GlobeNewswire Inc | Jul 23, 2020 04:05PM EDT

July 23, 2020

ATLANTA, July 23, 2020 (GLOBE NEWSWIRE) -- Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $135.6 million for the second quarter ended June30, 2020. GAAP diluted earnings per share for Q2 2020 was $0.30 compared to $0.32 in Q2 2019. Non-GAAP adjusted diluted earnings per share for Q2 2020 was $0.40 compared to $0.42 in Q2 2019.

Manhattan Associates reported solid second quarter financial results, said Manhattan Associates president and CEO Eddie Capel. Our growing cloud business continues to outperform, with continued strength in both revenue and bookings. As a result, we are raising our full-year revenue and earnings guidance. Furthermore, while early, we are seeing strong interest in our recently released Manhattan Active Warehouse Management solution, which should continue to provide momentum for our cloud business in the years to come.

There is no doubt that near-term impacts to global economic activity continue to manifest themselves due to the COVID-19 pandemic, Mr. Capel continued. Specifically, we have seen sales cycles lengthen as customers and prospects simultaneously contend with the pandemic while evaluating our solutions. Additionally, we have seen delays in services-related project work, leading to a year-over-year decline in services revenue.

However, we remain very confident in the long-term outlook for our business, driven by the continued need for innovative solutions within the supply chain and omnichannel commerce markets, Mr. Capel concluded. We will continue to position the company to capitalize on these evolving trends while driving long-term sustainable growth for all of our stakeholders globally.

SECOND QUARTER 2020 FINANCIAL SUMMARY:

-- Consolidated total revenue was $135.6 million in Q2 2020, compared to $154.3 million in Q2 2019.

o Cloud subscription revenue was $18.5 million in Q2 2020, compared to $9.0 million in Q2 2019.

o License revenue was $5.7 million in Q2 2020, compared to $11.7 million in Q2 2019.

o Service revenue was $71.8 million in Q2 2020, compared to $94.0 million in Q2 2019.

-- GAAP diluted earnings per share was $0.30 in Q2 2020, compared to $0.32 in Q2 2019. -- Adjusted diluted earnings per share, a non-GAAP measure, was $0.40 in Q2 2020, compared to $0.42 in Q2 2019. -- GAAP operating income was $26.7 million in Q2 2020, compared to $27.6 million in Q2 2019. -- Adjusted operating income, a non-GAAP measure, was $34.3 million in Q2 2020, compared to $36.2 million in Q2 2019. -- Cash flow from operations was $48.8 million for Q2 2020, compared to $37.2 million for Q2 2019. Days Sales Outstanding was 73 days at June30, 2020, compared to 61 days at December 31, 2019. -- Cash and investments totaled $123.6 million at June 30, 2020, compared to $75.3 million at March 31, 2020. -- In April 2020, the Company suspended its share repurchase program because of COVID-19-related considerations. Accordingly, during the three months ended June 30, 2020, the Company did not repurchase any shares of Manhattan Associates common stock under the share repurchase program. The Companys authorized repurchase limit remains at $50 million.

SIX MONTH 2020 FINANCIAL SUMMARY:

-- Consolidated revenue for the six months ended June30, 2020, was $289.5 million, compared to $302.7 million for the six months ended June30, 2019.

o Cloud subscription revenue was $35.8 million for the six months ended June30, 2020, compared to $16.9 million for the six months ended June30, 2019.

o License revenue was $15.4 million for the six months ended June30, 2020, compared to $24.1 million for the six months ended June30, 2019.

o Service revenue was $159.2 million for the six months ended June30, 2020, compared to $182.6 million for the six months ended June30, 2019.

-- GAAP diluted earnings per share for the six months ended June30, 2020, was $0.65, compared to $0.64 for the six months ended June30, 2019. -- Adjusted diluted earnings per share, a non-GAAP measure, was $0.80 for the six months ended June30, 2020, compared to $0.83 for the six months ended June30, 2019. -- GAAP operating income was $50.9 million for the six months ended June30, 2020, compared to $55.9 million for the six months ended June30, 2019. -- Adjusted operating income, a non-GAAP measure, was $66.2 million for the six months ended June30, 2020, compared to $71.7 million for the six months ended June30, 2019. -- Cash flow from operations was $60.4 million in the six months ended June30, 2020, compared to $72.4 million in the six months ended June30, 2019. -- During the six months ended June30, 2020, the Company repurchased 337,007 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $25.0 million. However, as noted above, the Companys share repurchase program is currently suspended.

