Dennis B. Story - CFO, Treasurer & Executive Vice President Eddie Capel - President, Chief Executive Officer & Director.

Terry F. Tillman - Raymond James & Associates, Inc. Yun Kim - Brean Capital LLC Mark W. Schappel - The Benchmark Co. LLC.

Good afternoon. My name is Skinner, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manhattan Associates Fourth Quarter 2015 Earnings 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, February 2, 2016. I would now like to introduce Dennis Story, CFO of Manhattan Associates. You may begin your conference..

Thank you, Skinner, and good afternoon, everyone. Welcome to Manhattan Associates 2015 Fourth 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'll 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. Well, 2015 was a very successful year from Manhattan Associates. We posted record fourth quarter and full year results. And this marks our fourth consecutive year of record revenue, operating profit, earnings per share and operating cash flow. Our associates executed very well serving our customers in 2015.

Demand is solid from customers and prospects investing in omni-channel commerce enablement initiatives, including supply chain, retail store operations and point-of-sale.

We continue to invest significantly in innovation to be the leading retail commerce enablement technology company, while staying focused on our customers' success and leveraging our deep domain expertise to extend our market share and drive Manhattan's growth.

Q4 total revenue of $141.4 million increased 8%, and adjusted earnings per share of $0.39 increased 30% over Q4 2014. For full year 2015, total revenue was $556.4 million, increasing 13%. And adjusted earnings per share was $1.52, increasing 31% over 2014.

The combination of strong revenue growth and prudent expense discipline led to the most successful year in our company's history. Q4 license revenue was $20.4 million, up 4% over prior year. And we closed six $1 million-plus license deals in the quarter, five of which were with net new customers and one with an existing customer.

Five of those large deals were in the U.S. and one was in Japan. Our large deal activity continues to be driven by a healthy mix of platform-based warehouse management solutions, transportation management and omni-channel initiatives. And for the year, we closed 21 $1 million-plus deals.

Eight of the 21 deals were with existing customers and 13 of the large deals were with net new customers. In 15 of the 21 deals, we competed head-to-head against strong competition. And fundamentally we're winning through compelling product differentiation, organic product innovation, our domain expertise and focus and commitment on the customer.

We're winning across markets in retail, manufacturing and wholesale, across product categories and across geographies. We not only expanding our solution set with our Tier 1 and Tier 2 customer base, but continuing to compound great net new customer global brands.

Our sales team across the globe executed well, and our competitive win rates remain very strong. In the quarter and for all of 2015, in head-to-head sales cycles against our major competitors, we're winning about 75% of the time. For the quarter, 53% of our license revenue was from net new customers. That was influenced by our $1 million-plus deals.

And for the year, we finished at 41% of our total license revenue from new customers. So as we look forward, we're well positioned for 2016 and beyond. With our strong 2015 financial performance, we're optimistic, but remain cautious as the global economy is off to a volatile and certainly a bumpy start here in 2016.

But while cautious, our license pipeline is solid, services business demand is strong, customer satisfaction is solid and we continue to be the leading innovator in core supply chain, retail store operations and point-of-sale commerce solutions.

Our focus remains on being the leading pure-play technology innovator in the supply chain commerce market, leveraging our platform strategy and investments in research and development to deliver solutions to help our customers get commerce ready in the new digital world.

And I'll provide more color in my business update, following Dennis' review of our financial performance..

Thanks, Eddie. I will review our Q4 financial performance and finish with our 2016 guidance. As Eddie noted, we delivered Q4 total revenue of $141.4 million, increasing 8% over Q4 2014. Adjusting for currency headwinds, total revenue grew 10% on an organic basis. By region, Americas grew 8%, EMEA grew 18% and APAC declined 6% compared to Q4 last year.

Full year total revenue was $556.4 million, increasing 13% over 2014 and up 16% in constant currency. Full year by region, Americas grew 16%, EMEA was up 15% and APAC was tough sledding, down 25%.

Adjusted earnings per share for the quarter was a record $0.39, increasing 30% over Q4 2014, and our GAAP diluted earnings per share was a record $0.36, increasing 33%. Full year adjusted earnings per share was $1.52, growing 31%; and GAAP earnings per share was $1.40, growing 30% over 2014.

A detailed reconciliation of GAAP to non-GAAP adjustments is included in our earnings release today. The remainder of my P&L discussion represents our adjusted results. License revenue for the quarter was $20.4 million, up 4% over prior year, and full year license revenue was $78.6 million, increasing 10% over 2014.

