The Supply Chain Is Good To Manhattan Associates In Q4

February 4, 2013 Timothy Prickett Morgan

Supply chain and warehouse management software maker Manhattan Associates continues to do well in a cut-throat market, and to do so with organic growth and good, old-fashioned software development.

In the fourth quarter ended in December, the company’s revenues were $95.4 million, up 14.2 percent compared to the year-ago period, with net income rising an even faster 18.5 percent to $12.5 million. That’s a very respectable 13 percent of revenue dropping from the top to the bottom line.

During Q4, software license sales at Manhattan Associates actually fell by 13.9 percent to $14.4 million, but services revenues more than compensated by rising 19.3 percent to $72.9 million. The company is also a systems reseller (with some of those machines being Power Systems-IBM i boxes) and hardware sales in the quarter rose by 36.3 percent to $8.7 million.

For the full year, hardware sales were flat at $30.9 million, software license sales rose by 13.4 percent to $61.5 million, and services revenues rose by 16.3 percent to $283.9 million. Overall sales therefore came in at $376.3 million, up 14.3 percent, and net income was $51.9 million, up 15.5 percent. If you do the math, that works out to $2.56 per share of earnings, compared to $2.09 a share in 2011.

It is amazing that someone like Infor, Oracle, or SAP has not snapped up Manhattan Associates yet. But that probably has to do with the fact that the company has a market capitalization of $1.34 billion as The Four Hundred goes to press on Friday after the markets closed. Manhattan Associates would not be a cheap acquisition. And the company itself knows this, having spent $99.7 million last year buying up nearly 2 million of its own shares.

Looking ahead to 2013, Manhattan Associates says that it expects sales of between $410 million and $415 million, which represents between 9 and 10 percent growth. Earnings per share is expected to fall between a tight range of $2.85 to $2.91, which is between 11 and 14 percent over this year’s EPS.