(Operator Instructions) I would like to welcome everyone to the Manhattan Associates fourth quarter 2007 earnings conference call. (Operator Instructions) I would now like to introduce Mr. Dennis Story, CFO of Manhattan Associates..

Welcome to Manhattan Associates 2007 fourth quarter earnings call. Before we launch into the results discussion, 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 2006 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, and 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 fourth quarter 2007 earnings call. A quick note for you, for those you that got the press release for Manhattan right as it was released at 4 o’clock; somehow the word “revenue” was included in the headline twice. The headline should read, “Manhattan Associates Reports Record Fourth Quarter and Full Year Revenue and Earnings”. I’ll start the call by taking you through some of the highlights from the quarter. And Dennis will provide details of our financial results. I will follow with additional observations about our business and provide an overview of our outlook for 2008. Dennis will conclude our prepared remarks with our financial guidance for the full year and first quarter of 2008 and then we will be happy to answer your questions. We had a solid fourth quarter and full year 2007. License revenue for the quarter was $18.6 million, which was lower than Q4 2006, by about $400,000. Two large deals of $1 million or more we thought would close in the quarter were delayed, but otherwise we are pleased with our license revenue results. We expect both of the delayed transactions to close in 2008. Total revenue for the quarter was $85 million, an increase of 12% over the prior year. This marks our 13th consecutive quarter of double-digit year-over-year revenue growth. For the quarter, we achieved adjusted EPS of $0.37, an increase of 19% over Q4 of last year. For the year, we finished with license revenue of $73 million, which represents 10% growth over 2006 and total revenue of $337.4 million, which represents an increase of 17% over last year. Adjusted EPS for the full year was $1.30, up 20% from last year. Overall, ‘07 was the best year in the company’s history. I’ll now turn the call over to Dennis to provide details on our financial results.

Thanks Pete. Manhattan continued its momentum delivering record Q4 and full-year 2007 revenue and earnings per share performance despite two large license deals slipping to 2008. As Pete noted, we reported record Q4 2007 adjusted EPS of $0.37 today, representing a 19% increase over the Q4 2006, and for the full-year we delivered record adjusted EPS of $1.30 representing a 20% increase year-over-year. On a GAAP basis we reported record GAAP EPS of $0.33 in Q4, an increase of 94% compared to Q4 2006. Excluding Q4 2006 legal settlements, year-over-year GAAP EPS growth was 27%. Full-year 2007 GAAP EPS was $1.13 increasing 64% over 2006. Full-year GAAP EPS increased 38%, excluding our Q4 2006 legal settlements and charges associated with the Evant acquisition and a technology investment write-down. As you know, we have a large R&D center in Bangalore, India, which drove significant pressure on operating margins and earnings per share in 2007, due to currency appreciation in the rupee. The rupee appreciation for the full year 2007 generated a $0.07 reduction in EPS and a $0.02 reduction in Q4 2007. The impact averaged about $0.02 a quarter beginning in Q2 when the rupee started its rise, appreciating 9%. We are prepared for some negative impact in Q1 2008 as well, which I will detail when I discuss guidance. Details of the currency impact by quarter with a standalone breakout for the Indian rupee are included in our supplemental information schedule in today’s earnings release. Now onto revenue and operating results, despite somewhat lower license revenue for the quarter in the Americas, overall we delivered record Q4 consolidated revenue, totaling $85 million representing a 12% growth over the prior year quarter, marking our 13th consecutive quarter of double-digit revenue growth. Consolidated revenue for the full year was also a record…

Thanks, Dennis. In Q4, we signed three deals of $1 million or more in recognized license revenue. Two of the three were with existing customers and all included warehouse management solutions, plus two of the three also included one or more additional Manhattan solutions. I will share more about one of these later in my comments. While we certainly would have preferred to close the two additional $1 million plus deals we were working in Q4, we do expect both to close in 2008. Multiple products are included in these two deals with warehouse management being an important component. We had a successful quarter adding new clients and expanding our relationships with existing clients. New customers included Anna’s Linens, Gainey Transportation, J. Knipper, Metersbonwe, Sigma Electric, SPAR Retail, Whirlpool, and Vitamin Shoppe. Meaningful sales made to existing customers include Aaron Rents, American Eagle Outfitters, Belk, Casual Male, Conair, Converse, DHL, Dick’s Sporting Goods, Elektra, Jones Apparel, KGL Logistics, Kohl & Frisch, Liberty Hardware, Matahari, McKesson, NYK Logistics, Nestle, Safeway, T-Mobile, Teva Pharmaceuticals, and TNT Fashion. New customers generated about 40% of fourth quarter license fees and the remaining 60% came from our existing customers. For the year, the ratio was also about 40:60. License fees for our warehouse management solutions for the quarter were about 50% of total license fees and about 50% was some more non-warehouse management solutions. For the year, this ratio was also about 50:50.For the full year, our warehouse management solutions license revenue grew by about 2% over 2006 tempered by the delayed deals. I am pleased to report that our non-warehouse management product license revenue grew by 20% over 2006. Our planning, forecasting and replenishment applications posted total license revenue of $4.3 million in 2007, a 65% increase over the prior year. We believe we…