Despite recent global macro volatility, we continue to experience solid activity in our target markets and the demand environment remains positive. Overall, our license performance continues to depend heavily on the number and relative value of large deals we close in any quarter.

And consistent with our initial 2015 license growth goal, allowing for FX headwinds and strong comps, our goal is to achieve 6% to 8% license growth in 2016. Q4 services revenue was $107 million, growing 10% over Q4 2014. For the year, services revenue totaled $428.1 million, an increase of 14% over 2014.

Total services revenue includes both consulting and maintenance. For consulting revenue, strong demand in Q4 continued as we posted revenue of $74.4 million on 14% growth and full year revenue of $304.6 million on 17% growth. For the year, we increased our global services head count by another 8%, or about 135 heads, driven by customer demand.

With the solid demand outlook entering 2016, we added about 25 new associates in Q4, and our Q1 2016 hiring plan is to add about 150 more new associates and we're off to a good start with 90 new hires in January.

Q4 2015 maintenance revenue of $32.6 million grew 3% compared to Q4 2014, and full-year maintenance revenue grew 6% to $123.5 million over 2014. Solid license revenue performance, cash collections, and retention rates of 90%-plus contributed to year-over-year growth. As a reminder, we recognize maintenance revenue – renewal revenue on a cash basis.

So timing of cash collections can cause inter-period revenue lumpiness from quarter-to-quarter. Consolidated services margins for the quarter was 57.1% compared to 59% in Q3 2015 and 53.7% in Q4 2014.

Consistent with prior years, Q4 margins were down sequentially from Q3 2015 due to the retail busy season, and the addition of 60 new billable professional services associates in Q3 and Q4. For Q1 2016, we expect services margins to be in the 56.4% to 56.6% range reflecting the Q4 2015 new hires, and the Q1 2016 hiring plan.

For full year 2016, we are estimating margins to be in the 57.3% to 57.7% range. We expect Q2 and Q3 services margins to increase as billability and utilization ramp on first half hires then drop-off again in Q4 due to the usual holiday seasonality.

Turning to operating income, we delivered record Q4 operating income of $43.1 million, growing 35% over Q4 2014 with operating margin of 30.5%. Full year operating income totaled $176.4 million, increasing 29% over 2014 with operating margin of 31.7% up 390 basis points.

Our operating leverage was driven by strong revenue growth and disciplined expense management. With the strong finish to 2015, we are currently estimating 2016 operating profit to grow about 13% with operating margin expansion of about 75 basis points over 2015 to 32.5%.

This expansion contemplates incremental strategic investments in R&D and marketing initiatives to drive further competitive differentiation, growth and market awareness. Any potential upside will be addressed on a quarter-to-quarter basis going forward. That covers the operating results.

Regarding income taxes, our adjusted effective income tax rate for 2015 was 36.5% as Congress retroactively approved the 2015 R&D tax credit in Q4 2015. Our 2015 tax rate increased over 2014's effective rate of 36% due primarily to a higher proportion of U.S. based taxable income in 2015.

For 2016 effective tax rate, our best estimate is 37%, subject to mix of U.S. to foreign taxable income and U.S. federal, state and foreign tax legislation changes. Turning to cash.

For the quarter, cash flow from operations totaled $36.1 million, bringing our full-year cash flow from operations to a record $120.2 million, representing a 28% increase over 2015's $94.2 million. Yes, cash is king. Our Q4 DSOs were 63 days versus 60 days in Q3 2015 and 61 days in Q4 2014. Capital expenditures for 2015 totaled $11.5 million.

For 2016, we estimate capital expenditures to be in the range of $11 million to $13 million, driven by continued investments in internal IT and facilities to support company growth.

Our balance sheet liquidity continues to be excellent closing the year with $129 million in cash and investments compared to $119 million in Q3 2015 and $124 million in Q4 2014. We continue to carry zero debt while self funding our investments in innovation, enterprise growth and share buybacks from operating cash flows.

Regarding capital structure, we reduced our common shares outstanding 2% in 2015, buying back 1.7 million shares totaling $102 million. With our Q4 repurchase activity, last week our board approved raising our repurchase authority limit to a total of $50 million.

For 2016, our weighted average diluted share estimate for the quarters and full year is 73.7 million shares. Consistent with prior years, our diluted share estimate and EPS guidance does not assume any common stock repurchases in 2016. This closes the chapter on 2015 financial results, Turning to 2016 guidance.

