Good afternoon. My name is Jessica, and I will be our conference facilitator today. At this time, I'd like to welcome everyone to the Manhattan Associates First Quarter 2011 Earnings Conference Call. [Operator Instructions] I would now like to introduce Dennis Story of Manhattan Associates. Mr. Story, you may begin your conference.

Thank you, Jessica, and good afternoon, everyone. Welcome to Manhattan Associates 2011 First 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 2010 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'll turn the call over to Pete.

Thanks, Dennis. I'll start the call with an overview of our performance in the first quarter. Dennis will follow with details about our financial results, and I'll return to cover operating activities for the quarter. And then, we'll be happy to answer your questions. Adjusted earnings per share for the first quarter was $0.41. That's up $0.01 from last year. I'm pleased with our financial results in all areas but one, license revenue. We posted disappointing license revenue of $7.8 million in the quarter. That miss was offset by solid revenue growth in services, expense management and an India tax adjustment. Our competitive win rate in the quarter was very strong at almost 80%. However, similar to last quarter, not enough large deals closed this quarter. We had only one large deal with recognized revenue greater than $1 million in the quarter. Unfortunately, the same lack of urgency that delayed large deal closings in Q4 of last year is still a factor. We continue to have a very healthy pipeline of large deals and high confidence that Manhattan will be selected when those deals do close. I'll provide more color about this following Dennis' review of our financial results. Dennis?

Thanks, Pete. As you know, our Q1 earnings were constrained by lower license revenue while at the same time underpinned by services revenue growth, strong services margins, expense control and a timely tax benefit. Pete will provide more perspective on our license revenue result and outlook in his comments. But before I jump into the results, let me remind you, we are now reporting adjusted results, excluding restricted stock, and our prior year results have been updated accordingly to reflect this change. Our supplemental schedules included in today's earnings release provide all of the details. So here's our financial summary for the first quarter. First, Q1 license revenue of $7.8 million decreased from $14.2 million in Q1 2010 and declined sequentially from $12.7 million in Q4 2010. Secondly, Q1 services revenue increased 5% year-over-year as demand continues to be strong. This 5% growth rate is artificially low due to previously deferred services revenue included in the Q1 2010 results. Apples-to-apples, our consulting revenue is up 11% year-over-year. And in addition, our services backlog is quite healthy. 3, margins are strong. In a tough license quarter, we achieved a gross margin of 55.2%, delivering services margins of 56.1% and a solid operating margin of 14.5%. We remain committed to achieving our year-over-year operating margin expansion objectives. 4, adjusted earnings per share of $0.41 increased 3% over the $0.40 we reported in Q1 2010. And on a GAAP basis, we delivered earnings per share of $0.32 even with the $0.32 delivered in the prior year. 5, our Q1 adjusted effective tax rate was 14.1% against our plan of 34.5% due primarily to a change in the tax laws in India, resulting in a tax benefit of approximately $2 million or $0.09 of EPS benefit in the quarter. 6, operating cash flow remained…

Thanks, Dennis. Q1 was a frustrating quarter for recognized license revenue. Our selling teams around the world and, in particular, the U.S. are very busy. The activity level is encouraging but the close rates frustrating. Because all software is often just a part of much larger capital commitments to facilities and material handling equipment, lingering uncertainty in the global macro environment affects our close rate, particularly for $1 million-plus deals. Some prospects continue to suffer through using existing solutions, waiting for the right time to invest. With each passing quarter, these legacy system age and pent up demand grows. For Q1 2011, the one large deal closed in the quarter was with an existing customer for our Warehouse Management solution. For comparison, in Q1 2007, we closed 3 large deals; 2008, 4; 2009, 0; and Q1 2010, we closed four $1 million-plus transactions. Our revenue goals are based on closing three to four $1 million-plus deals in each quarter. Our 2011 pipeline for potential $1 million-plus deals is more than healthy enough to support that pace. With anything close to normal close rates, we would meet or exceed the 3 to 4 per quarter requirement. As confidence in making larger capital commitments to supply chain transformations returns, I'm quite confident our win rate on those deals will continue lead the market. In Q1, about 70% of our license revenue was with existing clients and about the same figure came from Warehouse Management systems. Retail, along with consumer goods and third-party logistics, once again accounted for more than half of license revenue. During the quarter, we took more than 65 client sites live on our solutions. I'm quite happy to report that we now have 7 clients and 17 sites live on our platform-based Warehouse Management system, which we released in…

