Good afternoon. My name is Mike, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates First Quarter 2015 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. As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, April 21, 2015. I would now like to introduce Dennis Story of Manhattan Associates. Mr. Story, you may begin your conference.

Thank you, Mike, and good afternoon, everyone. Welcome to Manhattan Associates first quarter earnings call. I will review our cautionary language and then turn the call over to Eddie Capel, 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 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 2014 and the risk factor discussion in that report. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. All non-GAAP measures have been reconciled to the related GAAP measures in accordance with SEC rules. You will find reconciliation schedules in our Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now, I’ll turn the call over to Eddie.

Well good afternoon, everyone. We're off to a solid start in 2015 posting record results as customers and prospects continue to invest in core supply chain and omni-channel commerce initiatives. Our competitive position continues to improve and customer satisfaction continues to increase across the globe. We delivered record total revenue in Q1 of $133.5 million, increasing 18% and record adjusted earnings per share of $0.34 increasing 31% over Q1 2014. Software license revenue for the quarter was $19.3 million up 13% and we closed seven one million plus license deals in the quarter, three with existing customers and four with net new customers. One of the large deals was in Europe, five in the U.S. and one in Latin America. Three of the deals were led by our platform based warehouse management system and four of them led by omni-channel. In five of the seven large deals, we were successful head to head against very strong competition. Our sales teams are executing well and our competitive win rates in head to head sales cycles against our major competitors remained strong at our 75% for the quarter. Overall for the quarter, 40% of our license revenue was from net new customers and adding large new global brands to our customer portfolio. Our success is driven by the focus we apply to delivering innovation in an ever changing commerce market, focusing on our customer success and leveraging our deep domain expertise. While we remain somewhat cautious regarding the global economy with a strong start to 2015, we're raising our revenue and earnings per share guidance for the year. Our pipeline is solid. Services business demand is strong. Customer satisfaction is good and we continue to be the leading innovator in the supply chain commerce market. I'll provide more color in my business update following Dennis' review of our financial results and updated guidance.

Thanks Eddie. I'll cover our Q1 2015 results and then review our updated 2015 full year guidance. Q1 total revenue grew 18% to $133.5 million, the highest quarterly revenue in our company's history. Adjusting for negative currency impact mainly in the Euro, Pound and Australian Dollar, total revenue grew 21%. For the quarter Americas grew total revenue 20%, EMEA 17% and APAC was down 19%. Adjusted earnings per share for the quarter was $0.34 up 31% over prior year. Excluding negative currency impact, adjusted EPS grew 35%. We expect significant currency headwinds for the balance of the year, which I'll cover in our raised guidance. Our Q1 2015 GAAP diluted earnings per share was a record $0.31 growing 29% over Q1 2014's $0.24. For your reference a detailed reconciliation of GAAP to non-GAAP adjustments is included in our earnings release today. License revenue for the quarter totaled $19.3 million. From a regional perspective Americas posted license revenue of $15.5 million, EMEA $3.5 million and APAC $300,000. Consistent with previous quarter's comments, our license performance depends heavily on the number and relative value of large deals we closed in any quarter. With a sluggish global macro and FX headwinds, we're targeting a license growth goal of about 8% for the remainder of 2015. Shifting to services, demand is quite solid. Q1 services revenue totaled $101.2 million increasing 16% over prior year. Our services revenue is comprised of two revenue streams, consulting and maintenance. Consulting revenue for the quarter totaled a record $72.7 million growing 22% over Q1 2014. With solid visibility into our global services demand, we continue to focus on hiring additional resources to meet our customer's needs. Maintenance revenue for the quarter totaled $28.5 million, increasing 4% over last year. License revenue growth, cash collections and retention rates of…