Overall, we expect the competitive landscape to be about the same, which is aggressive. Consistent with our last six years of opening annual guidance, we continue to be committed to driving shareholder return through steady revenue and consistent earnings growth with efficient management of our capital structure.

We are positive on our outlook and still believe there is solid opportunity to take market share and drive potential earnings leverage.

While we remain constructive on our near and long-term growth potential, for 2016 our growth thesis is similar to what we put forth at the start of 2015, which we believe is prudent while navigating through current global macro volatility.

For 2016 total revenue, our current annual guidance is to grow 9.5% to 10.5%, delivering $609 million to $615 million in total revenue with a consistent quarterly revenue growth profile, our growth factors and 2% negative currency headwind, given the recent global volatility.

From a revenue mix perspective, we believe 2016 hardware and billed travel will grow about 3% over 2015 and will represent about 8% of total revenue. Overall, we expect our full year total revenue split to be about 49% first half, 51% second half.

For license revenue, we are modeling a 49%/51% split for first half and second half with a seasonal pattern of Q1 and Q3 license revenue lower than Q2 and Q4. For services, as usual Q4 revenue will be down sequentially from Q3 due to the retail holiday busy season. That covers revenue.

For 2016 adjusted diluted earnings per share, our guidance range is $1.69 to $1.72, representing 11% to 13% growth over 2015 adjusted EPS of $1.52.

With (17:45) beginning of the year salary increases worldwide, head count additions to support services demand and a higher effective tax rate, we expect Q1 2016 EPS to be about flat with Q4, while posting 13% to 15% growth over Q1 2015. And somewhat similar to revenue, we expect EPS to have a first half, second half spread of about 48% to 52%.

For GAAP diluted earnings per share, we expect to deliver a $1.55 to $1.58, representing 11% to 13% growth as well over 2015 GAAP EPS of $1.40. The $0.14 full year EPS difference between GAAP and non-GAAP diluted adjusted EPS is primarily the impact of equity-based compensation, which we expect to spread evenly about $3.50 per quarter.

And that covers my financial update and guidance. I'll turn the call back to Eddie..

Ahold USA, Citizen Watch, Coach, Darice, David's Bridal, DOME, Essilor of America, Federal Mogul, Fiskars, Floor and Décor, Harris Teeter, Heineken, Hot Topic, House of Fraser, Keeco, Kiabi, Kuehne & Nagel, Kwik Trip, Lacoste, Lennox International, Maggy London, O'Reilly Automotive Stores, Petrovich, RedMart, Samson, Schurman Fine Papers, Southern Wine & Spirits of America, The Honest Company, Tractor Supply, TwinMed, Under Armour and Wineworks.

Our professional services business around the world is performing very well, posting record results with Q4 revenue up 14%, and for 2015 full year, surpassing $300 million in revenue, growing 17% over 2014.

Our global services team continue to receive high marks for customer satisfaction, as I mentioned, and are very busy with core supply chain and retail omni-channel enable initiatives, with 56 system go lives in Q4 and about 300 in total during 2015.

As demand and visibility continues to be quite strong, we expect to add about 275 more associates in 2016, focused on store execution solutions and multiproduct platform-based implementations, and they continue to be strong and we expect this trend to continue. We continue to be the leading innovator in supply chain technology.

For the year, we increased our R&D spend 10%, investing $54 million and closing the year with 675 dedicated R&D associates. At the core of our success is our strategy to be serial investors in forward thinking innovation.

We continue to invest at a rapid pace to expand our addressable market and deliver market leading, differentiated capabilities to our customers, with supply chain commerce platform-based suite of solutions, including our omni-channel and point-of-sale solutions.

Our 2016 plans call for increased R&D investment, beyond our core supply chain solutions, developing the industry's leading, multichannel retail store platform with POS and Clienteling capabilities focused on the customer. So 2015 closed another great year of progress across our product portfolio.

In 2015, we had more than 30 new product releases with positive customer demand for these releases as evidenced by our growth across license and services. And I would just like to spend just a few minutes talking through a snapshot of some of those successes.

So let's start with our core supply chain applications like, WMS, TMS and inventory optimization. 2015 was another fantastic year of deployments and new product features for warehouse management. Of particular note was the progress we made in our mobile applications for the distribution center, which we call DM Mobile.

Our second major release of this application continues our effort to consolidate, key supervisory data, along with proactive issue identification and resolution, all available on iPads, Android, and Windows tablets. Customer reception to these new mobile-based warehouse capabilities has been very positive.

