Manhattan Associates (MANH) Q1 2019 Earnings Call Transcript

Manhattan Associates (MANH 1.60%)
Q1 2019 Earnings Call
April 23, 2019 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Deadra, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Q1 2019 earnings call. [Operator instructions] As a reminder, ladies and gentlemen, this call is being recorded today, April 23, 2019.

I would now like to introduce Eddie Capel, CEO; and Dennis Story, CFO of Manhattan Associates. Mr. Story, you may begin your conference.

Dennis Story -- Chief Financial Officer

Thank you, Deadra, and good afternoon, everyone. Welcome to Manhattan Associates 2019 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 the future financial performance of Manhattan Associates.

You are cautioned that these forward-looking statements involve risks and uncertainties, are not guarantees of future performance and that actual results may differ materially from the 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 2018 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 the 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.

Eddie Capel -- Chief Executive Officer

Well, good afternoon, everyone, and thank you for joining us to review Manhattan Associates 2019 first- quarter results. We delivered record Q1 total revenue of $148 million. That's applying ASC 606 retrospectively and $0.41 of adjusted EPS. Q1 2019 revenue grew 14%, and that's versus a fairly weak 2018 comp.

And EPS was up 11% over Q1 2018. License, cloud and services revenue results all exceeded Q1 revenue targets on strong demand for our products and services. Sequentially, Q1 2019 total revenue grew about 3% over Q4 2018 as services revenue growth continue to strengthen on strong demand from new license and cloud sales. Our operating margin exceeded expectations modestly on our revenue performance and continued focus on investment in the business to deliver long-term growth objectives.

Despite appropriate cautions regarding the global macro volatility, we're bullish on our outlook for 2019, and we're raising our 2019 full-year total revenue and earnings per share guidance while maintaining our operating margin. We're still early in our transition to cloud with aggressive transformative goals and investments earmarked for driving our customers' success and, in turn, our long-term future growth and earnings.

We continue to be very encouraged by our progress on our cloud transition and, so far, a positive business momentum highlighted specifically by the following four growth areas: Firstly, market-leading product innovation. We continue to invest aggressively in innovation with Q1 R&D investment over -- up 23% over prior year.

For 2019, we're accelerating our innovation investments, committing more than $80 million in total R&D spend. And we believe market demand will generate positive ROI on these R&D investments. We're continuing to deliver industry-leading and transformative supply chain, inventory and omnichannel commerce innovation. Our development cycles are faster than ever, our product and technology releases are bringing important competitively differentiated new solutions to the market resulting in encouraging pipeline growth for us, which brings me to point No. 2, strengthening pipelines.

Our global pipelines are solid across license, cloud and services with upward trends across cloud and services themselves. Now we do expect license revenues to continue to decline year over year as an increased number of customers select our cloud offerings, but we continue to be encouraged by our new customer signings and by the concentration of potential new customers in the pipeline with about half of our deal opportunities representing net new logos. The third growth area, improving consulting services.

Our global services teams are operating at near capacity as global demand continues to strengthen for new product sales and system upgrade activities with our market-leading Manhattan Active omnichannel inventory and supply chain solutions all fueling this demand. At Q1 2019, consulting services revenue was up 13% year over year. I guess a fairly weak comparison, but up 5% sequentially from Q4 2018. We continue to actively recruit global services consultants around the world to meet the demand and drive customer satisfaction.

In Q1 2019, we increased our capacity 6% sequentially over Q4 2018. And then finally, our investments in sales and marketing. Our competitive win rates remain strong at about 70% against head-to-head competition with about 25% of license in cloud sales coming from new customers.Verticals driving more than 50% of our license in cloud revenues in the quarter were retail, consumer goods and food and beverage.

Sales and marketing investments were up 13% over prior year as we continue to focus on driving awareness and the expansion of our sales and account management coverage that's predominantly in the Americas and Europe, and we're aggressively recruiting our sales -- for our sales and marketing teams.

We finished the quarter with 66 people in sales and sales management with 59 quota-carrying sales reps. In Q1 2019, we delivered 20 million in combined cloud and license revenue, that's up 69% over a pretty soft Q1 2018 comp. But our Q1 2019 performance marks our second consecutive quarter of year-over-year combined total software revenue growth.