2020 GUIDANCE

Manhattan Associates provides the following updated revenue, operating margin and diluted earnings per share guidance for the full year 2020:

Guidance Range - 2020 Full Year ($'s in millions, except operating $ Range % Growth margin and EPS) Range Total revenue - current guidance $ $ -10% -8% 554 570 Total revenue - previous guidance $ $ -12% -9% 541 565 Operating Margin: GAAP operating margin - current 17.3% 17.7% guidance Equity-based compensation 5.6% 5.4% Adjusted operating margin^(1) - current 22.9% 23.1% guidance GAAP operating margin - previous 17.5% 17.9% guidance Equity-based compensation 5.4% 5.2% Adjusted operating margin^(1) - 22.9% 23.1% previous guidance Diluted earnings per share (EPS): GAAP EPS - current guidance $ $ -11% -7% 1.17 1.23 Equity-based compensation, net of tax 0.42 0.42 Excess tax benefit on stock vesting (0.06) (0.06) Adjusted EPS^(1) - current guidance $ $ -12% -9% 1.53 1.59 GAAP EPS - previous guidance $ $ -12% -6% 1.16 1.24 Equity-based compensation, net of tax 0.40 0.40 Excess tax benefit on stock vesting (0.06) (0.06) Adjusted EPS^(1) - previous guidance $ $ -14% -9% 1.50 1.58 ^(1) Adjusted operating margin and adjusted EPS are non-GAAP measures that exclude the impact of equity-basedcompensation and acquisition-related costs, and the related income tax effects of these items if applicable.

Manhattan Associates currently intends to publish in each quarterly earnings release certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. See our cautionary note regarding forward-looking statements below. We note in particular that the severity, duration and ultimate impact of theCOVID-19 pandemic are difficult to predict at this time. In addition, those statements do not reflect the potential impact of mergers, acquisitions or other business combinations that may be completed after the date of the release.

Manhattan Associates will make its earnings release and published expectations available on the investor relations section of the Manhattan Associates website at ir.manh.com. Following publication of this earnings release, any expectations with respect to future financial performance contained in this release, including the guidance above, should be considered historical only, and Manhattan Associates disclaims any obligation to update them.

CONFERENCE CALL

The Companys conference call regarding its second quarter 2020 financial results will be held today, July 23, 2020, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at ir.manh.com. To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software.

Those who cannot listen to the live broadcast may access a replay shortly after the call by dialing +1.855.859.2056 in the U.S. and Canada, or +1.404.537.3406 outside the U.S., and entering the conference identification number 9264558 or via the web at ir.manh.com. The phone replay will be available for two weeks after the call, and the Internet webcast will be available until Manhattan Associates third quarter 2020 earnings release.

GAAP VERSUS NON-GAAP PRESENTATION

The Company provides adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share in this press release as additional information regarding the Companys historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors ability to understand and compare the Companys results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Companys Form 8-K earnings release filing for the three and six months ended June30, 2020.

Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income and adjusted diluted earnings per share exclude the impact of equity-based compensation, acquisition-related costs and the amortization of these costs, and (from time to time) restructuring charges all net of income tax effects. We include reconciliations of the Companys GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release.

ABOUT MANHATTAN ASSOCIATES

Manhattan Associates is a technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology and unmatched experience help drive both top-line growth and bottom-line profitability for our customers.

Manhattan Associates designs, builds and delivers leading edge cloud and on-premise solutions so that across the store, through your network or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit www.manh.com.

