Good afternoon. My name is Jessica, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Manhattan Associates Second Quarter 2011 Earnings Conference Call. [Operator Instructions] Dennis Story, Chief Financial Officer, you may begin your conference.

Thank you very much, Jessica, and good afternoon, everyone. Welcome to Manhattan Associates' 2011 Second Quarter Earnings Call. I will review our cautionary language and then turn the call over to Pete Sinisgallii, 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're 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, and welcome to our second quarter earnings call. I'll start the call by taking you through an overview of the quarter. Dennis will follow with details of our financial results. I'll return for a general business update and then we'll be happy to answer your questions. We're quite pleased with our second quarter financial results and continue to be encouraged by our near-term and long-term prospects. Dennis will provide the details shortly, but essentially all of our Q2 financial metrics were outstanding. And more importantly, our longer term strategic metrics were equally strong. Over the past several quarters, we've mentioned that we were working on a substantial large deal pipeline and we're optimistic that once customers and prospects were more comfortable with the outlook of their businesses, we'd return to closing $3 million to $4 million-plus deals in those quarters. As an indication that customers in our target markets are becoming more optimistic about their businesses, in Q2, we closed 4 deals with license revenue of $1 million or more. Here are 2 encouraging metrics regarding the large deals that closed in Q2. Three of the 4 were new customers from Manhattan and one was in Europe. And another sign that customers in our target markets are getting more comfortable about the prospects for their businesses, over 55% of license revenue for the quarter was sold to new customers and our pipelines and activity levels for Q3, Q4 and 2012 are encouraging. Other important long-term strategic indicators are also quite positive. Our investments in research and development over the past several years are really paying off, as indicated by continued strength versus our competitors. Our win-loss rate continues to be strong and in the first half of 2011 was about 75%, meaning we won 3 out of every 4 deals we competed in. And to further support our sales momentum, implementations of our scope, supply chain process platform solutions continue to be quite successful. While questions certainly remain regarding the health and direction of the global economy, we believe we're well-positioned for continued success. I believe our ability to execute and our commitment to innovation will be well rewarded in the future. I'll speak more about this following Dennis' comments. Dennis?

Thanks, Pete. No question Q2's financial results benefited from a strong uptick in license revenue performance combined with solid execution across all other revenue lines, effective expense control and good capital structure management. Despite lingering economic volatility and uncertainty, it was good to see many of our customers and prospects investing in their supply chains again. Before I get into the results in detail, I would like to summarize the key Q2 financial takeaways. Number one, revenue growth in the demand environment is certainly improving. Total revenue of $88.4 million increased 14% on strong license and services revenue performance. Number two, operating profit and margin expansion objectives continue to drive earnings leverage. Manhattan Associates posted an all-time record quarterly adjusted earnings per share of $0.65 and GAAP earnings per share of $0.57, growing at 55% and 58%, respectively. First half adjusted EPS of $1.06 is a record as well, growing 29%, and GAAP EPS of $0.89 increased 31% over 2010. Excluding the $0.09 India tax benefit realized in Q1 2011, on an apples-to-apples basis, year-to-date adjusted and GAAP EPS increased 18% versus 2010. So number three, services demand is exceeding capacity. In Q2, we had nearly 100 net new associates and our headcount is up more than 160 net new associates versus our staffing level in Q2 2010. The increase is almost entirely within professional services to support demand and continued customer satisfaction. Number four, operating cash flow continues to be strong. We generated $16 million in operating cash flow for the quarter and $24.1 million year-to-date. Number five, our balance sheet continues to support long-term strategic flexibility and stability. Cash investments for the quarter totaled $110 million with a cash-to-asset ratio of 40% and no debt. Number six, our capital structure is efficient and well-managed. Our share buyback program…

Thanks, Dennis. As Dennis mentioned, we posted license revenue of $16.3 million in the quarter with 4 large deals. Each of the 3 large deals in the U.S. was led by our platform-based Warehouse Management solution. Two of the three were with new customers and one with an existing customer. The existing customer is upgrading our previously installed WM solution to our platform-based solution and expanding the use of our solution to additional sites. Both of the new customers are large retailers transforming their supply chains. We are thrilled to see the return of large retailers making substantial investments in supply chain transformations and are optimistic this trend will continue. The Europe large deal was driven by our Extended Enterprise Management solution that allows companies to collaborate across their supply chain networks. While I am on the topic of large deals, although below $1 million in recognized license revenue, we set a new record during the quarter with our largest sale ever of Manhattan SCALE, our Microsoft-based Warehouse Management solution. About 60% of the quarter's license revenue came from Warehouse Management sales and about 40% from our other solutions. The retail vertical was particularly strong this quarter making up about half of license revenue. And as I mentioned in my opening comments, about 55% of license revenue in the quarter came from new customers. That compares to the last 4 quarters when 30% or less of license revenue was from new customers. Obviously, returning to a more normal large deal closed rate with new customers strongly influences this metric. Some of the new customers that have allowed us to share their names include Bollore Logistics, Copernica, Devanlay, Michael Kors, MWI Veterinary Supply, Precision Planting, Starbucks and Westco. We're quite excited about each of these new customers, but particularly thrilled to…

