Kurt Peters , Executive Editor
Software Fees Increase 20%, Marking the Tenth Consecutive Quarter of Meeting or Exceeding Consensus Earnings Per Share Estimates
ATLANTA, April 24 -- Manhattan Associates, Inc., (Nasdaq: MANH), the global leader in extended supply chain execution solutions, today announced record results for the first quarter ended March 31, 2002. These results mark the tenth consecutive quarter Manhattan Associates has met or exceeded the First Call consensus earnings per share estimates of the financial analysts covering the Company.
For the quarter ended March 31, 2002, software fees were a record $9.4 million, representing increases of 20% and 4% over the first and fourth quarters of 2001, respectively. Services revenue was a record $26.4 million, representing increases of 12% and 4% over the first and fourth quarters of 2001, respectively. Total revenue was a record $42.1 million, an increase of 13% over revenue of $37.3 million for the quarter ended March 31, 2001.
Net income was $5.5 million or $.18 per fully diluted share for the first quarter ended March 31, 2002, as compared to net income of $4.3 million or $.14 per fully diluted share for the first quarter of 2001. Excluding the amortization of acquisition-related intangible assets, net income was $5.8 million or $0.19 per fully diluted share for the first quarter ended March 31, 2002, as compared to net income, excluding the amortization of acquisition- related intangible assets, of $5.1 million or $0.17 per fully diluted share for the first quarter of 2001.
"We posted another strong performance this quarter, despite a business environment that remains challenging. Our ability to execute as a team and the tremendous individual efforts of our employees continue to propel us forward and further cement our leadership position in the extended supply chain execution market. We are extremely pleased with our results and remain excited about our future," said Manhattan Associates President and CEO Richard Haddrill.
Other key quarterly highlights for Manhattan Associates include:
* Cash and short-term investments continued to grow, increasing by $9.7 million, or 9%, during the quarter to $113.9 million.
* Days Sales Outstanding (DSOs) remained strong at 65 days.
* International revenue from software and services for the quarter ended March 31, 2002 was $6.4 million, representing 18% of revenue from our core business drivers and growth of 15% over the quarter ended March 31, 2001. We announced our expansion into Japan, which is being led by Alan Dabbiere, chairman and principal founder.
* Key new customers that signed in the quarter include The Columbia House Company; Discount Drug Mart, Inc.; Ingram Book Company; Olympus America, Inc.; Promax Automotive; Recreational Equipment, Inc.; South Marston DC Ltd.; TNT Logistics; and VoiceStream Wireless Corporation.
* Signed six new infolink customers, including BALI, a division of Sara Lee Corporation; Burberry Ltd.; Chico`s FAS, Inc.; The Hillman Group; South Marston DC Ltd.; and TNT Logistics. The total number of infolink customers now stands at 31.
* Manhattan Associates continued to further its partnership with many existing clients, including The Children`s Place, Jones Apparel, Russ Berrie and Tone Brothers.
* Sales of our optimization and collaboration products represented approximately 28% of software fees for the quarter, including our largest stand-alone optimization and collaboration sale to date.
* Announced plans for enhanced, comprehensive yard management functionality to augment PkMS. Designed for large customers with extensive distribution operations, this new functionality provides the user with the ability to manage inventory and orders even before the formal receiving process.
* Released Logistics PRO(R) 7.0, an enhanced version of Manhattan Associates` leading transportation management system. Logistics PRO 7.0 provides companies with recent requirements for such major carriers as Airborne, FedEx Home and FedEx Ground, as well as additional Canadian carrier support. Additionally, the new release includes a Carrier Compliance Toolkit that helps companies to easily adapt to the individual needs of smaller carriers.
* Announced a worldwide strategic marketing alliance with JDA Software Group, Inc., the leading global provider of integrated software and professional services to retailers and their suppliers. Under the terms of the agreement, Manhattan Associates and JDA will develop, maintain and support a standard tool set to ensure ease of integration between the two companies` solutions, and the companies will share and assist each other in prospective sales opportunities.
* Announced a corporate alliance agreement with FKI Logistex (London: FKI.L), a global automated material handling equipment firm. Under the alliance both companies will jointly create and support a standard toolset that will enhance the integration between Manhattan Associates` PkMS offering and FKI Logistex`s order processing and warehouse control systems (WCS) for the companies` joint customers.
* Announced a joint marketing and business development alliance with Sun Microsystems, Inc. that will enable the Company`s extended supply chain execution solutions to run within Sun`s Solaris(TM) Operating Environment.
* We continued forward, at Kmart`s request, with the implementation of PkMS as an integral part of Kmart`s supply chain improvement initiatives receiving payment for our post-bankruptcy services in ordinary course.
Change in Auditors
The Company also announced today that its board of directors has appointed Ernst & Young LLP as the Company`s independent accountants for 2002. "We look forward to working with Ernst & Young in the firm`s new role as our independent accountants," said Manhattan Associates CFO Tom Williams.
Prior to the selection of Ernst & Young, Arthur Andersen LLP had served as the company`s independent accountants. The decision to change auditors was not the result of any disagreement between the Company and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
Williams added, "We value greatly the professional services provided by Arthur Andersen over the years and appreciate the excellent work provided by their Manhattan Associates team."
Business Outlook for 2002
Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations for the next quarter and the related fiscal year with respect to future financial performance. The following statements regarding future financial performance 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 June 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 July 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 June 30, 2002, Manhattan Associates currently expects to achieve adjusted earnings in the range of $0.19 to $0.22 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 31,2001. 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.