We continue to be very busy with new cloud implementations of Manhattan Active Omni, and we're also seeing growing interest in our transportation management cloud offering. Importantly, we had our first cloud native point-of-sale customer go live recently and closed two additional point-of-sale transactions for large store format customers early in 2019.

Our point-of-sale pipeline is slowly building, and we're gaining positive traction in head-to-head competitive deals. Overall in Q1, we recognized 7.9 million in cloud revenue, representing a 76% growth over the prior year. Manhattan Active Omni drove more than 50% of the Q1 cloud bookings with the Americas delivering nearly 85% of the deal activity. And we continue to experience early interest in subscription models for our traditional supply chain management solutions, such as scale and inventory in the cloud.

And while in the near term, early adopters will impact our license results. We view this as a positive for long-term subscription revenue growth. So turning to license, we recognized 12.4 million in total revenue for the quarter. Significant deals included three $1 million-plus transactions with two closed in the Americas and one in EMEA.

Two of the three deals were in grocery and the other in the medical device technology space. All three deals are with large Tier 1 customers, two existing and one new. And although deal activity is quite healthy, license performance continues to be impacted by timing, primarily related to the retail reconstitution and by customers and prospects weighing a more flexible purchase options.

So now I'll provide a short product update with particular focus on our Q1 advances in our Manhattan Active Omni application to serve store and contact center associates, and then I'll cover the progress we've made with our transportation management application.

So starting with Manhattan Active Omni, as I already mentioned, we went live with our cloud-native point-of-sale solutions, and things are off to a terrific start, frankly, with positive reviews from store staff and store management. This go live was a significant milestone for us and helps to showcase the advantages that our cloud-native point-of-sale application offers.

And this go live also showcases both our client loyalty and the value our customers see in getting the full selling through fulfillment stack from Manhattan Associates as this customer is now live with Manhattan point-of-sale contact center, order management and warehouse management. And further on the store technology front, in Q1, another Manhattan Active Omni customer rolled out our store fulfillment application to nearly 1,200 stores in about a three-week window.

And this speed which is -- with which our solution was successfully deployed across the store fleet is another testament to our cloud native architecture with our customers needing really little more than mobile devices and a wireless network to start managing in-store pickups and fulfillment from store. And because we keep all of our customers and all of their devices constantly updated, all Manhattan store fulfillment users can take advantage of every new feature that we develop almost immediately.

Also in the area of store fulfillment in Q1, we became the industry's first IoT-enabled solution for managing in-store pickup and shipments. We've enhanced Manhattan store fulfillment to assist store associates in minimizing the most time-consuming portion of performing store fulfillment, searching through the store to gather specific products.

And we've done this with intuitive, guided navigation. The new module leverages in-store RFID data to enable the associate to more efficiently select items for batch picking or even single- item pickup in store. In Q1, we also kicked off several implementations of our new customer engagement application within the Manhattan Active Omni suite of solutions. And as a reminder, customer engagement is our CRM offering for the omnichannel commerce market, and it can be deployed to support associates either in the store or in the contact center.

Embedded within our order management, customer engagement allows associates to see a single unified view of the customer across all channels. And with this application, retail associates can communicate with customers via a myriad of channels including social media and so forth to provide personalized product and service recommendations. Now turning to our supply chain solutions, Q1 saw meaningful progress in our transportation management business.

In addition to expanding the number of U.S. domestic shippers using our cloud-based TMS, we also signed our very first customer in Brazil. We also continue to make strides in building our TMS business in EMEA with our sales and marketing efforts yielding a healthy sales pipeline with deals in all phases. Our global expansion has also been supported by our move to the cloud as our ability to deploy in additional theaters is now substantially faster and more effective.

And finally, I'm happy to report that we've been recognized as the leader – as a leader in the Gartner Magic Quadrant for TMS and moving into the leaders' quadrant is a reflecting -- a reflection of both the increased focus and investment that we've given TMS in recent years and our growing and highly satisfied TMS customer base.

