Good afternoon, my name is Courtney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manhattan Associates fourth quarter 2009 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. Mr. Dennis Story, you may begin your conference.

Thank you Courtney and welcome everyone to Manhattan Associates 2009 fourth quarter earnings call. 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 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 2008 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 Web site www.manh.com 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 will turn the call over to Pete.

Thanks and welcome to our call. I speak for the entire Manhattan Associates team and I am sure echo sentiments from other companies as well when I say we are glad to have 2009 behind us. There is no question 2009 was a tough year; however, it was also a year of two distinctly different halves with encouraging market signals beginning to emerge in the third quarter and continuing through the fourth quarter. In fact, the fourth quarter was the first time in more than a year that we posted license revenue growth. A stabilizing economy is the primary reason for this improved outcome. As the press release we issued today outlines and Dennis will cover in his comments, we posted decent results in the fourth quarter and for the full year, and looking forward we are cautiously optimistic. Our optimism comes from contrasting the first half of 2009 with the second half. Our total license revenue in the first half of 2009 can be fairly characterized as abysmal, a total of $9 million, down 76% versus the first half of 2008 with no deals worth more than $1 million in the mix. In contrast, we delivered $25.6 million in total license revenue in the second half of the year. While the second half result remains down in a year-over-year comparison it’s down only 7%. While most organizations will continue to be slower and more cautious when considering strategic capital investments than they were in years prior to the global economic meltdown, we did close three deals worth $1 million or more in Q3 and another two in the fourth quarter. The return of large deals helped us improve from delivering adjusted EPS of $0.21 in the first half of this year to $0.74 in the second half. The second…

Thanks, Pete. Before I jump into Q4 results, it’s worth putting our full-year 2009 results in context. We certainly were not immune to the impact of the worst global economic recession post-World War II. Total revenue for 2009 was $246.7 million, down $91 million or 27% over 2008, marking our lowest revenue year since 2004. License revenues of $34.7 million decreased 47%, our lowest license revenue year since 2001. While as Pete noted, the second half of 2009 saw the welcome return of customers willing to commit to deals worth $1 million or more in license revenue we still closed only five deals of this magnitude for the year. As a result, adjusted earnings per share were $0.73, compared to $0.96, declining 30% compared with 2008. In the face of a negative $91 million revenue delta from 2008, we took decisive actions to protect earnings without sacrificing investment in innovation and service to our customers. Of the $91 million top line GAAP, we were able to recoup about $80 million or $0.88 of every revenue dollar decline, delivering adjusted operating profit of $33 million down just $11 million from 2008. In some respects, 2009 marks one of the finest performances in Manhattan’s history despite unprecedented challenges, our more than 800 associates banded together with a common focus and a common willingness to make short-term sacrifices to advance our competitive market position. We believe we are starting 2010 as an even stronger company for having weathered the trials of 2009, which Pete will highlight further in his closing remarks. Against that backdrop for the full year I will now cover our Q4 performance. Q4 adjusted EPS of 0.31 increased 19% compared to $0.26 in the fourth quarter of 2008. Q4 adjusted net income of $7 million increased 16% over Q4 2008.…

Thanks, Dennis. I know that was a lot of detail to cover, but we certainly appreciate your covering it with everyone on the call as part of our full disclosure program. Now I will jump into a little bit of color on our quarter and the 2009 results. First a little bit about the deals we closed in Q4, with respect to the two large deals, one with an existing customer and one was with a new customer. And both were wins that included multiple Manhattan solutions. One win was to assist in a major supply chain transformation, as the client moves from a decentralized to a centralized strategy to gain greater efficiencies and effectiveness across labor, assets, and inventory. The other deal will help restructuring existing supply chain to realize greater labor and transportation efficiencies. In both cases, the clients are striving to improve operational efficiencies while at the same time enhancing customer service levels. About half of license revenue fees in the quarter were tied to warehouse management and about half to all other solutions. And for the year, this ratio was about 60% warehouse management and 40% our other solutions. The retail, consumer goods, and logistic service provider verticals were once again solid contributors to our license fees and made up more than half of license revenue for both the quarter and the year. We had a successful quarter adding new clients and expanding our relationships with existing ones. Software license wins with new customers, included Goya Foods, Groveport, J&P Cycles, Kwik Trip, Radiant Group, ResMed, Tractor Supply, Richline Group, Sigma-Aldrich and Vasanta Group. Projects with existing customer included ACH Food, Amerisource Bergen, Archbrook Laguna, Avon, Carolina Logistics, CEVA Logistics, Fitness Quest, Genuine Parts, Guru Denim, Jasco, O'Reilly Auto, PepsiCo, Performance, Tally Weijl and Wirtz. As I…

(Operator instructions) Your first question comes from the line of Michael Huang from ThinkEquity. Your line is open. Michael Huang – ThinkEquity: Thanks very much. Couple questions for you. First of all, as you look at 2010, I know that uncertainty persists, but what could you believe – what do you believe could represent the biggest driver to license growth? Would it be a market recovery or is it re-platform WMS, is it strengthening partner leverage or is it something else?