2015 was also a solid year for our TMS business. We continued to offer, both on-premise and cloud-based TMS solutions. And in 2015, we saw approximately 75% of our new customers opting for our cloud-based TMS. With that said, we continue to observe larger, more complex shippers continuing to prefer an on-premise solution.

And our ability to deliver our same top tier TMS in either deployment format is certainly a market differentiator for Manhattan Associates.

We also believe that we're the only provider in the space able to deliver a Tier 1 product across both WMS and TMS and the market continues to consolidate the number of strategic enterprise application vendors with whom they wish to deal with and that's certainly working to our advantage.

We also continue to make great progress with our suite of demand forecasting and inventory optimization solutions. We mentioned in previous calls, our work to build and deploy the next generation of solution for forecasting and replenishment in the highly promotional brick-and-mortar environment.

Across the retail and wholesale markets we serve, our innovative solutions for handling the most complex multi-tiered and multichannel inventory environments are generating significant returns on inventory for our customers.

As promotion planning and management continue to be key points of emphasis for our retail customers and prospects, we believe our best-in-class application is a great choice to help them improve their results.

Turning to our omni-channel applications, 2015 continued our trend of closing large deals and implementing successful projects for Tier 1 and Tier 2 retail and branded manufacturers. As we've noted before, the digital revolution has inspired many brands to open stores and sell direct through digital channels.

All of these retailers and brands require technology to create a seamless cross channel experience. That order management is where that problem gets solved in earnest.

We continue to add large complex organizations, through our order management and store fulfillment customer base and I'm happy to say those projects are going exceptionally well in generating enormous value.

We anticipate order management for the digital channel will continue to become more complex with higher volumes and customers will continue to turn to us as the best-in-class order management system provider to provide a foundation for their digital commerce business.

And finally, we continue to make great progress with our point-of-sale and clienteling product lines. In this year, as digital selling and omni-channel commerce continue to transform the way our customers or consumers shop and raise the bar for retailers and how they engage with their customers.

We head into 2016 with a nice pipeline activity and anticipate adding a few new customers this year, building momentum for 2017 and beyond as the market continues its evolution away from traditional point-of-sale.

And we're aggressively investing in new innovation to capitalize on this transition in the coming years with the objective of being the industry's only Tier 1 provider of an omni-channel operations platform consisting of enterprise inventory availability, order management, customer service, point-of-sale, clienteling, and in-store personalization.

We believe that providing great service to end customers both in-store and in the call center is a vital component of delivering a personalized consumer experience and making the store a more productive and multichannel retail world.

We're committed to providing the software capability that customer's need to deliver a great experience for their customers. Turning to our global associates for a moment, we ended Q4 with about 2,950 employees around the globe.

That's up 6% over the prior year and more than 95% of our head count growth is in our professional services group on strong demand to support top-line growth and customer satisfaction. We finished the quarter with 64 people in sales and sales management, with 58 quota-carrying sales reps, the same as last quarter.

And we intend to continue to be opportunistic and look to add about half a dozen additional talented sales professionals to our company. So let me close my prepared remarks with a brief summary. We're certainly very pleased with our 2015 performance and we remain focused on our customers and getting them commerce ready.

And turning our sights to 2016, while the global macro conditions certainly give us reason to be cautious, we're very optimistic about our future and remain focused on our customers and getting them commerce ready.

Multichannel retail customers and supply chain complexity in our target markets continue to increase, all driven by digitalization and e-commerce, which are fueling multiyear investment cycles for customers and Manhattan Associates alike. So our relative competitive position continues to be strong and it continues to improve.

And while we continue to invest in innovation to extend our addressable market, market leadership and differentiation, with the world's most talented supply chain employees, the best software solutions, and a good market momentum, we believe that we're well positioned for the balance of 2016 and well beyond.

So with that, Skinner, we will be happy to take any questions..

Absolutely. And the first participant in our queue is Terry Tillman from Raymond James..

Hi, guys. Good afternoon..

Hi, Terry..

Can you hear me okay?.

We can, Terry, yeah..

Okay, great. So I just have a few questions. The first question just relates to, I took note of the services – professional services hiring quarter-to-date, it sounds like you've gotten off to a pretty strong start with about 90 hires..

Yes..

And, I guess, that's almost equivalent, if not more than maybe the second half of the year, if my math was right. And what I'm curious is, you talked about kind of cautious optimism and just the economic situation volatile, but that is a lot of hiring.

And so, I guess, with those kind of backdrop promise about the macro, how do we read into the professional services hiring? Are you also seeing strong demand, or is it just kind of you're working sort of previous backlog, or are you still building backlog in your pro services side despite the macro headwind?.