Thanks Pete. For the full-year 2008, we anticipate adjusted earnings per share of a $1.47 to $1.53, which represents a growth range of 13% to 18%, with the midpoint of about 15% growth over the $1.30 we achieved in 2007. While we are confident in our pipeline, we have expanded our guidance range from our traditional $0.04 to $0.06 as we factor in the global macro economic environment. Our annual guidance also absorbs the $0.05 of incremental restricted stock expense impact from year two awards under the Manhattan Associates equity comp program. The $0.05 impact equates to approximately $1.9 million of incremental pretax expense for restrictive stock vesting to be expensed ratably throughout the year. For 2008 we expect to improve operating margins by about 50 to 100 basis points over 2007. If you are recall in 2007, we guided a 50 basis points margin improvement and we are challenged with the rupee appreciation which drove a 100 basis point decline in 2007 margins versus 2006. I will also point out that we expect interest and other income to be out $2 million lower than 2007, driven by lower interest income on lower cash balances resulting from our share repurchase program. As I mentioned earlier, our effective tax rate on an adjusted net income and GAAP basis will be 34.75%. For the first quarter of 2008, our adjusted EPS guidance for Q1 2008 will be in the range of $0.22 to $0.28, with the midpoint of $0.25 representing about 9% growth over the $0.23 we posted in Q1 2007. This guidance includes absorbing about $700,000 or $0.02 of rupee appreciation expense impact. As does our annual guidance, our Q1 guidance reflects some caution regarding the global macro economic environment. Consistent with previous years Q1 EPS and operating margins decline on…

Thanks Dennis. Overall, I am quite pleased with our 2007 performance and excited about the future. Our 2007 performance continued to outpace others in the market and we are confident, we’ll continue to extend our market leadership in 2008 and beyond. We believe we made considerable progress in establishing ourselves as the best-in-class supply chain solutions leader. We also believe the investments we have made in our products, technologies, customers and our people position us well for future growth and we believe our shareholders will be rewarded for our success. Operator, we’ll now take questions.

(Operator Instructions) Our first question comes from Adam Holt – JP Morgan. Adam Holt – JP Morgan: I had two questions, one about the quarter and then one about the outlook. You mentioned you did have two larger deals that slipped out of the quarter. I was wondering, first of all, if there was any common denominator around why the deals actually got pushed in. And what gives you confidence that they are going to close in the first quarter and then I have a follow up on the outlook?

The two deals that slipped, there was no common outcome or common denominator that encouraged both not to close in the quarter. We think they were both company specific issues that we believe will get resolved in 2008 and hopefully in the first quarter of 2008. There was no overall macro economic issue that they were wrestling with. We just think in both cases we needed a little bit more time to cross all the T’s and dot all the I’s. In both cases, we believe we are selected for their projects and look forward to working with them in 2008. Adam Holt – JP Morgan: You noted that your pipelines in North America are strong heading into next year and I believe you said that the majority of the headcount adds on the sales side will also be in North America. Do you think you have the opportunity to grow license revenue faster in calendar ‘08 than you did in calendar ‘07 in North America? And I guess an ancillary question would be where then are you reflecting some of the caution around the other macro?

Right now we are being, we think fairly conservative in our outlook for 2008. There is a lot of macro economic issues in the United States, which is our biggest market. We get about 75% of our overall revenue from the US, and about 25% outside the US. So, we are being somewhat cautious on what might transpire over the next 11 months or so. Having said that, the US pipeline does look strong. We feel quite good about our ability to continue to take market share in the US and of course around the world as well. We are cautiously optimistic that 2008 could turn out to be a stronger year than anyone is currently forecasting. And we would love to see faster license revenue growth in 2008 than we are currently forecasting or that we experienced 2007. But in the current conditions, we think a little conservatism is probably appropriate.

