Manhattan Associates Reports First Quarter 2006 Results

Company Maintains Full Year Guidance

ATLANTA – April 25, 2006 – Leading supply chain solutions provider, Manhattan Associates, Inc. (NASDAQ: MANH), today reported first quarter diluted earnings per share of $0.08. On a non-GAAP basis, diluted earnings per share were $0.16, a decline of eight percent versus the first quarter of 2005 due to lower software revenue.

FIRST QUARTER FINANCIAL HIGHLIGHTS:

Summarized highlights of the 2006 first quarter results, as compared to the 2005 first quarter results, are:

• Consolidated revenue increased 12% to $62.8 million;
  • Software and hosting revenue was $11.1 million, a decrease of 20%
  • Services revenue posted a record $45.2 million, an increase of 21%
• GAAP operating income was $3.1 million, down $4.6 million on lower software and hosting revenues. On a non-GAAP basis, operating income was $6.5 million, down $1.8 million;
• GAAP diluted earnings per share was $0.08, a decrease of 50%. Adjusted earnings per share, on a non-GAAP basis, was $0.16, a decrease of 8%;
• Cash flow from operations increased 73% to $9.9 million;
• Cash and investments on hand at March 31, 2006, was $103.2 million.

"While disappointed in our software license revenue, our other financial metrics posted solid results for the first quarter and our overall business remains healthy," stated Pete Sinisgalli, Manhattan Associates' president and CEO. "We are committed to delivering the world’s leading supply chain solutions and remain optimistic about our financial opportunities in 2006."

Other significant achievements during the quarter include:

• Securing key new customers in the quarter including Alidi, Alternativa, Botanic, Build-A-Bear Workshop AMP! Affiliates, Inc., Con-Way Truckload Services, LLC, Kangxin Logistics Co., Ltd., Kontena, Northern Safety Co., Inc., Shanghai Paradise Electrical Appliances Co., Ltd., Shenzhen Jin Tian Logistics Technology Co., Ltd., Sturm Foods, Inc., Sumifru Corporation, The Tranzonic Company, Thermwell Products Co., Inc., US Foodservice, Ventura Foods, LLC and Vera Bradley Designs, Inc.;
• Expanding partnerships with many existing customers including Argos Limited, Blair Corporation, Deluxe Film Services, Exel Pty Ltd., Godiva Chocolatier, Inc., Goodman Global Holding, Inc., Halfords Ltd., Hudd Distribution Services, Inc., MOL Logistics, Ltd., Nissin Corporation, Perfect 10 Satellite Distribution, Inc., TNT Logistics and VF;
• Gartner's Warehouse Management Magic Quadrant report placed Manhattan Associates' Warehouse Management for Open Systems in the Leaders Quadrant, which included criteria such as completeness of vision and ability to execute¹. Additionally, Manhattan Associates was also positioned within their Supply Chain Planning Planning Magic Quadrant for Distribution-Intensive Industries²;
• Earning the highest scores in the Current Offering and Financials categories for The Forrester Wave™: Transportation Management Solutions, Q1 2006 and recognition as a leader in The Forrester Wave™: Warehouse Management Systems, Q1 2006.

ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT:

Manhattan Associates adopted Statement of Financial Accounting Standards No. 123(R) ("SFAS 123(R)"), Share-Based Payment, in the first quarter of 2006, using the modified prospective transition method, which does not require restatement of prior periods presented. The adoption of SFAS 123(R) reduced first quarter 2006 GAAP diluted earnings per share by $0.04. The Company estimates the accounting required by SFAS 123(R) will reduce full year 2006 GAAP diluted earnings per share by approximately $0.20 and will contribute to an overall effective tax rate of 42.2%. This estimate is dependent upon a number of variables such as the number of options awarded, cancelled or exercised and fluctuations in the Company's share price during the year.

2006 Guidance

Manhattan Associates provided the following diluted earnings per share guidance for the second quarter and full year 2006. The 2006 GAAP diluted earnings per share includes the impact of adopting SFAS 123(R). A full reconciliation of GAAP to non-GAAP diluted earnings per share is included in the supplemental attachments to this release.

Manhattan Associates currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. The statements regarding future financial performance are based on current expectations, which include a modestly improving general economic and information technology spending environment over the course of the current year. These statements are forward looking. Actual results may differ materially, especially in the current uncertain economic environment. These statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of this release.