Thanks Dennis. Well as I mentioned at the start of the call, we're off to a great start in 2015, despite a pretty tepid global macro environment and the FX currency volatility, digital commerce and technology monetization programs continue to drive growth opportunities for Manhattan Associates. We continue to see solid progress in our core verticals led by retail being fuelled by the digital commerce revolution and the way in which retail has switched to engage and service their customers. As I discussed at the beginning of the call, we recognized seven large deals in the quarter, four in retail, one in grocery, one in food and beverage and one in consumer electronics. All deals were driven by strategic technology modernization programs with four of the deals driven by omni-channel initiatives. In Q1, our license team mix was weighted about 55%, 45% between our warehouse management system, and our other solutions. A meaningful portion of our WMS and non-WMS license and services revenue activity continues to be driven by existing and new customer omni-channel initiatives and legacy supply chain modernization. The retail, consumer goods and third party logistics verticals were our strongest license fee contributors making up more than half of our Q1 license revenue. Q1 software license win with new customers that have permitted us to share their names include Best Buy, Harris Teeter, Keurig Green Mountain, Kramp Groep, Midas Group, Murphy-Hoffman, Paul Smith, Readerlink Distribution Services, Stage Stores, Thomas Cook Airlines, and Uline. Q1 expanding relationships with existing customers included APL Logistics, Asda Stores, Cabela's, Carter's, Central Retail Corporation, Chico's, Coach, David's Bridal, Eileen Fisher, Express, Factory Motor Parts, Genco, Genesco, House of Fraser, Kane Warehousing, Laura Ashley, LeSaint Logistics, Monoprice, MWI Veterinary Supply, Newgistics, Nordstrom, RockTenn, Schurman Fine Papers, Southern Wine and Spirits, TwinMed, Ulta, Wilton Brands,…

[Operator Instructions] Your first question is from Terry Tillman with Raymond James.

Hey, good afternoon, guys. Can you all hear me okay? Sorry for my background noise.

Yeah, we can hear Terry.

Okay. Well, so, I've been following the stock for 15 years, I've never seen seven $1 million deals in a single quarter -- the first quarter, which is usually seasonally slow. What do you attribute the large number of seven-figure deals to in the quarter?

Yeah, I don’t think there is single factor Terry that we can attribute the deals too. Obviously great sales execution, we pride of the innovation that we put out into the marketplace over -- particularly over the last year or two. As we mentioned, four of the seven deals were driven by omni-channel initiatives now I would say, I think very soon we’re going to be talking about these just being retail initiatives rather than calling them out as omni-channel. But we're still seeing a good deal of legacy replacements out there in the marketplace as well. So on one hand, I’d love to tell you there is one specific reason for the $7 million, but on the other hand I think it’s a combination of things.

But for my next -- so, okay, I understand that. But, Eddie, from the standpoint of last year, you all signed 15 $1 million deals, and so there was already seven in the first quarter. Was there anything you can say -- and I know you don't want to get into too much details quarter-to-quarter and what slips and what doesn't slip, but was any of the activity in first-quarter transactions that may have otherwise happened in the fourth quarter?

It's always hard to tell Terry. We’re not entirely in the minds of our customers and what their thinking is around calendar year, movement and so forth. The one piece of commentary that I would make or is that we do know that most if not all retail fiscal end of year finish up, late February, so given that we had a number of deals in retail, sometimes we do see them move out of our Q4, but still remain in the Q4 of our retail customers. So for them it doesn’t feel like, slippage from times for us it does.

Okay. Okay. And on the order management side, it's always interesting to watch what's going on with the progress in that business. What about in the install base? Because you have a lot of WMS customers and other supply chain execution customers. What is it like? Is there any kind of low-hanging fruit you're seeing going into the install base, and getting them to understand omni-channel, if they don't already? And indeed, more easily sell this product as an add-on? Or is it not that simple?

I think, let's see. So there is no low-hanging fruit per se number one. Number two, the education process I think the market and the industry is pretty well educated at this point, but I do have to say that, as we've talked about before, these programs are strategic and certainly take some momentum to get the moving. So the sales cycles are not -- are not swift particularly by any stretch of the imagination and whenever we're involved in a strategic omni-channel initiative we're generally speaking up against pretty tough competition. So I couldn’t characterize any of them unfortunately as low-hanging opportunities.

Okay.

This is Dennis. I would also add that's how we started really gaining market traction in this businesses of selling entire install base, really built customer reference ability with some marquee installed accounts.

