Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manhattan Associates First Quarter 2012 Conference Call. [Operator Instructions] Mr. Dennis Story, you may begin your conference call.

Thank you, Mike, and good afternoon, everyone. Welcome to Manhattan Associates 2012 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're cautioned that these forward-looking statements involve risks and uncertainties, are not guarantees of future performance and that actual results may differ materially from any projections contained 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 2011 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 to 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 disclosures 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 of our financial results. I'll return to cover operating activities for the quarter and then we'll be happy to answer your questions. I'm very pleased with our first quarter results. All of our financial and non-financial metrics were strong for the quarter. License revenue doubled off a weak Q1 of 2011. Total revenue was a new record for us, both for the first quarter and for any quarter in our history and was up 28% over last year. Adjusted EPS for the first quarter was $0.60, up 46% versus the prior year. We closed 5 $1 million plus license deals in the quarter, 3 with new customers and 2 with existing customers. One of the large deals was in Europe and 4 were in the United States. The Europe deal and 2 of the U.S. deals were led by our Warehouse Management solution. It was nice to see this quarter that the other 2 large U.S. deals were led by our transportation solution. In one of the 2 transportation deals, we beat Oracle head-to-head for a new customer. And in the other, we'll be replacing JDA's Manugistics product at an existing Manhattan customer. On a deal count basis, our overall competitive win rate in the quarter continued to be very strong at 3 out of 4 against our major competitors. Importantly, at the dollar value of the deals won and loss is estimated, the proportion of total deal value we won as percent of the total value of all deals is considerably higher than the 3 and 4 deals won metric as our losses tend to be on the small deals. Our Services businesses are strong, customer satisfaction is good, implementations of our solutions continue to go well and we're excited about our next release of our software solutions. Overall, we're performing well. I'll provide more color on this following Dennis' review of our financial results. Dennis?

Thanks, Pete. I'm going to cover our Q1 2012 non-GAAP results and GAAP EPS performance, and then I'll review our updated 2012 full year guidance. As Pete noted, a solid start to 2012, posting $91.5 million in total revenue, the highest quarterly result in our company's history, besting our previous record of $90.5 million in Q2 2008. Total revenue increased 28% over Q1 2011, as license revenue doubled against the weak comp, and Services posted 25% revenue growth. On a regional basis, Americas grew total revenue, 22%; EMEA, 49%; and APAC, 84%, over Q1 last year. Adjusted earnings per share for the quarter was $0.60, increasing 46% over prior year fueled by revenue growth. On an apples-to-apples basis, our Q1 2012 EPS grew 69%. We arrived at 69% growth by reducing the Q1 2012 result by $0.06 and reducing the Q1 2011 result by $0.09. Our Q1 2012 EPS result includes a $2 million, or $0.06 of EPS benefit, from recognition of previously deferred services revenue from a large services engagement, as we successfully completed our contract delivery requirements in Q1. As a reminder, our Q1 2011 adjusted EPS result benefited from a nonrecurring $0.09 India income tax benefit. License revenue for the quarter totaled $15.6 million, doubling over the $7.8 million we recognized in Q1 2011. From a regional perspective, Americas posted license revenue of $11 million; EMEA, $4.1 million; and APAC, $539,000. Our license performance continues to depend heavily on the number and relative value of large deals we close in a given quarter. And as Pete mentioned, we had a solid Q1 with 5 $1-plus million deals closed. While large-sized deal activity has been solid for the past 4 quarters, we remain cautious as a tepid global economic recovery continues to shape buying decisions and estimating sales…