And we're pleased that Gartner has recognized our progress, and we believe that we'll continue to grow this particular business segment in the coming quarters and years to come. And finally, we are looking forward to hosting our annual user conference, Momentum. This year, it'll be held at the JW Marriott in Scottsdale, Arizona, from May 19th to May 22nd. And there, we'll launch several new innovative solutions to our customers, partners, press and analysts.

So that covers the business update. So Dennis, why don't you provide the financial update, our 2019 full-year guidance? And then I'll cover of some -- our prepared remarks with a brief summary.

Dennis Story -- Chief Financial Officer

Thanks, Eddie. As Eddie mentioned, we reported Q1 total revenue of 148 million, up 14% versus Q1 of 2018. Excluding FX, total revenue was up 15.5%. Adjusted earnings per share was $0.41, up 11% over Q1 2018.

Our EPS performance includes a $0.02 benefit from an annual R&D payroll tax credit we had forecast to receive in Q2 of this year. Our GAAP earnings per share was $0.32 in the quarter, compared to $0.33 in Q1 2018, with stock-based compensation accounting for the difference between adjusted EPS and GAAP. License revenue was $12.4 million, exceeding the $9 million target discussed in our Q4 call. For Q2 2019, we are targeting $9 million in license revenue recognized.

And for full-year 2019, our estimate of 36 million to 40 million remains unchanged with license gross margin to be about 89%. Q1 cloud revenue was $7.9 million, up 76% over Q1 2018. For Q2 2019, we are estimating our recognizable cloud revenue to be about $8.7 million, up about 62% over prior year. For full-year 2019, we are still targeting a cloud revenue recognized range of $36 million to $40 million, representing 56% to 73% growth over 2018.

Our 2019 full-year estimate for total combined license and cloud revenue recognized remains at $76 million, up 11% over 2018. As a reminder, remaining performance obligation or RPO is a U.S. GAAP disclosure requirement. Our RPO disclosure is the leading proxy for our cloud bookings performance and represents the value of contractual obligations required to be performed, otherwise referred to as unearned revenue or bookings.

Our RPO for the quarter totaled $101 million, up 196% over prior year and up 31% sequentially over Q4 2018. For Manhattan, this disclosed value represents our cloud bookings value of unearned revenue under noncancelable contracts greater than one year. Contracts with a noncancelable term of one year or less are excluded from our reported amount. One last point on license and cloud, our performance continues to depend on the number and relative value of large deals we close in any quarter.

While large deals remain important, we expect the mix to continue to shift toward subscription models in 2019 and beyond. While this is a positive, deal sizes maybe a bit smaller as subscription revenue recognized over time and product components are also easier to add over time in contrast to one-and-done enterprise deals. We also retain some caution around slow decision-making by some clients and prospects, particularly retailers and potential global macro and geopolitical events that could impact business investment cycles. Turning to maintenance, revenue for the quarter totaled $36 million, essentially flat versus Q1 and Q4 2018 comps.

Our strong retention rates continue at greater than 95-plus percent, and for 2019, we are estimating maintenance revenue to be about $145 million to $146 million, down about 1% over 2018, impacted by our cloud transition. We estimate Q2 2019 maintenance to be about $36 million. Overall, our maintenance results will be influenced by perpetual license deals closed during the year, existing customer conversions to cloud, retention rates and timing of cash collection. For services, consulting revenue for the quarter totaled $88.6 million, up 13% over Q1 2018 on improving global demand.

We're targeting Q2 revenue growth of 7% to 8% over prior year with a midpoint target of $88.5 million. We expect second half 2019 year-over-year growth comps to be tighter, reflecting improving America's demand exiting 2018. With services demand and pipeline increasing, we are raising our full-year growth estimate to 5.5% to 8% over prior year with a midpoint value of about $352 million. Our prior growth estimate was flat to 3%.

Our consolidated subscription, maintenance and services margin for the quarter was 51.4%, driven by increased headcount investment in cloud and consulting services. For 2019, we expect Q2 subscription maintenance and services margin to be about 51.5% and full-year margin to be about 52.4%. Our 2019 services gross margin reflects our investment in cloud operations, performance-based compensation and increased capacity to meet demand. Turning to operating income and margin, our Q1 operating income totaled $35.6 million with an operating margin of 24%.