This press release contains forward-looking statements relating to Manhattan Associates, Inc. Forward-looking statements in this press release include, without limitation, the information set forth under 2020 Guidance, any statements about the future effect of the COVID-19 pandemic on our business, customers or the global economy, our business prospects following the pandemic statements we make about market adoption of our cloud-based solution and other statements identified by words such as may, expect, forecast, anticipate, intend, plan, believe, could, seek, project, estimate, and similar expressions. Prospective investors are cautioned that any of those 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 those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: the risk that the duration and severity of the COVID-19 pandemic, and its ultimate effects on the global economy, our customers and our business, may be worse than expected; risks related from transitioning our business from a traditional perpetual license software company (generally hosted by our customers on their own premises and equipment) to a subscription-based software-as-a service/cloud-based model; disruption in the retail sector; the possible effect of new U.S. tariffs on imports from other countries (and possible responsive tariffs on U.S. exports by other countries) on international commerce; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products technology and customer implementations; and the other risk factors set forth in Item 1A of the Companys Annual Report on Form 10-K for the year ended December 31, 2019, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. 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.

Contact: Matt Humphries, CFA Rick Fernandez Senior Director, Senior Manager, Investor Relations CorporateCommunications Manhattan Associates, Inc. Manhattan Associates, Inc. 678-597-6574 678-597-6988 mhumphries@manh.com rfernandez@manh.com



MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Income(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (unaudited) (unaudited) (unaudited) (unaudited) Revenue: Cloud $ 18,503 $ 9,009 $ 35,763 $ 16,868 subscriptionsSoftware 5,681 11,721 15,416 24,135 licenseMaintenance 35,898 37,323 71,642 73,422 Services 71,778 93,951 159,184 182,582 Hardware 3,770 2,337 7,528 5,738 Total revenue 135,630 154,341 289,533 302,745 Costs and expenses:Cost ofsoftware 591 623 1,146 1,215 licenseCost of cloudsubscriptions, 62,434 70,955 136,710 137,533 maintenanceand servicesResearch and 19,931 21,997 43,259 43,210 developmentSales and 9,709 14,520 22,797 29,301 marketingGeneral and 14,016 16,805 30,130 31,855 administrativeDepreciationand 2,257 1,859 4,603 3,773 amortizationTotal costs 108,938 126,759 238,645 246,887 and expensesOperating 26,692 27,582 50,888 55,858 incomeOther (loss) (158 ) (71 ) 1,262 (442 )income, netIncome before 26,534 27,511 52,150 55,416 income taxesIncome tax 7,330 6,586 10,416 13,519 provisionNet income $ 19,204 $ 20,925 $ 41,734 $ 41,897 Basic earnings $ 0.30 $ 0.32 $ 0.66 $ 0.65 per shareDilutedearnings per $ 0.30 $ 0.32 $ 0.65 $ 0.64 share Weightedaverage number of shares:Basic 63,509 64,623 63,550 64,765 Diluted 64,126 65,093 64,234 65,148



MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIESReconciliation of Selected GAAP to Non-GAAP Measures(in thousands, except per share amounts)

Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019 Operating $ 26,692 $ 27,582 $ 50,888 $ 55,858 incomeEquity-basedcompensation 7,492 8,462 15,056 15,644 (a)Purchaseamortization 110 107 217 215 (c)Adjustedoperating $ 34,294 $ 36,151 $ 66,161 $ 71,717 income(Non-GAAP) Income tax $ 7,330 $ 6,586 $ 10,416 $ 13,519 provisionEquity-basedcompensation 759 2,073 1,649 3,833 (a)Tax benefit ofstock awards 60 154 3,742 58 vested (b)Purchaseamortization 27 26 54 53 (c)Adjusted incometax provision $ 8,176 $ 8,839 $ 15,861 $ 17,463 (Non-GAAP) Net income $ 19,204 $ 20,925 $ 41,734 $ 41,897 Equity-basedcompensation 6,733 6,389 13,407 11,811 (a)Tax benefit ofstock awards (60 ) (154 ) (3,742 ) (58 )vested (b)Purchaseamortization 82 81 163 162 (c)Adjusted netincome $ 25,959 $ 27,241 $ 51,562 $ 53,812 (Non-GAAP) Diluted EPS $ 0.30 $ 0.32 $ 0.65 $ 0.64 Equity-basedcompensation 0.10 0.10 0.21 0.18 (a)Tax benefit ofstock awards - - (0.06 ) - vested (b)Purchaseamortization - - - - (c)Adjusteddiluted EPS $ 0.40 $ 0.42 $ 0.80 $ 0.83 (Non-GAAP) Fully diluted 64,126 65,093 64,234 65,148 shares