Manhattan Associates will make its earnings release and published expectations available on its Web site (www.manh.com). Beginning June 15, 2006, Manhattan Associates will observe a "Quiet Period" during which Manhattan Associates and its representatives will not comment concerning previously published financial expectations. Prior to the start of the Quiet Period, the public can continue to rely on the expectations published in this 2006 Guidance section as still being Manhattan Associates' current expectation on matters covered, unless Manhattan Associates publishes a notice stating otherwise. The public should not rely on previously published expectations during the Quiet Period, and Manhattan Associates disclaims any obligation to update any previously published financial expectations during the Quiet Period. The Quiet Period will extend until the date when Manhattan Associates' next quarterly earnings release is published, currently scheduled for the fourth week of July 2006.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income, adjusted net income and adjusted net income per share in this press release as additional information regarding the Company's operating results. The measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP operating income, net income and non-GAAP per share measures used by other companies. The Company believes that this presentation of adjusted operating income, adjusted net income and adjusted net income per share provides useful information to investors regarding additional financial and business trends relating to the Company's financial condition and results of operations. This release should be read in conjunction with our Form 8-K earnings release filing for this quarter ended March 31, 2006.

The non-GAAP adjusted operating income, adjusted net income and adjusted net income per share exclude the impact of acquisition related costs and the amortization thereof, the recapture of previously recognized sales tax expense, and stock option expense under SFAS 123(R). First quarter 2006 results prepared in accordance with U.S. GAAP are reconciled with non-GAAP results excluding the impact of these adjustments. A full reconciliation of our GAAP financial measures to non-GAAP adjustments is included in the supplemental attachment to this release.

¹Gartner Research "Magic Quadrant for Warehouse Management Systems, 2006" by Jeff Woods and Tim Payne, March 29, 2006

²Gartner Research "Magic Quadrant for Supply Chain Planning in Distribution-Intensive Industries, 1H06" by Andrew White, C. Dwight Klappich and Tim Payne, March 31, 2006

About Manhattan Associates, Inc.

Manhattan Associates is a leading supply chain solutions provider. The company's supply chain planning, supply chain execution, business intelligence and business process platform capabilities enable its more than 1200 customers worldwide to enhance profitability, performance and competitive advantage. For more information, please visit www.manh.com.

This press release may contain "forward-looking statements" relating to Manhattan Associates, Inc. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays in product development, undetected software errors, competitive pressures, technical difficulties, market acceptance, availability of technical personnel, changes in customer requirements, risks of international operations and general economic conditions. Additional risk factors are set forth in Item 1A. of the Company's Annual Report on Form 10-K for the year ended December 31, 2005. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results.

1. We adopted SFAS 123(R) on January 1, 2006 using the modified prospective method. SFAS 123(R) requires us to expense stock options issued to employees. Previously we did not record compensation expense for employee stock options. The 2006 adjustments to cost of services, research and development, and sales and marketing represents stock option compensation expense recorded during the period. The 2006 adjustment to general and administrative expense includes $560 of stock option compensation expense recorded during the period. Total stock option expense during the quarter was $1.7 million pre-tax. Because stock option expense is determined in significant part by the trading price of our common stock and the volatility thereof, over which we have no direct control, the impact of such expense is not subject to effective management by us. Thus, we have excluded the impact of this expense from adjusted non-GAAP results.
2. Adjustments represent purchase amortization from prior acquisitions. Such amortization is commonly excluded from GAAP net income by companies in our industry and we therefore exclude these amortization costs to provide more relevant and meaningful comparisons of our operating results to that of our competitors.
3. Adjustment includes recoveries of $267 in 2006 and $327 in 2005 of previously expensed sales tax resulting primarily from the expiration of the sales tax audit statutes in certain states. Because we have recognized the full potential amount of the sales tax expense in prior periods, any recovery of that expense resulting from the expiration of the statutes or the collection of tax from our customers would overstate the current period net income derived from our core operations as the recovery is not a result of anything occurring within our control during the current period. Thus, we have excluded these recoveries from adjusted non-GAAP results.
4. In conjunction with the Evant acquisition, we paid $2.8 million into escrow for employee retention purposes. These funds are being distributed to employees upon completion of up to 12 months of service with us. The amount is being expensed over the required employee retention period. To date, $1.9 million of the $2.8 million has been expensed. This adjustment represents the current period expense associated with these retention bonuses. We have excluded these costs because they do not correlate to the expenses of our core operations.
5. Amount represents the impact of the above adjustments on the income tax provision. The GAAP effective tax rate for 2006 is higher than the adjusted non-GAAP rate due to stock compensation expense recorded on incentive stock options that is not deductible for tax purposes.

Contact Information: To learn more about Manhattan Associates' supply chain solutions, simply complete the information request form, and we will contact you. For North & South America, call +1 877.596.9208 or e-mail info_americas@manh.com. For global inquiries, call +44 (0)1344 318000 or e-mail info_global@manh.com.

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