Manhattan Associates (MANH)

Q3 2011 Earnings Call

October 18, 2011 4:30 pm ET


Dennis B. Story - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Peter F. Sinisgalli - Chief Executive Officer, President and Director


Eric Lemus

Mark W. Schappel - The Benchmark Company, LLC, Research Division



Good afternoon. My name is Felicia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manhattan Associates Third Quarter 2011 Earnings Conference Call. [Operator Instructions] Mr. Story, you may begin your conference.

Dennis B. Story

Thank you, Felicia, and good afternoon, everyone. Welcome to Manhattan Associates 2001 Third Quarter Earnings Call. Before we jump into the call, I want to apologize to everyone for the premature issuance of our earnings press release at about 2 p.m. this afternoon. Normally, we issue our press release after the market closes at 4 p.m. followed by this call at 4:30 p.m. We're currently working with the vendors who assist us in our earnings communication process to investigate what happened. It is important to note that the press release version issued at 2 p.m. was not our final release. The correct release was posted at 2:59 p.m. by GlobeNewswire and is also posted on our website at

Now I'll review our cautionary language and then turn the call over to Pete, 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're cautioned that these forward-looking statements involve risks 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 2010 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,, 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'll turn the call over to Pete.

Peter F. Sinisgalli

Thanks, and welcome to our third quarter 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.

We posted strong results across essentially all financial metrics in our third quarter. License revenue was $13.6 million, up about 12% versus last year. We recognized $3 million plus license revenue deals in the quarter. All 3 are well-known retailers in United States. Two are new customers and one is an existing customer. I have permission from the 2 new customers to use their name: Abercrombie & Fitch and Winn-Dixie. We're thrilled to add such great brands to the list of our partners.

All 3 large sales included Warehouse Management on our platform plus other platform-based solutions. The existing customer already owned our inventory optimization solution and added warehousing and transportation. Overall, our platform strategy continues to play very well in the market.

That's illustrated by our strong, competitive win rate. As you may remember, historically, we have been winning about 2 of every 3 deals we compete in versus our major competitors. More recently, we're winning 4 out of 5. Importantly, we're winning the large strategic deals like Abercrombie and Winn-Dixie. Our Professional Services business continues to post great results with revenue up 19% in the third quarter. During the quarter, we added about 75 people to our staff with a vast majority in billable positions. We continue to search for about 100 more professional services people to add to staff to meet the needs of our customers.

Our meaningful investments in research and development have enabled us to expand our strong competitive position. In a moment, I'll cover several key software releases we delivered in the third quarter. With respect to operations, we continue to manage expenses very well. The combination of strong revenue growth and tight expense management led to our best earnings per share result in the company's history. And Dennis will cover that in just a minute.

Finally, with our strong third quarter and year-to-date financial results and our many years of continuous substantial investments in research and development and other strategic areas, we're quite optimistic about our future. Dennis?

Dennis B. Story

Thanks, Pete. I'm going to cover off our non-GAAP results for Q3 2011, then I'll review 2011 guidance and our preliminary thoughts for 2012 and then turn the call back to Pete for a business update.

As you can see, we delivered another exceptional quarter of financial performance, delivering record Q3 revenue, operating profit and earnings per share, both adjusted and GAAP. Our financial results reflect great execution by our Manhattan team and demonstrate the strength of our operating model and our supply chain software leadership position in our target markets.

Read the rest of this transcript for free on

If you liked this article you might like

Honeywell Eyes M&A With Repatriated Cash; Davos Takes Dollar on Wild Ride--ICYMI

Honeywell Eyes M&A With Repatriated Cash; Davos Takes Dollar on Wild Ride--ICYMI

These Stocks Are Showing Red Flags -- Here's When to Sell

These Stocks Are Showing Red Flags -- Here's When to Sell

4 Stocks Are Showing Red Flags -- Here's When to Sell

4 Stocks Are Showing Red Flags -- Here's When to Sell

Manhattan Associates (MANH) Stock Stumbles on Q3 Revenue Miss

Manhattan Associates (MANH) Stock Stumbles on Q3 Revenue Miss

Honeywell JDA Bid Would Continue Push Into Automation

Honeywell JDA Bid Would Continue Push Into Automation