2000, reflecting the general health of accounts receivable and overall customer satisfaction.
* International revenue for the year ended December 31, 2001 was $26.1 million as compared to $14.9 million for the year ended December 31, 2000, representing an increase of 75%. Manhattan Associates now has an international headcount of approximately 100.
* Signed key new customers in the quarter including Deschenes Group, Sara Lee Food Companies, Wolverine Worldwide, Inc., and American Italian Pasta Company.
* Manhattan Associates continued to further its partnership with many existing clients, including Cost Plus and Foot Locker, Inc.
* Signed four new PkMS Pronto customers in the quarter including Buyers Products Company, Mary Meyer Corporation and Langham, which brings the total number of Pronto customers to 13.
* Signed five new MA Collaborate customers, including Corporate Express and Wincanton Logistics, which brings the total number of infolink customers to 25.
* Completed the professional translation of the Company`s flagship product PkMS into Japanese, Spanish, German and French and released a fully Unicode solution to support global customers demanding both single-byte and multi-byte language sets configured at the user.
* Established a center of expertise (COE) in Utrecht, The Netherlands, which has capacity for 80 employees. The Company anticipates opening additional offices in Germany and France in Q3 and Q4 of 2002.
* Announced the formation of a representative office in Japan, which marks the Company`s formal entrance into the Japanese market. Located in Tokyo, the center of expertise (COE) will provide support for Manhattan Associates` customers and partners in Japan and also support the Company`s continued investments in Australia and Asia-Pacific.
Business Outlook for 2001
Manhattan Associates currently intends to publish in each quarterly earnings release its expectations for the next quarter and the related fiscal year with respect to revenues and earnings per share. The following statements regarding revenues and earnings are based on current expectations. These statements are forward-looking. Actual results may differ materially, especially in an uncertain economic environment. These statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of this release.
Manhattan Associates will make its earnings release and published expectations available on its Web site (www.manh.com ). Beginning March 15, 2002, Manhattan Associates will observe a "Quiet Period" during which Manhattan Associates and its representatives will not comment concerning previously published financial expectations. Prior to the start of the Quiet Period, the public can continue to rely on the expectations published in this Business Outlook section as still being Manhattan Associates` current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. The public should not rely on previously published expectations during the Quiet Period, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until the date when Manhattan Associates` next quarterly earnings release is published, presently scheduled for the third or fourth week of April 2002.
For the fiscal year ending December 31, 2002, Manhattan Associates currently expects to achieve adjusted earnings in the range of $0.83 to $0.93 per fully diluted share. For the quarter ending March 31, 2002, Manhattan Associates currently expects to achieve adjusted earnings in the range of $0.17 to $0.20 per fully diluted share. These expectations assume that the current general economic environment will improve modestly over the balance of the year.
About Manhattan Associates, Inc.
Manhattan Associates, Inc., is the global leader in providing extended supply chain execution solutions. We enable operational excellence through real-time collaboration, execution and optimization. Our solutions leverage state-of-the-art technologies, innovative practices and our domain expertise to enhance performance, profitability and competitive advantage. Manhattan Associates has licensed more than 800 customers representing 1,100 facilities worldwide, which include some of the world`s leading manufacturers, distributors and retailers. For more information about Manhattan Associates telephone 770.955.7070 or visit www.manh.com
This press release may contain "forward-looking statements" relating to Manhattan Associates, Inc. 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 delays in product development, undetected software errors, competitive pressures, technical difficulties, market acceptance, availability of technical personnel, changes in customer requirements and general economic conditions. Additional factors are set forth in "Safe Harbor Compliance Statement for Forward-Looking Statements" included as Exhibit 99.1 to the Company`s Annual Report on Form 10-K for the year ended December 31,2000. 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.