I think, Michael, that it will likely be all of the above. As Dennis mentioned in his comments, we are believing the 2010 economic environment will be similar to the second half of 2009, not as weary as the first half but similar to the second half. We believe it could be better for us as a company if the economy improves a little bit more than the economic activity in the second half of ’09. So that certainly would be a meaningful driver. We are also optimistic that we’ve materially improved the value of the solutions we bring to market. As I mentioned in our prepared remarks, we believe our – delivering of WMS on the platform is a major achievement for our company. We're equally delighted with the advancements we've made in our other solutions as well. We believe the combination of WMS on the platform as well as our other 20 plus solutions also on the platform is a very compelling value proposition for supply chain and IT executives. Both the functional advancements and the rich cross-application optimization are now available on our solutions as well as a very attractive total cost of ownership benefits, I believe will make a material difference on our selling success hopefully in 2010, but certainly over the long run. Michael Huang – ThinkEquity: Could you talk about – are there any secular trends that are driving re-platforming, so for example as organizations are looking to drive some multi-channel commerce program or trying to drive some sophisticated online presences, could you talk about whether or not you think that that could help you offset a really tough spending environment and drive some urgency with respect to re-platforming their WMS or Order Management or Transportation?

Sure, I’d be happy to. Certainly just from a macro perspective, vertical market perspective, a number of us attended the National Retail Federation conference couple of weeks ago in New York, and we were encouraged by the enthusiasm of retailers. So while – and they have a pretty steep slope decline to come back from ’08 and ’09 we are encouraged by the level of activity and the need they saw to move a little bit more quickly to re-platform in your words. Part of that, I think one of the strongest areas that most retailers saw in their business in 2009 was their e-commerce initiatives. Sales across the board in e-commerce were impressive, even in the tough economic environment. And I believe what many retailers are recognizing is the value of the importance of integrating each of their channels to better delight their customers, but also to improve the efficiency of their supply chains of their businesses. So better allocate inventory to the right customer sets, getting the right product to the right place at the right time and doing all of that, limiting the amount of capital invested in their inventory and also maintaining efficient transportation networks. So I certainly think from a secure perspective the move to integrate multi-channel offerings is meaningful opportunity for Manhattan. And just one other quick one there, I don’t want to delay with this point too long, but we launched a major campaign in the latter part of 2009 that we were calling Zero Disappointment Retailing. And our point of view there is by leveraging advancements in information technology retailers and consumer goods companies can improve the effectiveness of their go-to market strategies and make sure that they are delighting their customers. So how do they get to the point of having zero disappointments in their customer base, and we believe with applications like ours, particularly those that are integrated across our platform are material opportunities for companies to improve their value proposition. Michael Huang – ThinkEquity: Okay. In terms of just the license performance in Q4, obviously you saw some sequential growth despite fewer larger deals. Could you just talk about whether or not there are things that you guys are doing differently from a sales execution standpoint? Was this more of an end of your seasonal flush, like what was helping drive the volume of deals that you got done? How does that trend at least through Q1, Q2 based on pipelines that you see?

: Michael Huang – ThinkEquity: Okay. And last question, just with respect to pipeline, how is that looking entering Q1 versus what you had going into Q4. I would imagine that continues to build pretty nicely.

Yes, we are pretty pleased with where the pipeline is at the moment. We entered Q4 with a solid pipeline and we are entering Q1 with an attractive pipeline. We are encouraged, as I mentioned, with the energy level at the National Retail Federation conference, and in conservations we are having with other vertical markets that we do business in. At the same time, as Dennis mentioned in his comments, we still find it difficult to determine what the last two weeks of March might bring. So we are hesitant to get too bullish in the intermediate term, but we certainly like where we are positioned. I believe we are valued by our customers, and believe as customers get more and more comfortable freeing up capital for supply chain improvement programs we will be at or near the top of the list. Michael Huang – ThinkEquity: Great. Thanks very much.

Thanks, Michael.

Your next question comes from the line of Eric Lemus from Raymond James. Your line is open. Eric Lemus – Raymond James: Hello, gentlemen. Thank you for taking my call today. Several questions here; my first one, how should we think with the potential mix of business of WMS or supply chain execution, and then your planning business over the next couple of years on a percentage of license revenue basis as well as the respective growth rates?