[Operator Instructions] Your first question comes from the line of Terry Tillman from Raymond James. Terrell Tillman - Raymond James & Associates, Inc.: I guess, Peter, Dennis, can you talk a little bit more about the services backlog because I guess that's been the shining star here over the last couple quarters? Anything to quantify the strength of the services pipeline. Is it accelerating, or is it still strong? But are you starting to see it ebb a bit because of the recent license weakness?

Yes, I'd be happy to take the first crack at that. Terry, it's Pete. Actually, our services pipeline strength actually is consistent with some of the weakness we've seen in license revenue. Clients of Manhattan Associates and I believe others continue to invest modestly in enhancing what they currently have installed, either with our systems or other legacy applications, modifications to improve business performance, upgrades to improve business performance and adapt to newer technologies are some of the motivations for our strong services revenue. We believe we'll see that continue even with a somewhat disappointing license revenue result in Q1. We believe optimistically that as the economy improves, we'll get even further demand for our services capability. I mentioned in my prepared remarks, we're expecting to add about 100 people over the balance of the year. And most of those folks will be in professional services roles. So we have a nice backlog of work we need to do to continue to meet our customers' demands, and we expect as the economy continues to make slow but consistent improvements that the demand for our services will grow similarly. Terrell Tillman - Raymond James & Associates, Inc.: Okay. So I guess on the services side, I mean sometimes there can be debates, the services as a leading, incidental or lagging indicator. So in this case, you're saying it's more a reflection of the environment and there's still frugalness and doing more with what you have and optimizing what you currently have. Is there nothing to be said in terms of the recent resiliency in services strength to anything that's a leading indicator? Because what I'm getting at is about idea as this platform initiative continues to take hold that, yes, it's going to maybe drive some services and some upgrades, but, also, it can lead to other module sales, thus helping license.

Sure, sure. Obviously, Terry, that is one of the key points behind our strategy. We're quite optimistic given the activity that's taking place now, a request for proposal, demonstrations, site visits and so forth, that our platform strategy resonates very well. And as companies begin to make larger investments in transforming their supply chains, we'll be significant beneficiaries of that. You may recall, Terry, we've talked about in previous conference calls that our services revenue is largely made up of 3 components. One component is installing software for and configuring software for new sales. Second component is upgrades for existing customers. And a third component is enhancements or extensions to further enable existing customers to get greater benefit out of their software. In this kind of environment where, at least in supply chain, where there are significant additional capital commitments required to transform supply chains, the new install demand is a little less than we had hoped. But in that same environment, the demand from clients for the other 2 components, enhancements and upgrades, continues to be strong and we would expect that to continue. And frankly, we think that is greatly aided by our investments in our platform. The demands of existing customers or the request of existing customers to upgrade from some of our previous releases to our platform-based WMS release is quite encouraging. So we believe we have ample opportunity to continue to perform well in our Services business and look for the upside as the license revenue market gets stronger. Terrell Tillman - Raymond James & Associates, Inc.: Okay. And I guess, you guys give a lot of color in terms of how to build or update our models. And I know you all don't want to give quarterly specific license, but you give us parameters. And I guess after the first quarter sluggishness and you talked about third quarter seasonality, I mean should we be thinking that if the License business is to see resurgent demand, it's going to be just heavily weighted in 4Q? Or is there anything that can be said about potentially 2Q as we're doing our models that we could see some sort of notable uplift from the first quarter levels on the license side?