For full-year 2019, we are targeting operating income in the range of $122 million to $126 million, up from our previous estimate of 118 million to 122 million. Our operating margin should be in the 21% to 21.2% range with operating income of nearly $124 million at the midpoint. For Q2 2019, we are estimating operating income of $28.6 million to $31 million with a 29.7 million-dollar midpoint and operating margin of 20% to 21% with a midpoint of 20.5%, two-zero-point-five percent. Our margin forecast is driven by our continued focus on making growth investments across our business and people, IT and facilities, including R&D, sales and marketing, cloud ops, consulting services and performance-based compensation.

So that covers the operating results. Our Q1 adjusted effective income tax rate was 24.5%, and we're estimating a 24.5% effective tax rate for both Q2 and 2019 full year. Regarding our capital structure, we invested $25 million in Q1 2019 share buybacks. Last week, our board approved replenishing our repurchase authority limit to a total of $50 million.

We are estimating about 65.5 million diluted shares full year and about 65.4 million per quarter, which assumes no buyback activity.Turning to cash, we closed the quarter with cash and investments totaling 105 million and zero debt. Our current deferred revenue balance totaled $94 million, up 15% over Q4 2018, driven primarily by increased maintenance and cloud billings. For the quarter, cash flow from operations totaled $35 million, down from prior year on 2018 annual-bonus payout and cash income taxes paid in this past quarter, Q1 2019.

Capital expenditures for the quarter totaled $600,000, and for 2019, with the assumption of incremental facilities investments in both India and the U.S., we estimate capital expenditures to be approximately $15 million. So I'll wrap up with our updated 2019 guidance, and then I'll turn it back to Eddie for his closing remarks. We will continue to provide annual guidance on total revenue, operating margin and earnings per share.

As we've previously stated, the more short-term success we have with subscription adoption, the weaker our near-term reported income statement results will be, effectively masking a significant level of underlying value creation. For revenue, we are raising our 2019 total revenue guidance from our previous range of 564 million to 576 million to 582 million to 592 million, targeting 2019 revenue growth of 4% to 6% over prior year with a midpoint estimate of 587 million.

Our previous guidance pegged year-over-year growth at zero percent to 3%. For EPS, we're raising our adjusted EPS range to $1.42 to $1.46 with a midpoint estimate of $1.44. Our previous range was $1.38 to $1.42. And our GAAP EPS guidance is $1.05 to $1.09.

For operating margin, we are targeting a full-year margin range of 21% to 21.2% and a GAAP operating margin range of 15.6% to 15.8%. Our margin objectives reflect our business transition to cloud, continuing to ramp in 2019, including related incremental growth investments with the objective of driving long-term sustainable growth and earnings leverage. Lastly, as we mentioned in our Q4 call, we will update our long-term aspirations at the end of the year based on our 2019 performance. That covers the financial update.

Thank you. And back to Eddie.

Eddie Capel -- Chief Executive Officer

Ok. Thanks, Dennis. So in summary, we're pleased with the quarter and our progress on our cloud transition. Our underlying business fundamentals is solid and we remain focused on extending our market-leading position in supply chain, inventory and omnichannel commerce solutions.

Our success continues to be driven by delivering innovation that anticipates the needs of an evolving market, focusing on our customers' success and leveraging our deep domain expertise. We're off to a solid start in 2019, and we remain confident in the significant and expanded business opportunity in our core markets driven by the ongoing retail evolution that is also driving the need for supply chain modernization.

Our competitive position is strong, and we continue to invest in innovation to extend our addressable market, as well as the market leadership and our differentiation. And customer feedback and win rates continue to validate our investment strategy. As always, we remain focused on our customers' success and on driving sustainable, long-term growth for our shareholders. With the world's most talented supply chain commerce employees, the best software solutions and market dynamics that require customer investment in supply chain innovation, we do believe that we're very well positioned.

So with that, Deadra, we'd be happy to take any questions. 