Yeah. Well, we certainly still – or we are seeing strong demand, Terry. So, as you know, $78 million in license revenue in 2015, so certainly very strong demand there. We were very pleased with our Q4 license revenue number.

We were very pleased with the number of big deals we closed in Q4, and the visibility for – particularly for our services practice is very good and looks strong. As we noted in the call, we have got off to a good start. We plan to hire beyond the 90 that we've managed to bring on board in January.

So the business feels good, feels strong, and visibility is good. But we think it would not be prudent to go through the call without cautioning around global macro and all the things that we are all seeing here in the end of 2015, the beginning of 2016..

Yeah. Yeah, that's fair. I mean, I got a lot of calls, though, towards the end of the year and the beginning of this year with some people just sometimes regurgitating headlines related to bricks-and-mortar retail and the travails they've been actually having for a longtime and you closed six $1 million deals.

Did you see any kind of change or a tenor change in terms of just your willingness to sign on the dotted line at the end of the quarter or did you really see it playing out quite – again, some of these headlines we saw on bricks-and-mortar retail?.

Yeah. So we continue to see demand being pretty strong, an unwavering focus on improving the customer experience for our customers and serving the demand. Now, I think certainly we saw bricks-and-mortar and foot traffic be down during the peak season. But conversely, we saw the digitization and online sales being up.

So, with our focus on omni-channel unified commerce solutions, however you'd like to phrase it, we still see demand being pretty strong..

Yeah. And I guess, Dennis, I mean, really, it's been a little over five years, I mean, the EPS growth has been strong typically over 30%. A question I do continue to – or I get more increasingly from investors is the idea, look, it's a great margin expansion story that you've put together. But, I mean, at some point, there's got to be a ceiling.

What I wanted to ask you is – so that was editorial, no one asked you the question.

It feels like maybe pro services has actually not been a point of strength because you have been hiring a lot because that's an area where we still see some leverage and an opportunity for margin – sustained margin expansion just getting some greater efficiency out of your pro (36:09) services over time, I'm over-thinking that?.

No, I don't think you're over-thinking that. Terry, every line item on the P&L is operating leverage from our point of view and how we manage the business and the leadership team manages the business.

So, yeah, there is additional leverage in the services, there is additional leverage on the license line, there is additional leverage across our operating expense base..

Okay. And just my final question is just related to – Eddie or Dennis. Just tracking it for so long, I mean, the percentage of business from new customers, it just seems like something is kind of different there. And, I guess, what I am curious – well, I could be wrong, but that's just my observation.

And I'm wondering, if indeed you're seeing in terms of ASPs with the new customer, are you seeing growth in ASPs? And if so, is it because of the omni-channel, the OMS stuff or the in-store stuff? I said stuff enough there, but could you give us some sense on, is there something going on that you're getting more economics from a new customer, than say, three years to five years ago and if so, why? Thank you..

Yeah. I don't think there is any deep rooted shift there, particularly, Terry. Now, there's no question that we have invested significantly in innovation over the last number of years, almost $0.5 billion over the last decade or so.

So as we've invested in innovation and are able to deliver more value to our customers, commensurately we are able to get more value for our solutions. But I don't think there is anything particularly intrinsic there with ASPs growing with new customers versus existing or any of those things.

It's just a factor of our investment in innovation I believe..

Yeah. And with that, I'll add, it's expanding our addressable market, which you know, Terry, which is super fantastic. Our competitive win rate continues to be strong at 75%-plus and we're compounding these great global brands that have a nice tail revenue from a services perspective and maintenance..

All right. Thank you..

Good. Thank you, Terry..

And our next question comes from the line of Yun Kim from Brean Capital..

Thank you. Again, congrats on another solid consistent quarter, Eddie and Dennis..

Thank you, Yun..

Thanks, Yun..

Following up on Terry's question, again, you guys saw a greater mix of large deals coming from new customers this past quarter and also in Q3 I believe.

Is this a trend that you're expecting to continue into 2016? And also, what is a typical profile of these new customers? Are they different from your traditional large Tier 1 brick-and-mortar or are they just the same?.

Yeah. Well, we saw a little bit of an uptick in Q4, Yun, in terms of the percentage of license revenue coming from net new customers over existing. But as you know, that bounces around a little bit quarter-over-quarter and ranges between where we saw it in Q4 to 70%/30%.

For the year, I believe we were at about 40% from new customers and 60% from existing, which is about where it usually is or has been for the last five years or six years.