Yes, Terry, as you know, Q2 and Q4 historically have been stronger revenue quarters for us; Q1 and Q3 weaker. We certainly would expect Q2 of this year to be noticeably stronger than Q1 of this year. So we would expect a nice improvement in Q2 license revenue from the Q1 result. Do I believe we'll be able to recapture everything we had hoped to land in Q1 and Q2? Probably not. I believe that would take longer, but there is always that possibility. But we're very focused on making sure that our win rate stays quite high, and that we'll continue to do everything to drive customer satisfaction. And the selling and marketing teams continue to be quite engaged in driving customer support for Manhattan's applications.

Yes, Terry, this is Dennis. I mentioned in the script that we expect total revenue to be roughly about equal for the last 3 quarters. The point in that being is our forecast is not a hockey stick in the back half of the year. Terrell Tillman - Raymond James & Associates, Inc.: Okay. But you're not necessarily shifting around the components on the top line. You're still looking for kind of what you had been thinking internally before on your license growth as well as in the services and then hardware side. Or has there been any shift, at least for your all's internal models, on those 3 line items?

More or less similar, Terry. Obviously, with the disappointment in Q1 in license, it may be some shift. But directionally, I think the initial expectations hold.

[Operator Instructions] Your next question comes from the line of Mark Schappel from Benchmark.

Pete, starting with you, given that this is the second consecutive quarter of trouble on the license line with the large deals, what gives you confidence that your close rates on these deals is going to improve in the next quarter or two?

Yes, it's a great question, Mark. I don't have a crystal ball to help us with when these deals will close. What gives us confidence is our win rates and the deals that have closed, both throughout 2010 and Q1 2011, are very high, so we feel very good about our top line position with prospects and others. In addition, we have seen a lot of new activity in the sales pipelines. For instance, in the first quarter, we saw a very nice uptick of additional interests of $1 million-plus deals within our sweet spot of retail supply chain transformations. Now can we more accurately forecast when those deals will close? Probably not. There's still I think a little bit too much noise in the marketplace. A couple of those could close in 2011. A few more will probably close in 2012. But the activity level is picking up, and the support we're getting for our platform strategy is very encouraging. I don't have a very good sense of when that delay or that lack of sense of urgency will mitigate, but we're cautiously optimistic. With each new drop of positive feedback from the marketplace, we get more and more enthusiastic. As I said in my prepared remarks, if we can get the license revenue closure rate to improve, our financial results, we believe, will be quite impressive.

Okay, fair enough. And then in the past, when gasoline prices have jumped up, your customers have paid a little bit more attention to your transportation planning products, looking to reduce their gas costs at the margin. And with gas prices bumping up to about $4 a gallon now, I was wondering if you're seeing similar customer interests like you've had in the past.

Yes, the interest is starting to pick up, Mark. It's kind of interesting, fuel prices had bounced around quite a bit in the past 12, 18 months, 24 months. And depending upon your perspective, that will influence some of your strategies. These systems though do take a little bit of time to implement and so forth. So I would expect, as has been the case in the past, there's a little bit of a lag between spikes in oil prices and the demand for enhanced transportation solutions, particularly the type that Manhattan offers with significant optimization algorithms embedded in them. So we're optimistic over the balance of 2011 and looking out further, that there'll be considerable demand for transportation solutions. Again, we think we have a meaningful competitive advantage in that space with our transportation solution on the same supply chain process platform as our Warehouse Management and each of our other applications and believe that we can bring enhanced value to that opportunity to minimize the impact of higher oil prices.

Okay. And then finally, I was wondering if you can just provide us a little bit of an update of that large project with a hardware customer and just give us an idea of how that project's proceeding.

Yes. It's going well, Mark. It's progressing right on schedule. They're pleased at this point and we're pleased with the progress, and we're optimistic that everything will maintain that kind of momentum. But so far, it's going quite well.

There are no further questions at this time.

Thank you, everyone. We greatly appreciate your spending some time with us this afternoon, and we look forward to catching up with you in about 90 days. Good evening.

This concludes today's conference call. You may now disconnect.