Good afternoon. My name is Christopher and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates third quarter 2010 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 period. (Operator instructions) As a reminder, ladies and gentlemen, this call is being recorded today, October 19th, 2010. I would now like to introduce Dennis Story of Manhattan Associates. Mr. Story, you may begin your conference.

Thank you, Christopher, and good afternoon, everyone. Welcome to Manhattan Associates 2010 third 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 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 2009 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 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 third quarter earnings call. I'll start by reviewing highlights from the quarter. Dennis will then get into the details of our financial results. I'll follow with additional details about our business. And then, we'll move to questions. As noted in our press release, we posted solid financial results in our third quarter of 2010. We recorded license revenue in the quarter of a little more than $12 million, up about 6% versus last year. As you know, Q3 has historically been our lowest license fee quarter and we expect that to be the case once again this year. For the quarter, we recognized two million-plus-dollar license revenue deals. One was in the Americas with an existing retail customer where we expanded our warehouse management relationship by adding labor management and slotting optimization. The other was in Europe with a new customer for distribution management. In addition to these two large deals, we closed another million-plus license deal, but will delay recognizing license revenue to future periods. This new client is a very large global information technology provider and one of the very few that offers to the market a highly regarded technology platform. As part of our contract, we agreed to certify our solutions on that client's technology platform, which we have done in the past for other clients. However, since we've contracted to certify our solutions on this technology, for each of the next five years we will recognize the license revenue ratably over the term of the contract, beginning with our delivery of certified software to the client in Q1 of 2011. Although we aren't recording license revenue in this quarter from this contract, it is a very important win for Manhattan. The client has made many acquisitions over the past few years and as a result, already owns supply chain technology from SAP, Oracle, RedPrairie and others, though not Manhattan. Nonetheless, after careful evaluation, our superior solutions won. In addition to a large license fee, our professional services teams will be assisting this client with a multiyear global deployment of warehouse management, extended enterprise management, distributed order management and other solutions. Our SCOPE solution suite and our platform strategy played very well with this client. Overall, our platform strategy continues to resonate very well in the market. That's illustrated by our strong competitive win rate in the quarter of about two wins out of every three potential deals versus our major competitors. Importantly, we are winning the large strategic deals. Our implementations of warehouse management on our platform continue to progress well and I'll comment more about that following Dennis' remarks. Year-to-date, license revenue has more than doubled since last year. Overall, revenue growth is 22% and adjusted earnings per share of $1.06 is greater than full year 2009 and up 63% versus last year. We expect Q4 to be another successful quarter for us. Dennis will now provide some details.

Thanks, Pete. Manhattan delivered another strong quarter of financial results, marking our third consecutive quarter of double-digit revenue growth, delivering $74 million in total revenue and $0.32 in adjusted earnings per share, setting a pace to exit 2010 achieving a solid rebound year, off an aberrant 2009 comparison. Revenue comps in the second half are definitely firming up as the business returns to more typical seasonality on revenues and barring another macroeconomic catastrophe, expense comps will largely normalize in 2011 versus 2010 as we look to pose back-to-back revenue and earnings growth years. Highlights for the third quarter are one, license revenue of $12.1 million increased 6%. Business activity and visibility continues to normalize as we close three million-dollar-plus deals, only two of which are reflected in this quarter's license revenue. Two, services revenue increased 14% year-over-year, led by 23% growth in consulting revenue as positive license performance over the past five quarters is driving current growth. In fact, we are actively recruiting as services demand continues to exceed capacity. Three, adjusted earnings per share of $0.32 was down from $0.43 in 2009. However, on an apples-to-apples basis, adjusting for the impact of 2009 short-term compensation reduction measures that were restored in 2010 combined with lower 2009 performance based compensation and income tax expense, all of these which totaled about $0.20 of EPS, EPS grew nearly 39%. We all know 2009 was a tough year. So the point of this comparison is simply to be clear that the core underlying fundamentals of the business are strong and delivering great financial leverage. Four, we continue to maintain our meaningful strategic investments in R&D, investing $0.13 of every revenue dollar to deliver competitively superior solutions. Five, operating cash flow continues to be strong, delivering $11.5 million in the quarter and $35 million…