Got it. Thanks, Dennis. I guess my third question is on the POS and clienteling side, I wouldn't expected to hear much yet about that. Because, I mean, those are still newer areas for you all. So I guess, given that they were part of the transactions in the first quarter, is that further along than you expected? And what are you seeing in terms of how much sales activity we could see out of those newer areas for you all in 2015?

Yeah so we’re very pleased with the early activity. We’ve been working hard obviously to integrate the solutions and get them on to kind of our common technology stack. So we’re pleased with the progress that we’ve made. And we’re pleased with the acceptance and the validation that we’re seeing in the marketplace. I do think that we will see some more activity in '15 but generally speaking I think as we see the pipeline building in '15, I do think this is more of a '16 play frankly and onward Terry versus seeing a market impact in 2015.

Okay. And my last question is just -- Dennis, for you, in terms of -- I get asked the question a lot about what's left in the tank in terms of margin expansion. If we think out three to five years -- and I'm not trying to pin you down to an operating margin target -- but is there much expansion in gross margin? Or would you expect it to be more from OpEx items? Thanks again and nice job on the quarter.

Terry I expect to get it up and down the P&L. So yes, I think there is opportunity on the gross margin as well as OpEx and pricing leverage as well.

Thanks guys.

Very good. Thank you, Terry.

[Operator Instructions] The next question is from Mark Schappel with Benchmark.

Hi. Good evening, and nice job on the quarter, very nice job. And Dennis, starting with you, I was wondering if you just repeat the impact of currency in the quarter -- on both revenue and EPS?

Yes basically three percentage points on the top line, it’s about $3.5 million Mark, $2.9 million out of Europe $0.5 million out of APAC mainly Australia.

That’s positive?

It was negative, negative impact.

Thank you.

Okay and then about four percentage points on EPS negative.

So thanks. And then cash flow from operations was down kind of surprising in such a strong quarter. Was that just mostly a timing of receivables issue?

No it was just timing. We had very with a record 2014 year the annual bonus payouts came in Q1. So incrementally they’re a little higher year-over-year, but we’ll make that up. We’ll make that -- we had a very strong quarter in terms of cash collections etcetera.

Okay. That's fair. And then, Eddie, last quarter I believe you noted that one of your R&D priorities was cloud enablement of your existing solutions. I was wondering if you'd just expand a little bit on that.

Yeah, well so we continue to be driven by the market and add customers Mark and what they’re looking for but certainly the ability to be able to leverage the modern cloud technologies particularly as we implement multiple products for our customers. And being able to benefit from the elasticity, the cloud technology provides is a very important aspect to helping us drive -- helping us drive down hardware infrastructure cost and so forth for our customer. But of course in order to be able to do that, our application have to be kind of core cloud, cloud ready. So we’re I think making excellent progress in that regard. With regard to the economic side of kind of cloud and subscription based models and so forth we're not being driven there by our customers. As you know we focus mostly on Tier 1 and Tier 2 and most of those organizations want to own the software right. Subscription models don’t fit particularly well into Tier 1.

Okay, great. And then staying on the R&D theme, I also believe focusing on your retail store platforms or solutions was also going to be a priority this year and again, if you could just drill down a little bit on that for us.

Yeah, so we continue to make great progress. Four of the large deals that we closed in the quarter were omni-channel retail related. So we're very pleased with that progress continues to frankly require significant investment to keep up with the changes and the rapid omni-channel expansion plans that their customers and prospect have. I think we’re making terrific progress in integrating our mobile point of sale clienteling and tablet retailing applications into the retail platform and then finally this expansion into the retail store bringing our execution systems into the store continues to go well. I think we’ve talked about the start before we have live or in implementation about 15,000 retail stores now. So that count continues to grow pretty substantially and we continue to be excited and focused in those areas.

Great, thank you. That’s all for me.

Sure. Thank you, Mark.

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

Okay, well thank you Mike. We appreciate it and thank you everybody for joining us on our Q1 call here. Again we’re pleased with our start to 2015 and we look forward to talking to you in about 90 days from now and giving you an update on Q2 and first half 2015 results. Thank you.

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