Your next question comes from [Amar Inaudible]. [Amar Inaudible]: I just wanted to get an update on transitioning the various modules on to the new architecture the open systems architecture. How is that progressing and whether or not there would be any margin implications for ‘08 and ‘09.

We are making, I think, very solid progress in porting, moving, evolving our solutions to our supply chain process platform. This is an evolving three-year road map. We are a couple of years into that roadmap. We have a got a little bit more work to do in 2008 probably part of 2009. But we are quite pleased with the progress our R&D teams, product management teams have been making in formulating that long-term product strategy. There will be, we believe, important efficiency gains in ’09, 2010 and beyond based on our evolving our solutions to a common supply chain process platform. We, more importantly, believe though that there will be significant benefits to customers from a common supply chain process platform efficiencies, and how the applications run to support staff that they will need to support the applications, the opportunity to optimize using common algorithms across applications, and the opportunity to better meet their customers’ expectations. But all of that will also lead to more efficient R&D expense on Manhattan’s part as well. [Amar Inaudible]: And in terms of the WMS replacement cycle, what inning do you think you are in right now?

If you ask most folks probably somewhere in the middle of the game. Those folks will tell you probably a little bit more than half the market is still using homegrown solutions. So I’d certainly think that half of the market probably needs to be addressed over the next couple of years. We might actually say it maybe a little earlier in the game than the half way point as well since some customer have purchased packaged applications or own packaged applications that are a little bit older, and less well supported by vendors then we see at Manhattan Solutions. So we still think there is plenty of life left in the WMS replacement cycle and expect to continue to take large parts of market share over the next several years. [Amar Inaudible]: And have you seen any pause from Tier 1 retailers or customers with making upfront commitments?

Yes, we’ve not seen that yet. We like everyone else who works with that industry are trying to be quite observant, close, and stay engaged with our partners to make sure we understand their business plans. And we’ve not seen hesitation there. And it’s kind of interesting, you probably heard that some other technology companies if you go back four or five years when there was a slowdown in the market and companies had cut back on their IT investments, when the market improved those companies that cut back on their IT investments found themselves at a meaningful competitive disadvantage. So I think if you talk to CIOs across all industries, including retail, you will find many of them are committed to not letting that happen to their companies. That while it may be a tougher macro environment in 2008 than they would have liked, they will continue to make the smart investments that better position their companies for long-term competitive advantage. And in that environment, I think our solutions are quite appealing. And so, at this point, we have not seen any overall hesitation in the retail marketplaces, but we are trying to be quite observant of what’s going on.

Your next question comes from Mr. Brad Reback - Oppenheimer.

On the service business Pete, what types of things have to change for the margin to begin to ramp up there?

I think with what we suffer from a little bit is a history of exceptional performance. So we have done a lot of studies working with our services teams on ways to try to improve our services margins. And one of those studies compared Manhattan Associates services business to all of the best-in-class service companies including all of the Indian services companies, Accenture, Capgemini and so forth. And we are at the very top of services, gross margins of anyone in the world. So that’s a pretty high standard to try to elevate from. We had the benefit four or five years ago of basically being a single product company on a single technology stack. Our WMS on the iSeries platform was a very efficient platform for conducting professional services and a more open complex environment. Some of those niceties have gone away. And so, when we studied our services business, there certainly is opportunity for improvement and there is always is, but we don’t think we are doing anything that makes us anything less than best in class in our services business. So if you study, I’m sure you don’t have the time to do this, but if you look at the industry, our best-in-class services gross margins approach 48%. If you looked at the any of the big guys they would be envious of getting there, and we are already there. So the challenge we have going forward is to try to tweak some improvements in our efficiency, probably look at opportunities to streamline some of our processes. I don’t see in the next couple of years meaningful opportunities to raise price, which is normally one way to try to improve the margin. I don’t see the opportunity for that given all the pressure in professional services, but we do look for opportunities to improve our services efficiencies. But I must commend the Manhattan team, we are the best in the world and they deserve credit for that.

Well just follow up on that real quickly, with just about 50% of your revenue in ‘07 coming from professional services and to your credit how well run that organization is. To see meaningful margin expansion from current levels or even moderate margin expansion is it all 100% dependent on license then pretty much?