[Operator Instructions] Your first question comes from the line of Terry Tillman from Raymond James. Terrell Tillman - Raymond James & Associates, Inc.: Just a couple of questions. I guess, Pete, in terms of the license performance in the quarter. I was wondering if maybe you could dissect a little bit quantitatively in terms of -- if you can separate the benefit from a couple of quarters of deals that had slipped as opposed to naturally occurring new business that you expected to play out in the quarter?

Sure, Terri. Certainly, one of the deals that we closed in the quarter we had thought would likely close in Q1 and it did slip. The other 3 large deals haven't been in our pipeline for some time. So there certainly has been some pent-up demand. So that certainly was a factor in the 4 deals that closed in the second quarter. But as both Dennis and I mentioned in our comments, we're quite enthusiastic about the large deal pipeline we're currently working. It's been growing over the past couple of quarters. We're quite excited about that. And the activity level within those larger deals continue to be quite good. So we're optimistic that the performance we saw in Q2 as long as there's not some large macro event to upset the current economic situation that we'll be able to maintain that kind of momentum. Terrell Tillman - Raymond James & Associates, Inc.: Okay. And I guess a lot of the retailers and suppliers at retail [ph] are talking about e-commerce, the effect on the business for retailers is becoming quite material for the revenue and then this concept of multi-channel, the challenges brings. It seems like it's a tailwind. But could you help us understand how you monetize that or how you're doing it currently? Is it just driving additional license sales in the installed base for more WMS? Or is it you're signing a lot more units for the Lifecycle Order Management product or it's driving large new RFEs around transformation projects? Maybe just a little bit about how meaningful this is and how excited should we be about the idea of multichannel e-commerce?

Yes, actually, Terri, in the retail channel we have a number of things going for us that I think put us in a unique position. The first thing is over the past couple of years in the soft economy, a lot of companies, retailers in particular, have delayed upgrading and enhancing some of their technologies. So there is certainly a pent-up demand for retrofitting existing systems and expanding the capability of existing systems that's been somewhat neglected in the most difficult economic times. The second benefit is, as you described, the strong growth in multi-channel and the clear visibility that CEOs, senior level execs in these retailers are putting on, strengthening their position in multichannel, the buy online, pick up in store varieties. The strong revenue growth we've seen in that multi-channel space has driven a lot of net new activity. And one of the things that we're mostly excited about, we think we're uniquely positioned to serve that need. While there are order management systems out there besides Manhattan and there are warehouse management systems besides Manhattan and there are transportation systems and replenishment systems and so forth, we're the only one that offers all of those solutions on a common platform. And we think that puts us in a very advantageous position to meet that existing and growing need for an integrated multichannel approach. So we feel very good about the technology refresh that's becoming apparent in the retail space. And we feel very good about the push to multi-channel and we feel very good about Manhattan's unique ability to meet a lot of those needs. Terrell Tillman - Raymond James & Associates, Inc.: Okay. And I guess, Dennis, just a quick question. Can you remind us on the total deferred revenue as we exit 2Q? Is there any other material kind of transactions or milestones as it relate to license revenue or service revenue to think about on a go-forward basis or was this, the material portion and there's really not anymore things that are notable on the outlook?

Yes, Terri, this was the material portion and there's nothing else that's really notable.

Your next question comes from the line of Yun Kim from Gleacher. Yun Kim - Gleacher & Company, Inc.: Pete, can you just talk about whether there were any special sales initiatives to target new customers that showed a strong performance? It looks like it's been going on for a while. And just obviously, some of these customers were kind of pushing out deals. But what was the urgency behind why all of a sudden 3 new customers committed to your platform upfront in such a big way? And on that topic, how does your sales pipeline for large deals look between new and existing ones, existing customers? And do you expect the strength from new customers that was signed in the quarter to be more than a one-quarter event? And do you expect the mix to trend back towards existing customers?