Thanks, Dennis. First, a bit of color on the deals we closed in Q1. As I mentioned in my opening comments, we closed 5 large deals in the quarter, 3 with new customers. Overall, 50% of our Q1 license revenue was from new customers and 50% from the install base. We're quite pleased to be able to capture half of our license revenue from new customers. And we're also thrilled to sell additional solutions to existing customers. We're encouraged by our ability to win new customers which generate new opportunities for cross-selling additional solutions to these customers in the future. Overall, about 55% of license revenue in the quarter were tied to Warehouse Management solutions and 45% to our other solutions. Together, retail, consumer goods and logistics service provider verticals where once again strong contributors to our license fees and made up more than half of license revenue. We had a successful quarter adding new clients and expanding our relationship with existing clients. Software license wins with new customers that have permitted us to share the names include Anderson-Dubose, Central Retail, EARP Meat Company, Forever Direct, Gateway Distribution, Itella, Luolai Home Textile and Origin Enterprises. Expanding partnerships with existing customers included Alliant Techsytems, Asda, ATB, Buffalo Hospital Supply Co., Ceva Logistics, Coleman Cable, Damco Distribution Services, J. Crew, Jumei, Leroy Merlin, Laura Ashley, Lesaint Logistics, Masscash, Nature's Best, Niagara Bottling, Nike, Oatey, Orchard Supply Hardware, Performance Team Freight, PetSmart, Teavana, Carter's and Winn-Dixie, pretty good list of brands secured in the first quarter. We're encouraged that our global software sales pipeline remains strong, and our selling teams around the world are quite busy. As Dennis mentioned, our Professional Service businesses around the world performed very well in Q1. While the global economy remains difficult to forecast and could impact the…

[Operator Instructions] Your first question comes from the line of Terry Tillman from Raymond James. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: First 2 questions are more finance questions for you, Dennis. In terms of the revenue guidance for the full year, you did rate that at both the lower end and the high end. What are the swing factors there? I mean, is it all attributable to Services? Is there anything implicit in there on the license side or hardware? How do I think about the rationale for the upping of the revenue guidance?

A little stronger Services. And yes, we got off to a good start on the license in Q1, so with that flow-through. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay. And Dennis, in terms of the service margin guidance for the year, can you just remind me? I just don't remember what it was for the year previously and did you do anything there? Is that 30 basis points? You said 50 to 80 for the full operating margin. Is the delta because of the service margin for the year being a little bit higher than expected? Or is that not the case?

That's not the case. We kept it the same for the full year as our previous guidance, Terry. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: So the overall operating margin moving a little bit higher than the range now, is that just a little bit of a mix with license revenue or revenue mix?

Yes, a little mix on the license revenue, but managing operating expenses as well. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay, okay. And then, Pete, the 5 deals over $1 million. In my years of covering the story, I don't actually recall 5 deals over $1 million in the seasonally slow first quarter. I ought to go back to look maybe in '99 or 2000 to make sure I'm not missing a year, but what's up with that? Is there pent-up demand that maybe was because of those couple of years where there's really a -- really hard hit? How could you explain that because that's actually, I think, equivalent to the fourth quarter?

Yes, Terry, you're correct. We had 4 in 2010, large deals coming off the very slow 2009, as I'm sure you'll all recall. We did do 5 large deals in Q4 of last year and 5 in Q1 is a good outcome. We're quite pleased by that. I think it ties to a couple of things we mentioned on the call, the past, well, 4 or so quarters that we had a nice pipeline of large deals and large deal activity was good. That continues to be the case. So we're cautiously optimistic, as both Dennis and I shared on our comments, about the large deal activity. We also benefit by continuing improvement in our competitive position, so our win rate remains strong. And in particular, our win rate among the larger deals is a very helpful delivery on that large deal pipeline opportunity. There probably is a little bit of backlog still hanging around in the pipeline from the 2008, 2009 timeframe, as there continues to be some concern globally and in the United States with the macroeconomy. So I do think there's a little bit of hesitancy in there that may have helped us a bit the Q1. But overall, I think, Terry, it's a modestly improving economy, meaningfully improving competitive position from Manhattan Associates and some good dynamics happening in the marketplace and the market verticals that we serve, things like the continued emergence of multichannel retailing, globalization, some of the supply chain challenges that have been publicized over the past couple of quarters, and we're all lending support to the story that companies need to upgrade and improve and extend their supply chains. Terrell Frederick Tillman - Raymond James & Associates, Inc., Research Division: Okay. And maybe my last question's more of a theme -- thematic question. It seems like there's always a pendulum shift in terms of where we are, in terms of best of breed versus going with your ERP suite provider for Warehouse Management systems. I realize you have other products and some selling well, but I do want to focus on WMS. Where do think we are now in the pendulum in terms of your customers and prospects looking at, "Look, we need best of breed. We need the best functionality" versus,"Our ERP vendor can get it done for us?" Is it -- has it shifted more to best of breed? Or is it about where it was? Or where do you see us in that kind of pendulum?

