Marking the Twelfth Consecutive Quarter of Meeting or Exceeding Consensus Earnings Per Share Estimates; Core Revenue Drivers Reach New Record
ATLANTA - October 23, 2002 - Manhattan Associates, Inc., (Nasdaq: MANH), the global leader in extended supply chain execution solutions, today announced record results for core revenues in the third quarter ended September 30, 2002. These results mark the twelfth consecutive quarter that Manhattan Associates has met or exceeded the First Call consensus earnings per share estimates of the financial analysts covering the Company.
Key quarterly financial highlights for Manhattan Associates include:
· Net income for the quarter was up 30% from the quarter ended September 30, 2001 to $6.0 million, or $0.20 per fully diluted share. Adjusted net income, which excludes the amortization of acquisition-related intangible assets, net of taxes, was $6.3 million for the quarter, or $0.21 per fully diluted share, an increase of 16% over the third quarter of 2001.
· Core revenue drivers, which include software fees and services revenue, were a record $38.4 million for the quarter, up 13% from $33.9 million for the third quarter of 2001. Total revenue for the quarter ended September 30, 2002 was $42.9 million, an increase of 8% over revenue of $39.7 million for the third quarter of 2001.
· Software fees for the quarter ended September 30, 2002 were $10.0 million, an increase of 9% over the third quarter of 2001.
· Services revenue for the quarter ended September 30, 2002 was a record $28.4 million, an increase of 15% over the third quarter of 2001.
· International revenues reached a record 20% of total revenues for the third quarter of 2002.
· Total cash and short-term investments were a record $130.0 million at September 30, 2002, up 25% from December 31, 2001. Days Sales Outstanding (DSOs) remained strong at 67 days.
· The Company announced the extension of the $10 million stock buy-back program previously authorized in September 2001. The Company acquired 260,000 shares of Manhattan Associates stock for $4.1 million at a price of approximately $15.80 per share during the third quarter.
· The Company announced that in late September 2002 the United States Bankruptcy Court for the Northern District of Illinois Eastern Division authorized Kmart`s request to assume the software license, services, support and enhancement agreement it has with the Company. With the appeals process completed in early October, Manhattan Associates expects to reverse approximately $2.2 million of its related reserve in the fourth quarter of 2002, which translates into approximately $0.04 to $0.05 per fully diluted share for the fourth quarter of 2002.
· The Company announced that it has signed a letter of intent to acquire the assets of Logistics.com, a provider of integrated logistics planning and execution solutions for shippers and carriers. The purchase price is expected to be approximately $20.0 million. The parties expect to close the transaction in the fourth quarter, and Manhattan Associates does not expect the acquisition to dilute future earnings. No revenue from the Logistics.com acquisition is included in the Company`s third quarter 2002 results.
"The Company turned in another very strong performance, and we are positive about our future. We continue to execute on our strategies of global expansion, product expansion, and improved quality and customer satisfaction. These strategies, coupled with the industry`s best employees, are the reasons for our success," said Richard Haddrill, Manhattan Associates` president and CEO.
For the nine months ended September 30, 2002, total revenues were a record $130.1 million, an increase of approximately 14% over the same nine-month period of 2001. Net income was $17.7 million, or $0.58 per fully diluted share for the nine months ended September 30, 2002. Adjusted net income, which excludes the amortization of acquisition-related intangible assets, net of taxes, was $18.7 million, or $0.61 per fully diluted share, an increase of 16% over the prior year.
Other key quarterly highlights for Manhattan Associates include the following:
· Signed key new customers in the quarter including: Aaron Rents, Inc.; C&J; Clark America, Inc.; Casual Male Retail Group, Incorporated; Delta Faucet Company; Pharmacia Corporation for Pharmacia NV; Value City Department Stores, Inc.; River Island Clothing Company Limited; House of Fraser (Stores) Ltd.; and Servicios Empresariales Zimag S.A. de C.V.
· Continued to further our partnership with many existing clients, including Columbia Sportswear Company; KB Consolidated, Inc.; Sara Lee Corporation; Skechers USA, Inc.; The Sports Authority, Inc.; and TNT Logistics North America, Inc.
· Announced the release of PkCost™ 2002R1, a dynamic billing solution that captures information from supply chain execution systems to enable third-party logistics (3PL) providers to track and bill clients for inventory handling, storage, fulfillment and transportation activities.
· Selected by FORTUNE Small Business Magazine for its FSB 100: FORTUNE Small Business` second annual list of the 100 Fastest Growing publicly traded small businesses in America. Manhattan Associates was ranked No. 43 and was the only supply chain technology company included in the list.
· Named to FORTUNE`s annual list of the 100 Fastest Growing Companies in America. The Company was ranked No. 23 and was the only supply chain technology company included in the list.
· Named to the Business 2.0 100, the publication`s first annual list of the fastest growing publicly traded technology companies traded in the United States. At No. 11, Manhattan Associates is the only pure supply chain management company included in the list.
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 December 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 first week of February 2003.
For the quarter ending December 31, 2002, Manhattan Associates currently expects to achieve earnings, excluding the amortization of acquisition-related intangibles and the Kmart recovery, in the range of $0.20 to $0.26 per fully diluted share. These expectations assume that the current general economic environment will improve modestly over the balance of the year.
The current uncertainty in the economy has limited our ability to provide 2003 financial guidance at this time. Manhattan Associates will disseminate financial guidance when and if the Company is better positioned to provide such guidance.
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 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.