We had no specific new sales initiative in the quarter to try to monetize some of the pipeline. I think our sales teams have been working very hard for an extended period of time, and we're pleased to see that rewarded. As I mentioned, our sales win rate at 75% is very strong. So the sales team is doing a great job. We think the reason that a number of these deals closed in the quarter relates to the comments I made to Terri's question that a number of companies had been postponing for as long they could investments in supply chain infrastructure, supply chain technology. And it's certainly our sense -- this could change but it's certainly our sense at the moment that our target markets are getting more confident in the outlook for their business. So that doesn't mean that their businesses are going to be booming. But it means that, I believe, they're less fearful of a major setback in their businesses. And for that reason, they need to get on with building their businesses for the next 5 and 10 years. And I think that's the largest impetus behind the deals that closed in the quarter. But I also think that's feeding our enthusiasm for our outlook for the second half of this year until 2012. If you look at our pipelines in total, in particular, the large deal pipeline, we're seeing a number of interesting things. One thing that I'm excited about though is some of the large deals are from new customers. But new customers will be replacing, if we win those deals, some of our existing competitors. So we think that's pretty exciting. We think the investments we've made in our platform, in our platform-based WMS in particular, are going to give us an upper hand to replace some of the existing competitors solutions in that space, so that's exciting. But also we see a very healthy pipeline for our other solutions. And also referring back to Terri's question earlier, our proposition of offering customers a combination of how to manage inventory, how to manage transportation costs, how to manage labor all while exceeding customer expectations is a pretty unique value proposition. And we think that combination of our platform-based solutions and the breadth and depth of the functionality in those solutions is doing a lot to motivate the pipeline to get started and take advantage of their market opportunities. So we're quite enthusiastic about our pipeline in total, new and existing clients and the ability to sell a broad suite of solutions into that more motivated market space. Yun Kim - Gleacher & Company, Inc.: So as you look into your pipeline for large deals, do you expect continued strength coming from the new customers or do you kind of see the trend going back towards the more driven by existing customers?

Yun, I think we're probably, once things settled out, we'll probably back to where we had been where it's 50-50, about half for new customers and half for existing. This quarter, it was 55 new and 45 existing. We think something in that ballpark is likely and frankly, I think very healthy. We're quite thrilled by the prospect of selling into the installed base. Obviously that's a very helpful way to go, but adding a lot of new customers is kind of fun, too. So we look forward to driving that balance. Yun Kim - Gleacher & Company, Inc.: Dennis, why was CapEx spending lower in the quarter and where do you see that spending trending going forward?

Yes, we've gained some pretty good efficiencies with investment and server consolidation in our infrastructure. And generally, the CapEx is around mainly infrastructure and tool support for new staff and on boarding. So we'll see a little bit higher CapEx in the second half of the year, Yun.

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

Just a couple of questions. Dennis, starting off with you, with respect to the large deals in the quarter, were any of those deals blockbuster deals, the deals over $2 million or were they just kind of classic Manhattan million-dollar deals that were a little bit over $1 million?

Mark, we don't disclose that. The actual level basically our standard disclosure is million-plus-dollar deals. We had a nice mix, I would say across the 4 deals. It wasn't any one deal that stood out amongst the others. We liked all the brands and we liked the size.

Okay, that's fair. Thanks. And then Dennis, in your prepared remarks, I believe you noted -- or gave some guidelines with respect to Q3 services revenue. I was wondering if you could just review those guidelines again?

Yes. We expect the total services revenue on a sequential basis to be slightly below Q2's performance because of the deferred -- the $3 million deferred impact that we recognized in Q2. And we said about 1% to 3% was our estimate there, Mark.

Okay. And then, Pete, in your prepared remarks, I believe you noted or made a comment about your distributed order management product and the deal you had in the quarter with respect to that. I haven't heard about that product in the last quarter or two. I was wondering if you could just give us maybe some particulars on that particular deal? And was that deal part of some of the larger transactions in the quarter?

Yes. Sure, Mark. I'd be happy to. Actually, we're quite thrilled with the success we're having with our Order Lifecycle Management product that's also referred to often by us as our DOM product or our Distributed Order Management product. I think it's clearly one of the key differentiators in the market for any distribution management solution. So we're going up against any other WMS competitor. It's often quite influential in winning that deal and winning it at attractive values. So we've had very good success and it was sold several times during the quarter in some of our deals. The one I'd pointed out in particular because it is the first time we had sold solution to a retailer in the United Kingdom. We had success selling it before several times in Europe. But it was our first Order Lifecycle Management deal in the United Kingdom, and we are excited about that deal. And United Kingdom has probably been the softest market in which we have a decent presence. And being able to work with one of our existing retailers to add additional capability to help them with their multichannel initiatives, we think is hopefully a sign of good things to come over the next couple of quarters and in 2012 out of the U.K. marketplace. But we are quite excited about the success we're having with Order Lifecycle Management.

Okay, great. And then finally back to you, Dennis. Can you just give us the currency impact on revenue in the quarter?

Yes, it was $1.7 million positive impacts, so about 2% and then less -- slightly less than a penny on the net income line, earnings per share line.

There are no further questions at this time. I'll turn the call back over to the presenters.

Thank you, operator. And thanks, everyone, for attending the call. We appreciate your time and look forward to speaking with you again in about 90 days. Thanks. Have a good night.

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