Manhattan Associates, Inc. (
Q3 2010 Earnings Call Transcript
October 19, 2010 4:30 pm ET
Dennis Story – SVP and CFO
Pete Sinisgalli – President and CEO
Terry Tillman – Raymond James
Mark Schappel – The Benchmark Company
Brad Reback – Oppenheimer
Previous Statements by MANH
» Manhattan Associates, Inc. Q2 2010 Earnings Call Transcript
» Manhattan Associates, Inc. Q1 2010 Earnings Call Transcript
» Manhattan Associates, Inc. Q4 2009 Earnings Call Transcript
» Manhattan Associates, Inc. Q3 2009 Earnings Call Transcript
Good afternoon. My name is Christopher and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates third quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator instructions) As a reminder, ladies and gentlemen, this call is being recorded today, October 19th, 2010.
I would now like to introduce Dennis Story of Manhattan Associates. Mr. Story, you may begin your conference.
Thank you, Christopher, and good afternoon, everyone. Welcome to Manhattan Associates 2010 third quarter earnings call. I will review our cautionary language and then turn the call over to Pete Sinisgalli, our CEO.
During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or future financial performance of Manhattan Associates. You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and that actual results may differ materially from those in our forward-looking statements.
I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly our Annual Report on Form 10-K for fiscal 2009 and the Risk Factor discussion in that report. We are under no obligation to update these statements.
In addition, our comments will cover certain non-GAAP financial measures. These measures are not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. We believe that this presentation of certain non-GAAP measures facilitates investors’ understanding of our historical operating trends with useful insight into our profitability, exclusive of unusual adjustments.
Our Form 8-K filed today with the SEC and available from our website manh.com contains important disclosure about our use of non-GAAP measures. In addition, our earnings release filed with the Form 8-K reconciles our non-GAAP measures to the most directly comparable GAAP measures.
Now, I will turn the call over to Pete.
Thanks and welcome to our third quarter earnings call. I'll start by reviewing highlights from the quarter. Dennis will then get into the details of our financial results. I'll follow with additional details about our business. And then, we'll move to questions.
As noted in our press release, we posted solid financial results in our third quarter of 2010. We recorded license revenue in the quarter of a little more than $12 million, up about 6% versus last year. As you know, Q3 has historically been our lowest license fee quarter and we expect that to be the case once again this year.
For the quarter, we recognized two million-plus-dollar license revenue deals. One was in the Americas with an existing retail customer where we expanded our warehouse management relationship by adding labor management and slotting optimization. The other was in Europe with a new customer for distribution management.
In addition to these two large deals, we closed another million-plus license deal, but will delay recognizing license revenue to future periods. This new client is a very large global information technology provider and one of the very few that offers to the market a highly regarded technology platform.
As part of our contract, we agreed to certify our solutions on that client's technology platform, which we have done in the past for other clients. However, since we've contracted to certify our solutions on this technology, for each of the next five years we will recognize the license revenue ratably over the term of the contract, beginning with our delivery of certified software to the client in Q1 of 2011.
Although we aren't recording license revenue in this quarter from this contract, it is a very important win for Manhattan. The client has made many acquisitions over the past few years and as a result, already owns supply chain technology from SAP, Oracle, RedPrairie and others, though not Manhattan. Nonetheless, after careful evaluation, our superior solutions won.
In addition to a large license fee, our professional services teams will be assisting this client with a multiyear global deployment of warehouse management, extended enterprise management, distributed order management and other solutions. Our SCOPE solution suite and our platform strategy played very well with this client.
Overall, our platform strategy continues to resonate very well in the market. That's illustrated by our strong competitive win rate in the quarter of about two wins out of every three potential deals versus our major competitors. Importantly, we are winning the large strategic deals. Our implementations of warehouse management on our platform continue to progress well and I'll comment more about that following Dennis' remarks.
Year-to-date, license revenue has more than doubled since last year. Overall, revenue growth is 22% and adjusted earnings per share of $1.06 is greater than full year 2009 and up 63% versus last year. We expect Q4 to be another successful quarter for us.
Dennis will now provide some details.
Thanks, Pete. Manhattan delivered another strong quarter of financial results, marking our third consecutive quarter of double-digit revenue growth, delivering $74 million in total revenue and $0.32 in adjusted earnings per share, setting a pace to exit 2010 achieving a solid rebound year, off an aberrant 2009 comparison.