Adjusted results exclude all equity-based compensation to facilitate comparison with our peers and because it typically does not require cash settlement.As explained in our Current Report on Form 8-K filed today with the SEC, we do not include this expense when assessing our operating performance.We do not receive a GAAP tax benefit for a portion of our(a) equity-based compensation, mainly due to Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives.The Tax Cuts and Jobs Act further increased those limitations. Thus, in the fourth quarter of 2019, we changed from applying an overall effective rate in our tax adjustment to using the actual tax benefit for equity-based compensation included in our GAAP results after considering the impact of non-deductible equity-based compensation.



Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019 Cost of services $ 2,326 $ 2,448 $ 4,611 $ 4,545 Research and 1,522 1,603 3,063 2,979 developmentSales and marketing 756 976 1,559 1,795 General and 2,888 3,435 5,823 6,325 administrativeTotal equity-based $ 7,492 $ 8,462 $ 15,056 $ 15,644 compensation



Adjustments represent the excess tax benefits and tax deficiencies of the stock awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible for an award of equity instruments on our tax return is more (less) than the cumulative compensation cost recognized(b) for financial reporting purposes. As discussed above, we excluded equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also excluded the related tax benefit (expense) generated upon their vesting. Adjustments represent purchased intangibles amortization from a prior acquisition. We exclude that amortization from adjusted results to facilitate comparison with our peers, to facilitate comparisons of the(c) results of our core operations from period to period and for the other reasons explained in our Current Report on Form 8-K filed with the SEC.





MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIESCondensed Consolidated Balance Sheets(in thousands, except share and per share data)

June 30, December31, 2020 2019 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 123,638 $ 110,678 Accounts receivable, net of allowance of$4,078 and $2,826, at June 30, 2020 and 108,099 100,937 December31, 2019, respectivelyPrepaid expenses and other current assets 20,022 20,426 Total current assets 251,759 232,041 Property and equipment, net 19,458 22,725 Operating lease right-of-use assets 31,791 35,896 Goodwill, net 62,237 62,237 Deferred income taxes 2,529 6,814 Other assets 12,615 12,566 Total assets $ 380,389 $ 372,279 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 16,262 $ 20,561 Accrued compensation and benefits 27,779 45,991 Accrued and other liabilities 19,184 19,325 Deferred revenue 118,795 94,371 Income taxes payable 1,401 1,348 Total current liabilities 183,421 181,596 Operating lease liabilities, long-term 28,431 32,416 Other non-current liabilities 15,759 15,989 Shareholders' equity: Preferred stock, no par value; 20,000,000shares authorized, no shares issued or - - outstanding in 2020 and 2019Common stock, $0.01 par value;200,000,000 shares authorized; 63,518,968and 63,456,986 shares issued and 635 635 outstanding at June 30, 2020 andDecember31, 2019, respectivelyRetained earnings 173,125 159,490 Accumulated other comprehensive loss (20,982 ) (17,847 )Total shareholders' equity 152,778 142,278 Total liabilities and shareholders' $ 380,389 $ 372,279 equity



MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(in thousands)

Six Months Ended June 30, 2020 2019 (unaudited) (unaudited) Operating activities: Net income $ 41,734 $ 41,897 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 4,603 3,773 Equity-based compensation 15,056 15,644 Loss (gain) on disposal of equipment 10 (121 )Deferred income taxes 4,234 272 Unrealized foreign currency (gain) loss (741 ) 156 Changes in operating assets and liabilities:Accounts receivable, net (7,469 ) (312 )Other assets (619 ) (6,144 )Accounts payable, accrued and other (21,787 ) 4,238 liabilitiesIncome taxes 568 (3,145 )Deferred revenue 24,799 16,149 Net cash provided by operating activities 60,388 72,407 Investing activities: Purchase of property and equipment (1,752 ) (3,305 )Net maturities of investments - 1,439 Net cash used in investing activities (1,752 ) (1,866 ) Financing activities: Purchase of common stock (43,155 ) (50,238 )Net cash used in financing activities (43,155 ) (50,238 ) Foreign currency impact on cash (2,521 ) (28 ) Net change in cash and cash equivalents 12,960 20,275 Cash and cash equivalents at beginning of 110,678 99,126 periodCash and cash equivalents at end of period $ 123,638 $ 119,401