Questions and Answers:

Operator

OK. [Operator instructions]And our first question comes from Terry Tillman with SunTrust Robinson.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Hey, gentlemen, can you hear me OK?

Eddie Capel -- Chief Executive Officer

We can, Terry. A little muffled, but we can hear you just fine.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

OK. All right. Well, thanks, and nice job in the quarter. The first question, Eddie, just relates to, I think, you all talked about 50% of the cloud business is related to Active Omni in that platform.

I historically thought of that mostly as just your OMS business and traction there, it feels like you're talking more about point-of-sale in-front-of-the-store-type technology and success in closing business. What I'm curious about is what, if anything, was an inflection point there? Was it some additional capabilities in your products for front of the store, or is it just an upgrade cycle that's occurring now versus in the prior year or two? Maybe just a little bit more color on some of the diversifying of Active Omni's success.

Eddie Capel -- Chief Executive Officer

Yes. I wouldn't call it diversifying, Terry. I mean, it is a suite of solutions. At the core of that suite is the order management solutions, but no question that we are seeing advanced or enhanced, I should say, traction in the front of the store with store inventory in fulfillment, store inventory management.

And we are beginning to see traction with point-of-sale. Obviously, we've been talking about this for several quarters now, but fortunately, we had our very first point-of-sale customer go live recently, so that was -- it's been very helpful. Now we've closed another couple of point-of-sale deals early in the year here. I mean, these are all for pretty large footprint stores, frankly, so we're -- and large store counts.

So we're pleased with the progress there, but it's still all anchored around the Omni suite of solutions.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

OK. And maybe, Eddie, just maybe a report card on how you are doing in terms of sales execution and selling cloud products, maybe a report card in terms of -- Do you have all the sales resources? Do you need more of a newer breed of a salesperson or is it existing salespeople are just getting them to, kind of, talk a different language and cloud solutions? Just maybe an update on just where do you think you are in terms of the report card on sales activity.

Eddie Capel -- Chief Executive Officer

Yes. I think the activity is -- first of all, the activity is very good, Terry. Our ability to execute win rates is still strong. I think the team is doing a terrific job along -- frankly, with the sales team along with the rest of the company transitioning to the cloud.

We are actively looking for additional sales team members mostly in the domain areas in which we are newest, so front-of-store and so forth. But frankly, I would give very high marks to our sales organization as we transition to the cloud. I think not only we got great win rates, but we're getting the appropriate value for our solutions, as well.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

OK. And maybe just a final question, and I'll turn it over. Dennis, as it relates to RPO, that sequential change was significant it rivaled 2Q '18. What I'm curious is, can you give us an update on -- did anything change on contract duration in terms of some of the new business on the cloud side, or was that relatively constant with prior quarters? Thank you.

Dennis Story -- Chief Financial Officer

Relatively constant with prior quarters, Terry. But very good volume in the quarter, for sure.

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

OK, thanks.

Dennis Story -- Chief Financial Officer

Good. Thank you, Terry.

Operator

And your next question comes from Brian Peterson with Raymond James.

Brian Peterson -- Raymond James -- Analyst

Hi, gentlemen. Congrats on the quarter, and thanks for taking the question. So I wanted to hit on the services upside this quarter. It was obviously a lot better than we had modeled.

I'm curious how much of that is coming from newer or more recent wins versus maybe some of the projects a few years ago that had been delayed and are now coming back into the pool.

Eddie Capel -- Chief Executive Officer

Hey, good balance, good balance, Brian, frankly. So great services attach rate for the new cloud and license sales. Projects getting kicked off swiftly. So that's certainly helping, and I do think also we are seeing a little bit of rebound, if we would want to call it that, a little rebound from some of the sluggishness that we saw in 2017.

So a little bit of both, but as I say -- I would say that the new cloud and license sales are fueling the bulk of that.

Brian Peterson -- Raymond James -- Analyst

Yeah. Thanks, Eddie. Maybe just one follow-up on the point-of-sale business. So how should we think about that in terms of maybe up sell versus kind of the core order management for Active Omni -- for these deployments, are they a little bit more staggered versus Active Omni? And should we think about these as kind of a big one quarter rollout, or should it be a multiyear? How should we think about that? Thanks, guys.

