Q3 Financial Report Bumps Manhattan Associates Stock
October 31, 2011 Dan Burger
Manhattan Associates, a supply chain software company with hundreds of IBM i-based companies using its warehouse management software, has completed its third quarter financial reports for 2011 with record-setting accomplishments. And on that news, shares last week reached a new all-time high.
Record revenue for the third quarter reached $85.6 million, an increase of 16 percent compared to one year ago. Year to date that puts the company slightly more than $20 million ahead of this time last year. Services revenue grew 19 percent and licensing revenue grew 12 percent.
Services revenue totaled $63.6 million, with consulting services contributing $41.4 million and maintenance services pitching in $22.2 million.
License revenue was $13.6 million, compared to $12.8 million in the third quarter of 2010. Three license revenue deals worth more than $1 million each fattened the pot. Two of those were new customers: Abercombie & Fitch and Winn-Dixie. All three sales included Manhattan Associates Warehouse Management systems.
“Historically, we have been winning about two of every three deals we compete in versus our major competitors,” noted company President and CEO Peter Sinisgalli. “More recently, we’re winning four out of five. Importantly, we’re winning the large strategic deals like Abercrombie and Winn-Dixie.”
For the first nine months of the year, however, licensing revenue fell nearly $4 million short of the numbers put up in 2010.
The geographical breakout shows revenue increases in Q3 as follows: Americas, 13 percent; EMEA, 21 percent; and APAC, 53 percent.
Within a short time after making its Q3 numbers public, Manhattan Associates stock got the good news bump. Thursday, according to The Street, Manhattan Associates stock hit a 52-week high of $41.84, with 117,655 shares traded. The average volume during the past 30 days has been 141,500.
GuruFocus.com reported Sinisgalli sold 113,872 shares on October 25 and 78,966 shares on October 21. Dennis Story, chief financial officer, commented on capital structure management citing the company’s share buyback program as being highly accretive to our shareholders. “Year-to-date, we have reduced our common shares outstanding by about 6 percent by buying back 2.8 million shares against option exercises of 1.3 million shares,” Story said. “In addition, our board approved raising our share repurchase authority limit to a total of $50 million.”
For the quarter, diluted shares totaled 21.1 million shares, down from 21.8 million shares in Q2 2011. The company estimate for full year and Q4 2011 diluted shares is about 21.2 million shares.
Sinisgalli also noted in conjunction with the growing services business the company “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.”
In addition to having a solid customer base of IBM i users, Manhattan Associates also develops software for the Unix and Windows .NET platforms.