MANHATTAN ASSOCIATES, INC.SUPPLEMENTAL INFORMATION

1. Corporate Response to COVID-19:

Regarding the COVID-19 pandemic, we remain cautious about the global recovery, which we expect to be slow and protracted. At mid-year, we are experiencing solid demand for our cloud-based supply chain and omnichannel commerce solutions and our competitive win rates remain strong. In May, we launched Manhattan Active Warehouse Management, the next generation of Warehouse Management. We have rearchitected our warehouse management solution from the ground up as a cloud native, microservices based, versionless application. The reception has exceeded our expectations and pipeline opportunities are building. Our solutions are mission critical, supporting large and complex, global supply chains. While we expect demand to continue to grow for our Cloud solutions, sales cycles will likely extend as customers and prospects contend with the COVID-19 pandemic while evaluating our solutions. Our Professional Services business revenue through the first half of 2020 is down approximately 13%, and excluding billed travel, is down approximately 11%, as clients delay projects due to COVID-19. We have had no notable cancellations in 2020. For the second half, we expect Services revenue to decline, driven by COVID-19 impacts to customers, as well as our traditional retail peak season impact, which typically occurs in the fourth quarter.

2. GAAP and Adjusted earnings per share by quarter are as follows:

2019 2020 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr YTD GAAP Diluted EPS $ 0.32 $ 0.32 $ 0.42 $ 0.26 $ 1.32 $ 0.35 $ 0.30 $ 0.65 Adjustments to GAAP:Equity-based 0.08 0.10 0.09 0.14 0.42 0.10 0.10 0.21 compensationTax benefit of - - - - - (0.06 ) - (0.06 )stock awards vestedPurchase - - - - - - - - amortizationAdjusted Diluted $ 0.41 $ 0.42 $ 0.51 $ 0.40 $ 1.74 $ 0.40 $ 0.40 $ 0.80 EPSFully Diluted 65,204 65,093 64,992 64,807 65,103 64,342 64,126 64,234 Shares

3. Revenues and operating income by reportable segment are as follows (in thousands):

2019 2020 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr YTD Revenue: Americas $ 114,873 $ 121,778 $ 132,028 $ 121,155 $ 489,834 $ 123,146 $ 107,368 $ 230,514 EMEA 26,288 25,043 22,978 23,964 98,273 24,313 21,558 45,871 APAC 7,243 7,520 7,269 7,810 29,842 6,444 6,704 13,148 $ 148,404 $ 154,341 $ 162,275 $ 152,929 $ 617,949 $ 153,903 $ 135,630 $ 289,533 GAAP Operating Income: Americas $ 18,051 $ 16,826 $ 26,310 $ 17,437 $ 78,624 $ 16,282 $ 18,984 $ 35,266 EMEA 7,734 8,057 6,371 4,772 26,934 6,313 5,515 11,828 APAC 2,491 2,699 2,316 2,860 10,366 1,601 2,193 3,794 $ 28,276 $ 27,582 $ 34,997 $ 25,069 $ 115,924 $ 24,196 $ 26,692 $ 50,888 Adjustments (pre-tax): Americas: Equity-based $ 7,182 $ 8,462 8,002 $ 8,195 $ 31,841 $ 7,564 $ 7,492 $ 15,056 compensationPurchase 108 107 108 107 430 107 110 217 amortization $ 7,290 $ 8,569 $ 8,110 $ 8,302 $ 32,271 $ 7,671 $ 7,602 $ 15,273 Adjusted non-GAAP Operating Income: Americas $ 25,341 $ 25,395 $ 34,420 $ 25,739 $ 110,895 $ 23,953 $ 26,586 $ 50,539 EMEA 7,734 8,057 6,371 4,772 26,934 6,313 5,515 11,828 APAC 2,491 2,699 2,316 2,860 10,366 1,601 2,193 3,794 $ 35,566 $ 36,151 $ 43,107 $ 33,371 $ 148,195 $ 31,867 $ 34,294 $ 66,161