In terms of kind of the profile of the net new customers that are coming on board, as you saw, four of them were in retail, that traditional retail space, a place that we like to play and certainly, given our focus on Tier 1, you can certainly assume that those guys were generally in that Tier 1 category as we define it..

Okay, great. Thanks. And then if you can just give us a little bit more, just an update on the latest plan regarding the point-of-sales business.

How's the product development going, and when can we expect to see increased marketing spend in front of the launch?.

Yeah, yeah. So, we're very pleased with how things are moving forward. We've actually had three product releases in the last, I think, it's 16 months, something like that, one fairly recently. We launched kind of the latest release at NRF, the National Retail Federation, just a few weeks ago in New York to great reception.

So, we're very pleased with our product plans. As I think you know, we have our first couple of early adaptor customers for point-of-sale. Pipeline activity is strong, as I've noted. We'll be doing or releasing a next version of our product at our Momentum, Customer User Conference in May. So, we are very excited about where we are with the product.

We're very excited about the initial customers that we've signed and very pleased with the Momentum. We do think we're going to have to spend a little more – or a few more marketing dollars in 2016 just to make sure that the entire world is aware of these great and innovative solutions that we're developing.

But, again, as we've talked about before, it's really 2017, 2018 and 2019 where we're expecting these capabilities to become sort of mainstream revenue producers for Manhattan Associates..

Okay. And then, just a last question from me.

Just can you revisit the competitive environment out there? I am assuming you are seeing the – your typical usual suspects are IBM and WebPro what not, but are you also beginning to see others coming into the market especially around the omni-channel angle at the lower end of the market?.

Not really. For the moment, our traditional competitors have remained the same. As you know, we focus largely on Tier 1 and Tier 2, so those companies that are terrific companies and do very well focusing on the SMB space. We don't run into very often, usually, frankly, if we are competing with them, one of us is probably in the wrong deal..

Okay, great. Thank you so much..

Thank you, Yun..

Our next person in queue is Mark Schappel from Benchmark..

Hi, good evening, and congrats on the quarter, nice job, nice job on the year.

Eddie, starting with you, over the past several quarters or so, you could probably make the case that your business has been – at least I could (43:36) make the case your business has been driven by three main factors, one would be competitive displacements, secondly may be replacing aging kind of legacy systems that are out there that are still leftover.

And then three, would be just the new omni-channel initiatives.

Is it fair to assume that these three basic drivers were in place this quarter?.

Spot on, a great evaluation. Over the last couple of years, frankly, Mark, and no different this quarter, those were the key drivers most certainly..

Okay, great. And then along those lines you've been having some pretty good success off late – in the last couple of quarters, specifically around your advanced forecasting and replenishment modules..

Yeah..

And I think you have some seasonality functionality that's helping out.

What's driving that interest? Is it just the added capabilities or is it – or customer is just finally waking up to how to use these products and these capabilities?.

Yeah. So I think, certainly, we put a bit more focus on those solutions in the marketplace to be frank with you, Mark, number one. Number two, I think we've seen the competitive landscape improve a little bit, but also the differentiation that we've built into our solution.

So, more than ever today, given the unified commerce approach or the omni-channel approach, promotions are becoming more and more of a focus. So, the capabilities that we built into our solutions to be able to manage, forecast and manage inventory in a fairly, highly promotional world, has created certainly some nice differentiation for us..

Okay, great. And then, I'll end with this one here and that has do with the quota-carriers, the head count although was flat from the prior quarter..

Yeah..

It is still down from the beginning of the year.

I was just wondering if this is more of a reflection of just the tight hiring environment or is it just a more reflection of your tight demands for sales reps?.

Yeah. Yeah, we're pretty selective Mark, frankly. So the sales team we've got is – it's first class for sure, highly tenured with Manhattan Associates. So, our top 10 or so sales guys have been with us for more than 10 years, very experienced, very domain rich, great reputation in the marketplace and with our existing customers.

And we are just quite selective, frankly, about the sales reps that we bring onboard..

Okay. Great. Thank you, that's all for me..

All right. Thanks, Mark. I appreciate it..

And at this time, we have no more questions in the queue..

Okay. Skinner, thank you very much for hosting the call and for everybody joining us this afternoon. We were truly very pleased with our performance in 2015, excited as we enter 2016 and look forward to reporting our first quarter results about 90 days from now. Thanks, everybody. Bye-bye..

This does conclude today's conference. You may now disconnect. Thank you for your participation..