Well there is also opportunities, I think Brad, to get greater leverage out of our G&A expenses as well. So certainly our revenue mix in ‘07 harmed our margin. We had solid growth in all three components of revenue, but the fastest growth came in services and hardware, which are lower margins since software. So software and frankly if a couple of deals had closed, that would have looked considerable nicer, but such is life. But we do believe that the revenue mix should help us in 2008. We also believe getting some additional growth, faster growth from the international markets will help on our gross margins and total margins. If you notice, margins in Asia and Europe are well below the margins in the US, because they are younger markets for us and we believe as we grow, we’ll strengthen our margins there. Then of course we think there is leverage in our sales and marketing, research and development, and overall administrative expenses which will contribute to margin expansion in 2008 and beyond.

Your next question comes from Mr. Michael Wong.

The forecasting planning seemed to have a better year in ‘07 relative to ‘06. So do you think that customer reference ability and your sales maturity around that front offering, is it getting to appoint where it’s getting easier to sell?

Yes, I am not sure I quite go there, yet. Certainly we are making incremental improvement. I think probably what was the greatest factor in our success in ’07, which we are increasing in ’08, is stronger focus on awareness and leadership in that market space. We have done a couple of things in ‘07 to reprioritize some of our efforts to get even greater focus on our place in that market space and I believe that’s paying off. Granted $4.3, $4.5 million of license revenue, it’s not the place where we wish to be, but 65% growth we think is encouraging. And we believe that’s an attractive market that greatly complements our supply chain execution solutions. So I wouldn’t say it’s getting materially easier and I know our sales guys will tell you that they are working very hard. But I do believe our reputation is getting better and better and our customer success is more visible. And the combination of those two should lead to long-term success.

So of the two large deals that slipped, I am assuming both were in North America. Can you tell us whether or not they were with new customers? And I guess what is the likelihood that one of those two could close in Q1?

Yes, both were in the US. So both of the deals were in the US as is 75% of our revenues, so that’s not all that surprising. We are cautiously optimistic that one or both could close in the first quarter. They have not yet closed. So there are no guarantees but we are cautiously optimistic. And probably I am not going to provide any more background on that in fairness to the customers and so forth until the deals are actually closed.

In terms of the guidance, so in terms of your assumptions around closed rates both at the low end and high end for the year, is it fair to say that the high end assumes no deterioration close rates but the lower end assume some deterioration in close rates?

That would be a fair assumption, yes.

From a license perspective, I know you touched on this earlier, but what would you characterize as the key levers that could drive accelerated license revenue growth in ‘08 versus ’07? Is it primarily focused more on product or distribution or on market?

Again, Michael, I think one of the things that could turn out to be a catalyst in ‘08 as companies, in a tougher macro economic environment look for the most effective way to invest their IT people, resources, and IT investment dollars, look for high probability pay backs. And historically solutions like ours that are very defendable ROIs, easily quantified cost savings could move materially up the priority list. As I mentioned earlier, a lot of CIOs and CTOs are well aware of what happened five, six years ago when companies cut back on their investments for the long run to try to save in the short run on IT budgets and learnt to regret it. So, our cautious optimism could be fueled by reprioritization some key projects that would put even greater urgency behind supply chain transformation programs.

Your next question comes from Yun Kim – Pacific Growth Equities. Yun Kim – Pacific Growth Equities : For your business for the year, do you expect a same kind of seasonality of last two years to play out this year again with a big ramp down in Q1 and backup big in Q2 and then down again a bit in Q3 and up big again in Q4. Also it seems like this type of seasonality didn’t exist until starting two years ago about the time that you started to focus on the ILF strategy or self-strategy. Do you think this high level of seasonality gets you more and larger deals that you are either closing or focusing on? Also whether there is any effort to minimize this kind of seasonality.

We expect to see about the same seasonality as we have seen over the last couple of years. So about the same mix of first half, license and services revenues first half, second half mix are about the same.