Yes, it’s a great question. I would think – at least for our planning purposes, we are planning for those to be similar going forward. For 2009 in the fourth quarter about half of our license revenue was WMS, half was non-WMS. The majority of the non-WMS revenue is Transportation, Inventory Optimization, and Order Lifecycle Management. We have not had as much success in the planning category as we’d like. We are quite focused in trying to improve our success in the supply chain planning space. I believe we're making appropriate investments to enhance our market offering in that space and believe we have some real opportunities to do so, particularly as we continue to build out our platform go-to market strategy. But WMS is a very important market to us. We expect it will continue to be a very important market for us. But we are quite excited about some of our newer applications. The Order Lifecycle Management application is quite attractive. It’s one of the enabling technologies that allow customers to truly integrate their multiple channel offerings in a cost-efficient way, and believe some of the advances we brought to market in that solution are quite attractive. And we are quite pleased with our Inventory Optimization solution as well. So between Transportation, Order Lifecycle Management, Inventory Optimization complementing our warehouse management and distribution management suite of solutions we believe we will see solid growth in our application space. But clearly WMS is an important part and one of the reasons we are very excited about getting that on our platform. Eric Lemus – Raymond James: Great. And then any commentary on where points of margin leverage are more notable over the next year or so? And secondly, anything longer term on an operating margin bogey, 15%, mid-teens or something similar?

Yes, sure. Eric, we’ve stated long term, once the market starts to self correct or what the new normal is our objective within a three-year horizon is to get to 20% operating margins. We need to get through 2010 and see how the market recovers, and we will evaluate that time horizon. In terms of leverage within the business, we’ve always stated that license leverage is a big point for us, leverage on G&A as we get top line growth and leverage on our R&D investment. Eric Lemus – Raymond James: Okay, great. Anymore feedback from customers and prospects on a scope and any perspective on how or when it could possibly start benefitting business and/or win rate, more of a 2011 thing or early in 2010?

Yes. We are quite optimistic that will affect business beginning in Q1. We took the opportunity in the early part of this year to allow a couple of our business partners to take a look under the hood a little bit before our G&A date and feedback was very positive. In fact, a couple of sales in Q4 have started their implementations in 2010 and we are already implementing the warehouse management solution on the platform as well as with another upgrade. So we are quite encouraged by the initial start and we are optimistic that will be a competitive advantage to us beginning early in 2010. Eric Lemus – Raymond James: Okay, great. Thank you.

Thanks, Eric.

(Operator instructions) Your next question comes from the line of Mark Schappel for The Benchmark Company. Your line is open. Mark Schappel – The Benchmark Company: Hi, good evening. Pete, on a percentage of sale basis, R&D has been bouncing around pretty close to historical low for the company. I was wondering what we should expect going forward, whether we should expect it stay around these levels or do you have any plans to kick that back up pretty big?

Yes, Mark, we take a look at R&D as a percent of overall revenue and when I've looked at it we generally spend somewhere in the 14% to 15% of revenue, I think that’s been the case for about the past five years. It probably bounces a little bit quarter to quarter based on accrued incentive compensation and so forth. But for I think the last four or five years, we've been ballpark 14% to 15% of total revenue has been invested in R&D, and our view is that around that range will likely to continue. When we look across the competitive landscape, most of the successful software companies invest somewhere in that 14%, 15%, 13% range, and we believe companies investing less than that are effectively short-changing the future. So we believe there's some real opportunities for us to continue to invest at that level to extend our competitive advantage and reward shareholders in the long run, and that’s our plan at the moment. Mark Schappel – The Benchmark Company: Okay, thanks. And Dennis, the operating margin expansion guidelines that you called for about 50 basis point improvement in the next year. I believe though on the prior call, in the third quarter call, you were expecting closer to 100 basis point improvement, would the difference be principally the foreign exchange comments that you made?

There is a couple of differences there Mark. One is the impact of FX. The other is the adoption of the equity plan program where we have increased incremental expense associated with the restricted stock. And that’s about $2 million incremental impact. So on an apples-to-apples basis, we are absorbing about 100 basis point pressure on the margin line for 2010 with the new equity program. So equity program and FX are the two drivers. Mark Schappel – The Benchmark Company: Thank you.

I think, Mark, everyone on the call, I'm sure knows this we are just planning out stock options which in our old program have been eliminated. They did not have an impact on adjusted EPS.

There are no further questions at this time.

Thank you, everyone for joining us. We look forward to sharing with you our Q1 update in about 90 days. Good night.