Manhattan Associates 8-K 2007
Securities And Exchange Commission
Washington, DC 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 19, 2007
(Exact Name of Registrant as Specified in Its Charter)
2300 Windy Ridge Parkway, Suite 700, Atlanta, Georgia
(Address of Principal Executive Offices)
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing in intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Item 2.02 Results of Operations and Financial Condition.
On July 24, 2007, Manhattan Associates, Inc. (the Company) issued a press release providing the results for its financial performance for the second quarter ended June 30, 2007. A copy of this press release is attached as Exhibit 99.1. Pursuant to General Instruction B.2 of Form 8-K, this exhibit is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934.
The press release includes, as additional information regarding our operating results, our adjusted operating income, adjusted net income and adjusted earnings per share, which excludes the impact of acquisition-related costs and the amortization thereof, the recapture of previously recognized transaction tax expense and stock option expense under SFAS 123(R), all net of income tax effects. Adjusted operating income, adjusted net income and adjusted earnings per share are not in accordance with, or an alternative for, operating income, net income and earnings per share under generally accepted accounting principles in the United States (GAAP) and may be different from non-GAAP operating income, net income and earnings per share measures used by other companies. Non-GAAP financial measures should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with the GAAP.
We believe that these adjusted (non-GAAP) results provide more meaningful information regarding those aspects of our current operating performance that can be effectively managed, and consequently have developed our internal reporting, compensation and planning systems using these measures.
For these reasons, we have developed our internal reporting, compensation and planning systems using non-GAAP measures which adjust for these amounts.
We believe the reporting of adjusted operating income, adjusted net income and adjusted earnings per share facilitates investors understanding of our historical operating trends, because it provides important supplemental measurement information in evaluating the operating results of our business, as distinct from results that include items that are not indicative of ongoing operating results, and thus provide the investors with useful insight into our profitability exclusive of unusual adjustments. While these adjusted items may not be considered as non-recurring in nature in a strictly accounting sense, the management regards those items as infrequent and not arising out of the ordinary course of business and finds it useful to utilize a non-GAAP measure in evaluating the performance of our underlying core business.
We also believe that adjusted operating income, adjusted net income and adjusted earnings per share provides a basis for more relevant comparisons to other companies in the industry, enables investors to evaluate our operating performance in a manner consistent with our internal basis of measurement and also presents our investors our operating results on the same basis as that used by our management. Management refers to adjusted operating income, adjusted net income and adjusted earnings per share in making operating decisions because they provide meaningful supplemental information regarding our operational performance and our ability to invest in research and development and fund acquisitions and capital expenditures. In addition, adjusted operating income, adjusted net income and adjusted earnings per share facilitate managements internal comparisons to our historical operating results and comparisons to competitors operating results. Further, we rely on adjusted operating income, adjusted net income and adjusted net income per share information as primary measures to review and assess the operating performance of our company and our management team in connection with our executive compensation and bonus plans. Since most of our employees are not directly involved with decisions surrounding acquisitions or severance related activities and other items that are not central to our core operations, we do not believe it is appropriate and fair to have their incentive compensation affected by these items. By adjusting those items not indicative of ongoing operating results, the non-GAAP financial measure could serve as an alternative useful measure to evaluate our prospect for future performance because our investors are able to more conveniently predict the results of our operating activities on an on-going basis when excluding these less common items.
Investors should be aware that these non-GAAP measures have inherent limitations, including their variance from certain of the financial measurement principals underlying GAAP, should not be considered as a replacement for operating income, net income and earnings per share, respectively, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For instance, we exclude the charges of the acquisition-related costs and the related amortization while we still retain the acquisition-related benefits and revenue in calculation of the non-GAAP adjusted operating income, net income and earnings per share. In addition, we exclude a portion of employee compensation, which is commonly considered integral to a companys operational performance. This supplemental non-GAAP information should not be construed as an inference that the Companys future results will be unaffected by similar adjustments to net earnings determined in accordance with GAAP.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On July 19, 2007, the Company and its President and Chief Executive Officer, Peter F. Sinisgalli, entered into a modification (the Modification) to the Executive Employment Agreement by and between the Company and Mr. Sinisgalli dated February 25, 2004 (the Original Agreement). The Compensation Committee of the Board of the Directors of the Company negotiated the Modification with Mr. Sinisgalli, and approved the final terms, conditions and form of the Modification, and the Board of Directors ratified the Compensation Committees actions.
The term of the Original Agreement, pursuant to which Mr. Sinisgalli is employed as the Companys President and Chief Executive Officer, ends on April 12, 2008. The Modification extends the term of Mr. Sinisgallis employment pursuant to the Original Agreement until April 12, 2012.
In consideration of his agreement to continue in his offices with the Company, Mr. Sinisgalli is entitled under the Modification to an annual salary of $440,000, subject to annual review, and will continue to be eligible to receive a performance-based bonus as determined by the Compensation Committee. The Modification also provides for the grant to Mr. Sinisgalli, on the date of execution of the Modification, of (1) options to purchase 200,000 shares of the Companys Common Stock, at an exercise price of $25.52 a share, expiring on the seventh anniversary of the grant date, and (2) 66,667 shares of restricted stock, both pursuant to the Companys 2007 Stock Incentive Plan. The options and restricted shares vest in 16 equal quarterly installments beginning April 4, 2008. In the event Mr. Sinisgalli is terminated or constructively terminated, other than for cause, within two years following a change of control of the Company, all unvested equity incentives granted pursuant to the Modification immediately vest.
This summary of the terms and conditions of the Modification is qualified in its entirety by the reference to the full text of the Modification, which is filed herewith as Exhibit 10.1, and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: July 24, 2007