Manhattan Associates, Inc. (MANH)
Q2 2010 Earnings Call Transcript
July 20, 2010 4:30 pm ET
Dennis Story – SVP & CFO
Pete Sinisgalli – President & CEO
Mark Schappel – The Benchmark Company
Terry Tillman – Raymond James
Yun Kim – Gleacher & Company
Previous Statements by MANH
» 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 Neyson [ph] and I will be your conference operator today. At this time, I would like to welcome everyone to the Manhattan Associates second quarter 2010 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) As a reminder, ladies and gentlemen, this call is being recorded, today, Tuesday, July 20th, 2010. I will now like to introduce Dennis Story, Chief Financial Officer of Manhattan Associates. Mr. Story, you may begin your conference.
Thank you, Neyson, and good afternoon, everyone. Welcome to Manhattan Associates 2010 second 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 www.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 second quarter 2010 earnings call. I will start the call by taking you through an overview of the quarter and the first half. Dennis will then get into the details of our financial results. And then we’ll be happy to answer your questions. We are quite pleased with our second quarter and first half financial results and continue to be encouraged about our near term and long term prospects.
License revenue for the quarter at $15.5 million was more than three times last year’s results and includes two deals of one million or more in recognized revenue. Total revenue was $77.6 million, up 33% versus Q2 of last year. Adjusted EPS was $0.38, almost three times Q2 2009’s outcome. Our win-loss rate continues to favor us in two out of every three competitive deals as the market is quite receptive to our broad suite of supply chain solutions on a common supply chain process platform.
This quarter’s million plus license deals illustrate our strong, strategic position in one our customer is looking for a distribution solution to complement a supply chain transformation program. Although our discussions initially focused on the customers’ request for distribution management, we soon were able to expand the evaluation to include transportation management as we demonstrated the meaningful advantage of integrating warehouse management and transportation management for better performance.
The second million plus deal was with an existing warehouse management customer who wanted to build on their WMS efficiency gains by enhancing their order management and inventory allocation processes. We were able to demonstrate the additive value of combining our order life cycle management solution suite with their existing WMS system.
While questions certainly remain regarding the health and direction of the global economy, we believe we are well-positioned for continued success. Since the global economy began to stabilize in the third quarter of last year, we’ve posted four straight quarters of strong financial results. In addition, we continue to make important investments in innovation that clearly differentiate us from all others in our market. I believe our ability to execute and our commitment to innovation will be well-regarded and well-rewarded in the future. And I will speak more about this following Dennis’ comments. Dennis?
Thanks, Pete. The second quarter of 2010 mirrored the first a strong license and services revenue performance paved the way for Manhattan to deliver Q2 adjusted EPS of $0.38, representing growth of 171% over a weak Q2 2009 comp of $0.14. No question, we have had an exceptional first half in 2010 against significantly disparate comps in 2009. Business momentum is very positive on a trailing 12-month basis and heading in the right direction.
As we look to the second half of 2010 and into 2011, our visibility is positively firming up on license pipeline and services demand. At this point we believe our business will begin to return to more historically typical seasonality starting in the second half of this year.
I will provide some directional financial parameters for the second half throughout my review of Q2 and recap at the end before I turn the call back to Pete for the business update.