Yes, I would suggest to you it's about where it's been, frankly, since I joined Manhattan Associates 8 years ago. Eight years ago, the story was that the best of breeds provide deeper, richer functionality, but that CTOs and CIOs over time would lean more towards the full extended ERP suite of solutions. And I think over the last 8 years, we have proven that depth and breadth of our solutions on a real competitive advantage, particularly the companies with complex distribution challenges. So I don't think the pendulum has swung much one way or other, I think, for our target markets. I don't think the ERPs are any more appealing today than they were 8 years ago, but I would put in a little selfish plug. I think some of the investments we've made over that time period, the $0.25 billion that we've invested in the last 6 years in R&D to build a broader suite of solutions on a common supply chain platform, I think neutralizes some of the CIO, CTO positions about the lower cost of technology ownership and puts us in an even better position relevant to the ERPs. But to summarize the answer to your question is I don't think the pendulum has swung much overall, and I think in many regards, that's been beneficial to Manhattan.

Your next question comes from the line of Yun Kim from ThinkEquity.

So obviously, just another question around the strength in your $1 million-plus business. Specifically, how many were driven by -- I think last call we talked about some of them were driven by legacy replacement deals, how many were driven by them? I think you mentioned that one of the transportation deal was a replacement deal?

Yes, yes, yes. It continues to be a good mix, Yun, so we did mention that one of that transportation deals was for a new customer, replacing a legacy system there. The other is a replacement of one of our competitors on the transportation side. In the WMS side, which we said were led 3 of the 5 large deals, WMS led, 2 transportation led, on the WMS deals, one of those nice win for us is a replacement for a meaningful competitor of ours in the WMS space. So we're quite thrilled about that and that should be quite exciting. And the other 2 cases, we're replacing legacy systems. So combination, 2 of the 5 replacing competitors, the other 3 replacing legacy.

Got it. Okay, great. And you continue to see the -- within your sales pipeline, just replacement deals is still a pretty meaningful portion of your business going forward?

I assume you mean by that, Yun, replacement of legacy systems?

Exactly. Legacy -- yes, legacy replacement deals, yes.

Yes, we see a substantial opportunity for us in 2012 and beyond. Most folks still estimate that about half of the market is supported by homegrown systems built in the '90s. And we believe we have developed a substantially better mousetrap and provide greater value at a lower cost of ownership and then trying to upgrade or enhance legacy systems so we see a great opportunity for ourselves there. And candidly, we're also quite enthusiastic about replacing our competitors in quite a few opportunities.

Okay, great. And then your consulting revenue in the quarter was, I believe, was the highest level, or at least over the last 5 years, even if you take out that $2 million benefit. Do you feel that you're at a certain scale with your consulting business that you can now maybe continue to expand that capacity with having much -- with only minimal impact on the margins? Or do you feel that whenever you need to ramp up, you will continue to impact margins a little bit?

So Yun, it's a delicate balance. Candidly, since this is an hourly business, add more revenue. You need to add more people, so we certainly recognize that. And we'd also tell you one of the things we're very focused on is maintaining and continuing to the degree possible improving customer satisfaction and want to make sure we've got the staff available to ensure customer satisfaction. So we will continue to do some hiring in advance of the specific needs. But I will also tell you, we are quite pleased with the Services business. It's a huge competitive advantage for us. It's something we -- I believe we do extraordinarily well. We think it complements the value of our software solutions, and we're quite excited about it. We believe we've got, if not the world's best, pretty close to the world's best gross margin on Services and we find that business attractive. As you noted, the strongest quarter in history on professional services revenue. And we think the pipelines for that business continue to be quite good, and we're looking forward to adding staff in Q2, 3 and 4 to be able to address the needs of our markets.

So regarding your relationship with system integrators and other partners around the consulting work, I mean, do you feel that you're at a scale of a certain level that maybe you could potentially start to more aggressively offload some of that work to the system integrators and not really affect the quality of your overall performance? I mean, is that something that you guys may be thinking about down the road?