Thanks, Dennis. Here are some of the business highlights of the quarter. We added many new customers and expanded relationships with many existing customers across all regions during the quarter. A list of those that have agreed to allow us to use their names is included in our press release. As I mentioned in my opening comments, we closed three million-plus-dollar deals in the quarter, two of which had recognized license revenue in the quarter. The retail, consumer goods, and logistics service provider verticals were once again strong contributors to our license fees. And together, these sectors represented more than half of license revenue in the quarter. About 75% of the quarter's license revenue was from existing customers and about 25% from new customers. About 60% of the quarter's license revenue was for warehouse management solutions and about 40% for our other supply chain solutions. We continue to drive customer satisfaction across the globe. And in Q3, our professional services teams helped take about 100 sites live with our solutions. Today, we have two client sites live with our platform based warehouse management solution and about a dozen more in various stages of implementation. These implementations continue to progress well. I believe our relative competitive position has never been stronger. The primary way we strengthened our position and will continue to improve it is through important investments in our products, our technology, and our people. We continue to make significant investments in research and development. One-third of our global staff is in R&D. In Q3, R&D accounted for about 13% of our total revenue. That is down a bit from our historic level and we expect to remain at about that level going forward. At the end of September, we had about 1,900 employees around the world. That's an increase…

(Operator instructions) We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Terry Tillman from Raymond James. Your line is now open. Terry Tillman – Raymond James: Yes, good afternoon, guys. Thanks for the time for my questions. I guess, Pete, first question just relates to – you all have emphasized several times this large deal. It sounds like maybe it's kind of a milestone deal. If I'm on the right path, I mean, can you give us a little bit more color – I mean, because you do sign million-dollar deals every quarter and sometimes they are just a little over a million. I know you can't give any real exact detail, but is this a multi-million dollar type license transaction first of all? And second of all, do we at least see some service revenue into the fourth quarter? And then, how do we think about the license revenue being recognized ratably over the next year or so?

Yes, sure, Terry. I will share with you what we can. As you can imagine, in most of our contracts, we agree to a reasonable level of confidentiality for our clients. So I'll share with you what I think is appropriate. It was a large deal for us, was above $1 million. I can't give you anything more specific than that, but they were quite excited about that. And as I mentioned in my prepared remarks, we are also quite excited about the services opportunity for us over the next couple of years, helping roll out solutions globally for that large client, quite excited about it. One of the reasons why we did raise this in the call, strategically a very important win for us, competitively very important win for us. In addition though, I think this sales cycle was a well publicized sales cycle. Several of you that are on the call had heard about it and had asked us about it in the past. And in the spirit of full disclosure and transparency, we thought it was important since some of the folks on the call were aware of the deal that we shared that with everyone. So it is a large deal strategically and competitively very important that that should have very positive economic benefits for Manhattan beginning in 2011. We don't expect to see services revenue of any proportion until 2011. Terry Tillman – Raymond James: Okay. And Pete, I guess as a follow-up on the license business, let's exclude this – kind of this situation. How was that kind of meat-and-potatoes business, the mid-6 figure deals? Last quarter, you talked about seeing a broadening of recovery to maybe more Tier 2 type opportunities. I didn't hear anything on the call. I mean, can you give us sense on how the broader business did per your expectations on the license side?

Yes. Overall, Terry, we were quite pleased with the quarter, the activity level, what closed, the size of deals, and the mix of deals, verticals, geography. As you – I think you well know, Q3 has historically been our lowest license revenue quarter and that will play out that way I believe for 2010. But overall, we were pleased, the activity level is good in all three regions, the type of business we are talking about is quite attractive. As I mentioned in my prepared remarks, we are quite pleased with our competitive win rate. We believe that the strategic deals are coming to Manhattan Associates and we expect that to continue. Having said that, certainly the economy is still difficult, sales cycles are longer than they were several years ago and we expect that continue to be lengthened beyond what we had gotten used to in the mid part of this decade, so things are back to the way clients had purchased software a coupe of year ago. But having said that, in this environment, we are quite pleased with the results, the size of the pipeline, the activity of our sales team, and the momentum we have built with our new suite of solutions. So we feel very good about the quarter and the prospects looking at Q4 and 2011. Terry Tillman – Raymond James: Yes. And thank you on that. And I guess the last question, I can't help it, Dennis – I mean, you broached the subject of 2011. You are talking about the idea of restricted stock and because you don't exclude that, I mean it's a material impact I guess to what your margins otherwise would be relative to all of your peer group. Is there any thought at a point that maybe after fourth quarter and we get into next year and if you give any kind of guidance like you did this year for EPS, why not start to give EPS guidance that excludes the impact of restricted stock if it's so much different and would be more in line with the others? Thank you, guys.