4. Impact of Currency Fluctuation

The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands):

2019 2020 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr YTD Revenue $ (2,419 ) $ (1,906 ) $ (1,352 ) $ (670 ) $ (6,347 ) $ (988 ) $ (777 ) $ (1,765 )Costs and (2,686 ) (1,696 ) (988 ) (346 ) (5,716 ) (996 ) (1,430 ) (2,426 )expensesOperating 267 (210 ) (364 ) (324 ) (631 ) 8 653 661 incomeForeigncurrency(losses) (590 ) (377 ) 298 (325 ) (994 ) 1,348 (193 ) 1,155 gains inother income $ (323 ) $ (587 ) $ (66 ) $ (649 ) $ (1,625 ) $ 1,356 $ 460 $ 1,816

Manhattan Associates has a large research and development center in Bangalore, India. The following table reflects the increases (decreases) in the financial results for each period attributable to changes in the Indian Rupee exchange rate (in thousands):

2019 2020 1st Qtr 2nd Qtr 3rd 4th Qtr Full 1st Qtr 2nd Qtr YTD Qtr YearOperating income $ 981 $ 438 $ 51 $ (140 ) $ 1,330 $ 308 $ 895 $ 1,203 Foreign currency(losses) (182 ) (127 ) 437 284 412 1,450 262 1,712 gains in other incomeTotal impact of changes in the $ 799 $ 311 $ 488 $ 144 $ 1,742 $ 1,758 $ 1,157 $ 2,915 Indian Rupee

5. Other income includes the following components (in thousands):

2019 2020 1st Qtr 2nd Qtr 3rd 4th Qtr Full 1st Qtr 2nd Qtr YTD Qtr YearInterest $ 231 $ 178 $ 191 $ 115 $ 715 $ 68 $ 28 $ 96 incomeForeigncurrency (590 ) (377 ) 298 (325 ) (994 ) 1,348 (193 ) 1,155 (losses)gainsOthernon-operating (12 ) 128 321 (5 ) 432 4 7 11 (expense)incomeTotal other $ (371 ) $ (71 ) $ 810 $ (215 ) $ 153 $ 1,420 $ (158 ) $ 1,262 (loss) income

6. Capital expenditures are as follows (in thousands):

2019 2020 1st 2nd Qtr 3rd Qtr 4th Qtr Full 1st Qtr 2nd YTD Qtr Year QtrCapital $ 616 $ 2,689 $ 8,053 $ 3,835 $ 15,193 $ 1,245 $ 507 $ 1,752 expenditures

7. Stock Repurchase Activity (in thousands):

2019 2020 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd YTD QtrSharespurchasedunderpublicly 464 302 429 445 1,640 337 - 337 announcedbuy-backprogramShareswithheldfor taxesdue upon 106 1 4 1 112 219 2 221 vesting ofrestrictedstock unitsTotalshares 570 303 433 446 1,752 556 2 558 purchased Total cashpaid forsharespurchasedunder $ 24,927 $ 19,993 $ 35,955 $ 34,992 $ 115,867 $ 25,000 $ - $ 25,000 publiclyannouncedbuy-backprogramTotal cashpaid forshareswithheldfor taxes 5,233 85 266 36 5,620 18,032 123 18,155 due uponvesting ofrestrictedstock unitsTotal cashpaid for $ 30,160 $ 20,078 $ 36,221 $ 35,028 $ 121,487 $ 43,032 $ 123 $ 43,155 sharesrepurchased

8. Remaining Performance Obligations

Under the new revenue recognition standard, we now disclose revenue we expect to recognize from our remaining performance obligations. Our reported performance obligations primarily represent cloud subscriptions with a non-cancelable term greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Our deferred revenue on the balance sheet primarily relates to our maintenance contracts, which are typically one year in duration and are not included in the remaining performance obligations. Below are our remaining performance obligations as of the end of each period (in thousands):

March 31, June 30, September December March 31, June 30, 2019 2019 30, 2019 31, 2019 2020 2020RemainingPerformance $ 100,532 $ 120,403 $ 152,043 $ 171,665 $ 202,793 $ 225,470 Obligations