We've looked at that many times, Yun, and in some spots, I think we do a nice job of working with all of the major third-party integrators, whether it's IBM or Accenture, Capgemini, Deloitte and others, to make sure that we complement their service offerings. In almost all cases, we will do the implementation and support services for our software and the other third-party integrators will help with the transformation of IT and other business processes. We think we've developed a very good balanced relationship with the other big third-party firms while staying very focused on implementing our software effectively. And we think we and they are pleased with that relationship. So in the near term, anyway, I don't see us outsourcing our software implementation service to partners, but do see us continuing to maintain very strong relationships with the world's best third-party integrators.

Your next question comes of the line of Mike Schappel from Benchmark.

Pete, starting with you, it looks like you ended the quarter with about 63 people in sales and sales management. I was wondering if you could help us out a little bit on where you expect that to end the year.

Yes. And Mark, it's a great question. In a perfect world, we'll probably add about a half dozen. I think I mentioned on the call after Q4 about 90 days ago, that we were looking to add about a half dozen people in sales during 2012. We didn't make a lot of progress in total in the first quarter, but we did have a person or 2 leave and replaced by, we think, strong people in our sales and sales management roles. So we continue to think that something along the lines of 6, maybe 8 folks added to sales would be appropriate as we finish off 2012 and head into 2013.

Okay. And on the Services front, with respect to hiring, I think you're going to try to hire about 100 people this quarter. It looks like you got relatively close, close to 70 by my account. Do you expect -- are you pretty much done for the year on the Services front? Or do you still see that going forward at a pretty aggressive rate?

No, we will likely go forward at a pretty aggressive rate, Mark. We've got a very attractive services queue and we think a great opportunity to build our business and drive customer satisfaction in helping clients transform their supply chains. We'll probably add something like 100 in Q2 and something like 100 in Q3 would be my guess. I know we probably won't get all the way there, but similar to our outlook for Q1, I think we'll make some real progress. We've been recruiting on campus throughout the first part of this year and have a very talented group of college grads. We expect to start with this over the summer to help build our team, and we expect to see some very strong performance from our Services business over the balance of 2012 and into '13 and '14.

Okay. And then in the repeat and retail sector, multichannel and showrooming have been very prominent themes, specifically in the business press over the last couple of months. I was wondering if you could address a little more detail about how your products are helping address some of these themes.

Terrific, we'll be happy to. We've been talking about the opportunities in multichannel for the past couple of years. Some of our products are specifically designed to help retailers and consumer goods companies that shift to retailers manage the multichannel opportunity most efficiently. So the real opportunity there is to make sure the right product's at the right place, at the right time, at the lowest cost across all your channels. The buzzword today is omni-channel, not multichannel, the basically presenting one face to the customer, whether they're in brick-and-mortar, buying opportunities, online, looking at a catalog and so forth. And our solution helps them most efficiently to ensure that inventory gets to the appropriate place at the most effective time. We've talked extensively about our Order Lifecycle Management solution. That is the glue that ties together supply chain planning, inventory, transportation, warehouse management, labor management and believe that continuing focus of retailers on optimizing their omni-channel offerings is a great opportunity for Manhattan to help those companies drive greater efficiency. The showrooming issue is one that is also quite attractive for, I believe, our portfolio of solutions. Showrooming is basically the concept that consumers leveraging mobile technologies, smartphones will walk into brick-and-mortar stores, scan a bar code, determine that somebody else offers a better price on the product, walk out of the store and then go online to buy that product. And I think everyone on the call probably has heard the example of Best Buy being labeled as Amazon's showroom, which I'm sure Best Buy is not very pleased with that. But the opportunity there is for retailers to come up with a better value proposition and then not just compete it with commodity product at commodity prices, but come up with more specialty-exclusive offers, exclusive products to provide one of the key capabilities that our software offers, the idea and the opportunity to buy online and pick up in store. It's one of the key features that our Order Lifecycle Management solution offers and as, obviously, a key differentiator from the online-only opportunities like Amazon. So there's been an awful lot of talk about what retailers can do to neutralize or turn the showrooming effects on their businesses and stop the penetration of online-only retailers, and we believe our solutions have a nice opportunity to fit into that conversation. So we look at both multichannel or omni-channel, and showrooming is a big opportunity for us to continue to work with our partners to improve their performance.

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

Very good. Well, thank you all for joining us this afternoon. We look forward to speaking with you again in 3 months. Thanks, and have a good evening.