Yes. We are not taking any option off the table at this stage, Terry. But it's early in terms of deciding how we are going to go with guidance for 2011.

It's a great question though, Terry. Thanks.

Your next question comes from the line of Mark Schappel from The Benchmark Company. Your line is now open. Mark Schappel – The Benchmark Company: Hi, good evening. Pete, during the past few quarters or so, your order lifecycle management solutions have been playing an increasing role in your product and your sales line. I'm just curious how they did this quarter and whether they played a role in the large deal that came through.

Great question, Mark. We have been pleased with the momentum we are building in order cycle management. We think we have got a unique value proposition for the marketplace and in particular for companies that have multi-channel operations that are trying to more efficiency serve those channels without building up excess inventories or multiple inventories. I'm pretty sure I mentioned in my prepared remarks that one of the solutions we did sell to that deal that was closed in the quarter but not recognized included order lifecycle management. We think that was one of the solutions that differentiated us from our competitors and we think that was one of the important factors that allowed us to win that deal. So we are pleased about that and we continue to make good progress with that solution as a differentiator in the market space. Again, we think the market is looking for ways to improve efficiency and drive inventory out of the supply chain, while maintaining or improving customer satisfaction and we think our order lifecycle management solution is a big participant in that direction. Mark Schappel – The Benchmark Company: Okay, thanks. And I was wondering, Pete, if you could just give us your thoughts on what you are seeing as far as customer interest on – with respect to on-demand warehouse management and transportation planning solutions. As you know, one of your competitors purchased a small cloud-based WMS vendor, I think it was in the spring. I was wondering if you are seeing any customer interest there.

Yes, Mark, we have been quite active in Software as a Service for several years. I know you know about eight or so years ago, we acquired a company, Logistics.com was its name at that time that offered Software as a Service for transportation solutions. We have added to that modestly with a few clients in inventory optimization Software as a Service and have been working closely with our customers and prospects trying to gauge the market's appetite for SaaS solutions. Clearly, we believe we are well positioned if the market has an appetite for SaaS solutions to be able to provide that as we have done that for now approaching a decade. We have not seen though in our target market. So our target market is larger companies that have complex supply chain challenges. We have not seen an appetite for distribution management as a software as a solution shared environment offering. I believe that probably will have appeal to very small companies and I think that could be a useful solution to those small companies, but that's a very different business model than business model that Manhattan is in. Our target market is Tier 3, 2, and 1, the larger organizations with complex supply chain needs. And at this point, it's been clear feedback to us that they are looking for packaged application software with sophisticated functionality that can help them optimize their supply chains and at least at this point aren’t looking for that in a multi-tenant Software as a Service environment where they might give up ability to package that solution to best meet their needs. But as I said, we have quite a bit of experience in that space and if that market begins to move in that direction, we believe we are well prepared to do that. But frankly, we don't believe we are going to see a lot of appetite from larger companies for that, particularly in distribution management. Mark Schappel – The Benchmark Company: Thank you.

Thanks, Mark.

(Operator instructions) Your next question comes from the line of Brad Reback from Oppenheimer. Your line is now open. Brad Reback – Oppenheimer: Hi guys, how are you?

Good, Brad.

Brad. Brad Reback – Oppenheimer: So Pete and Dennis, on this really big deal in the tech sector that you signed, you talked about a significant amount of services going forward. Given the base load that will give your service organizations, should that enable you to take a step function up in margins – gross margins in that business going forward or should we still think about that as where it's been historically?

I would – for planning purposes, Brad, I would say it's probably going to be in line with what we have done historically. We had a bit of a shortage in 2010 of staff. So our staff has worked especially hard in 2010 to try to meet customer expectations, customer needs, and so forth. And as we have said on a couple of calls, we are trying to add more people to our services team to improve the sustainability of our position and to ensure customer satisfaction. So I think Dennis had in his comments what to expect for Q4. I would expect for planning purposes margin success in line with what we have recently achieved would be reasonable. Now, I do want point out that those margins are the best in the world for professional services organizations. We are quite proud of the gross margins we are able to drive in our services business and very excited about being able to maintain that going forward on a larger revenue base. But I do think given the large deal that we've signed and the tail of services that will have that will certainly add to the revenue outlook for that business. But I forecast the margin on that in line with our recent experience. Brad Reback – Oppenheimer: Thanks a lot.

Good. Thank you, Brad.

There are no further questions at this time.

Very good. Well, I would like to thank everyone for joining us for the call and we look forward to speaking with again in about 90 days. Have a good night.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.