Eddie Capel -- Chief Executive Officer

Yes. Well, so two pieces of that, Brian. One is we're just getting started. We think there's really terrific upside for that business as retail continues to evolve.

So a fantastic upside over the next several years as we continue to acquire customers, the market continues to transform, No. 1. And -- but the synergy is really between, for us, is between OMS and point-of-sale. I think being able to get a single view of the customer across all channels, getting a single view of inventory across the entire network that permeates through from order management into all of those customer-facing tools, frankly, whether they be point-of-sale, call center.

All customer engagement is a real strategic differentiator for us and for our customers. So we're off to a great start, but it is going to take some time for this flywheel to really pick up momentum.

Brian Peterson -- Raymond James -- Analyst

Thanks, Eddie.

Eddie Capel -- Chief Executive Officer

Sure thing, Brian.

Operator

And your next question comes from Matt Pfau with William Blair.

Matt Pfau -- William Blair and Company -- Analyst

Hey, guys. Thanks for taking my questions. I want to follow up on the point-of-sales, as well. So can you just give us an idea of how we should think about the size of a point-of-sale deal, maybe compared to WMS? Or, I guess, another way to think about it would be if you're selling another product to a WMS customer, would point-of-sale be the -- typically the most incremental product in terms of total deal size relative to the other products you could potentially crossover?

Eddie Capel -- Chief Executive Officer

Yes, I think it's a little early to tell and a little early to be talking about average deal sizes specifically for point-of-sale and so forth, Matt. But when we think about the total addressable market, right, now and that includes all of the systems that are in the retail store because remember retail store specific transactional-based point-of-sale has been at the center of the retail store for the last 125 years. As stores transition from being single-function facilities to being multi-function facilities, we believe it calls for a new system. And those -- and that's the suite of solutions that we are offering to front-of-store.

With that said, we believe that being able to offer that front-of-store suite of solutions, approximately, doubles our total addressable market from somewhere in the range of $8 billion a year to somewhere in the range of $16 billion a year. So it's a market worth going after. It is still evolving, but candidly a little too early to be talking about ASPs specifically for that module.

Matt Pfau -- William Blair and Company -- Analyst

Got it. And then with the customers that you've signed so far, maybe you can just talk about what drove them to reevaluate their point-of-sale solution. And then is there anything out there that could potentially, I guess, accelerate or increase the number of deals that potentially come up for a bit over the next several years for you guys?

Eddie Capel -- Chief Executive Officer

Yes, I don't know -- the last question first. I don't know other than continuing to invest in innovation and bringing new capability to market, I don't know that we can really create an opportunity to really accelerate other than the market transition. Clearly, as we get referenceable customers and we're being able -- we're able to deliver value for them, I think, that certainly can increase the rotational and gravitational pull of the flywheel.

But it's the -- in answer to your question around what sort of driving -- what's driving the decision and so forth, frankly, our customers are buying into our consolidated suite of solutions. So it's not about just replacing current PMS -- POS with kind of new POS, it's reinventing that selling platform strategy and having OMS aligned with call center, customer engagement and the next generation of multi-channel point-of-sale.

Matt Pfau -- William Blair and Company -- Analyst

Got it. Thanks, guys. That's it for me. I'll pass the line.

Eddie Capel -- Chief Executive Officer

OK, terrific. Thank you, Matt. Appreciate it.

Operator

[Operator instructions]

Eddie Capel -- Chief Executive Officer

All right, Deadra, it sounds like we have a wrap with no more questions. So with that, I'd just thank everybody for joining us on our Q1 call. Now we're excited about the future, and we'll be looking forward to sharing the results of Q2 in about three months or so. Good afternoon.

Operator

[Operator signoff]

Duration: 41 minutes

Call Participants:

Dennis Story -- Chief Financial Officer

Eddie Capel -- Chief Executive Officer

Terry Tillman -- SunTrust Robinson Humphrey -- Analyst

Brian Peterson -- Raymond James -- Analyst

Matt Pfau -- William Blair and Company -- Analyst

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