MANH CC Notes
- MANH closed their first deal with the Dept. of Defense in Q3. They currently have a nice pipeline of deals with the Fed Gov, mainly at the DoD, but they are also working with 7- other depts.
- Over 160 companies have expressed an interest in RFID, about half are Fortune 500 companies. Of this group, they have signed 3, have been selected(but no signed deal yet) by another 3, and consider another 20 "very interested". Of those 20, they think about 12 of them are waiting for the November Walmart meeting before making a decision. Of the total of 160, about 25%-30% are current MANH customers, while 70%-75% are not(New Business!!).
- MANH is actively hiring for new opportunities, they have over 40 open reqs.
- The pipeline for deals is exceptionally strong, but the sales cycle also seems much longer. They have seen a big jump in the retail pipeline in the last 60 days. The sales cycle seems to have been extended by several months on average. They think this could be a result of either RFID, EOY budgets, or in some cases summer vacations(especially Europe, where nobody works in August). They said they had 15 sales deferrals in Q3, well above the normal range of 6-8 or so.
- RFID is still a relatively small part of revenue, they think Q4 would fall in a very broad range of $300K - $2.5M. Many of these deals are pilots, although they are already seeing interest in full blown projects. 'RFID In a Box' is a standard package consisting of about 1/3 services, 1/3 license fees, and 1/3 third party hardware. They are not sure how many companies will opt for this standard package vs. customized packages tailored to specific needs.
- One analyst asked about the WalMart deadline of Jan2005. MANH said the Nov. 4 WalMart meeting is the key date, where they are supposed to outline their RFID requirements. MANH said they are seeing a lot of companies not in the Top 100 suppliers trying to get into WalMart's pilot/trial anyway, intending to please WalMart.
- MANH is having difficulty quantifying the 04-05 RFID opportunity. They feel many companies will need to completely replace their systems to handle RFID data, many current systems are either home-grown or still use paper.
- They defined RFID Middleware, the product they launched in Q3, as a product that bolts onto either MANH or their competitor's solutions and communicates with RFID equipment.
- Due to the building backlog, extended sales cycles, the emerging IT recovery, and RFID, MANH is not going to offer any 2004 guidance until their Q4 earnings call.
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