Yes, your question about is it different than a few years ago, yes, it has moderated in the last two or three years. I will tell you if you went back four or five years, Manhattan was more of the exception to software companies. Software companies for decades have always had strong second quarters and fourth quarters for license revenue. And Manhattan, if you go back four or five years, had solid first quarter license revenue and pretty good second and good fourth. And what has basically happened over the past couple of years, I would say four or five years ago we were much more dependent on the retail market, the retail vertical for our license revenue growth. And retail as you probably know was naturally a bigger purchaser in Q1. Q1 tends to be either the end of their fiscal year which generally ends on January 31, or the beginning of the New Year, where they have bandwidth to start tackling problems after the big Christmas shopping season. And over the last couple of years as our concentration in retail, while still strong, has been diluted a bit by other verticals coming up, some of our exposure to big swings by retail in the first quarter have been mitigated. So I think if you looked at our seasonality pattern for license revenue it’s quite similar to other application software companies. And the buyers have to lot to do with how they transact in that matter. But I believe our services business is quite predictable. The patterns you’ve seen over the past couple of years in services should continue in 2008 and we believe the license revenue as a percent of total revenue will be quite similar to ‘08 as it was in ‘07 and ‘06. Yun Kim – Pacific Growth Equities : What is your plan for the billable consulting headcount growth for the year?

Yes, our head count growth for consulting should be in line with our revenue growth for consulting. As we said, overall we expect to grow about 2X the market. That would imply somewhere in the 10% to 14% range as the consulting business is billable by our business. You need the people to be able to perform the services to achieve the revenue. So we would expect our services headcount to grow in line with our services revenue. Also hopefully getting back to that comment that Brad Reback made earlier, hopefully there are some slight improvements in gross margin there that would allow us to grow revenue a little bit more quickly than headcount. Yun Kim – Pacific Growth Equities : In terms of your acquisition strategy, if you generate more than half of your license revenue from your existing customers, would you be open to making acquisitions that gives you more installed base but not much in terms of new products or technology? And then also along the line of question, are you willing to carry on debt if the opportunity is out there?

One of the things I think I mentioned earlier in my comments that distinguishes Manhattan Associates from anybody else in their spaces is our focus on a product and technology strategy that we believe leads to great strategic value to the customers in our target markets. So one of the things that’s important about that is to stay focused on a technology strategy and a product strategy that doesn’t get diluted by having a lot of odds and ends in your customer base and product portfolio. So while we are always open-minded to opportunities to increase shareholder value and increase our trajectory, we are quite concerned about not making acquisitions that dilutes or complicates our focus on our long-term strategic objective to be the integrated suite of supply chain solutions on common text deck that optimize supply chains for our customers. So I think I answered your question. We would be cautious about buying a company that we do not think adds strategic value to the company’s long-term future. And in terms of taking on debt, in the right circumstances we would be open-minded to taking on debt for the right acquisition. We believe our cash flow from operations is quite predictable, quite strong, has been demonstrated for years. And believed given our very strong balance sheet with no debt, we have the capacity to take on some debt. Of course, we would be cautious about that but we would be open-minded to that situation was compelling.

Your next question comes from Mr. [Mark Chappell]. [Mark Chappell]: Pete, despite missing the two large deals in the quarter, your large deal business was especially strong in 2007. And I guess my question is to what extent in your view does a softening IT environment impact your large deal business in your view?

Mark, it will be interesting to see over the next 11 months. I am not sure my crystal ball is much better than others. If we look at the pipeline, it looks solid. The conservations we are having with customers looks good. As I mentioned in the one example I used in the call, we believe our suite of solutions with the opportunity to optimize across applications, Flow Management, and so forth is quite compelling. Which should lead to even further acceleration in big deal activity for us and in particular in an environment where cost saving initiatives might get prioritized higher, we are cautiously optimistic that our ability to close $1 million plus deals in 2008 will be solid. But as I said we are being a little bit cautious at the moment not knowing truly how the macro impacts might affect the marketplace but we are quite optimistic about where the company can go and the value we bring to customers. [Mark Chappell]: And regarding the large deals that you saw in the quarter, who are you seeing competitively in those deals, any changes?

No, not really, no it’s pretty much across the board. As I mentioned in the example I use we competed against SAP in that deal. In other deals it could be a another WMS vendor. Certain deals could be another forecasting or replenishment vendor, other deals a transportation solution vendor and other geographies outside of the US could be a whole collection of different competitors. So there isn’t any one competitor. Obviously we expect over the next three to five years to be competing more directly, more often with SAP and Oracle. But at the time being there still are some other best of breed solution providers out there that are competitors of ours. But by and large it is about the same folks we have seen over the past couple of years. Just to close, we are quite pleased with our company’s position. We think 2007 even with the two slipped deals was a very, very successful year for Manhattan Associates. And we think our position in the marketplace is compelling. We think the value proposition we bring to customers, particularly in a tough macro environment, is particularly compelling and feel very good about our long- term future. So with that let me sign off and thank you for spending time with us this afternoon and look forward to speaking with you again in 90 days.