As filed with The Securities and Exchange Commission on May 29, 2002
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MANUGISTICS GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 52-1469385
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
9715 Key West Avenue
Rockville, Maryland 20850
(301) 255-5000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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Gregory J. Owens
Chief Executive Officer
Manugistics Group, Inc.
9715 Key West Avenue
Rockville, Maryland 20850
(301) 255-5000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
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Copy to:
Merritt A. Cole, Esquire
John D. Kessler, Esquire
Dilworth Paxson LLP
3200 Mellon Bank Center
1735 Market Street
Philadelphia, Pennsylvania 19103-7595
(215) 575-7000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
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Common Stock, par value $0.002 per share............. 2,420,513(1) $9.75(1) $23,600,002 $2171.20
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended, by taking
the average of the high and low prices of the registrant's common stock
reported on The Nasdaq National Market on May 28, 2002.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. A
Registration Statement relating to these securities has been filed with The
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus is not an offer to sell these securities nor a
solicitation of an offer to buy these securities in any state where the offer
and sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 29, 2002
MANUGISTICS GROUP, INC.
[MANUGISTICS LOGO]
2,420,513 SHARES
COMMON STOCK
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We are going to issue shares of our common stock, $.002 par value per
share, to Western Data Systems of Nevada, Inc., a Nevada corporation ("WDS"), in
connection with our acquisition on April 26, 2002 of substantially all of the
assets of WDS. WDS, the selling stockholder, may sell the shares offered by this
Prospectus directly to purchasers or through underwriters, broker-dealers or
agents, who may receive compensation in the form of discounts, concessions or
commissions.
We will not receive proceeds from the sale of the shares (sometimes
referred to in this Prospectus as the "Shares") offered by the selling
stockholder, except possibly under very limited circumstances which might arise
in connection with the settlement of any claims which we may make against an
escrow account established in connection with the acquisition.
Our common stock is listed on The Nasdaq National Market under the symbol
"MANU." On May 28, 2002, the closing sale price of our common stock, as reported
on The Nasdaq National Market, was $ 9.31
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
The securities offered or sold under this Prospectus have not been approved
by the SEC or any state securities commission, nor have these organizations
determined that this Prospectus is accurate or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is June , 2002
In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this Prospectus. If
information is given or representations are made, you may not rely on that
information or those representations as having been authorized by us. This
Prospectus is neither an offer to sell nor a solicitation of an offer to buy any
securities other than those registered by this Prospectus, nor is it an offer to
sell or a solicitation of an offer to buy securities where an offer or
solicitation would be unlawful. You may not imply from the delivery of this
Prospectus, nor from any sale made under this Prospectus, that our affairs are
unchanged since the date of this Prospectus or that the information contained in
this Prospectus is correct as of any time after the date of this Prospectus.
Manugistics is a registered trademark, and the Manugistics logo and the
phrase "Leveraged Intelligence" are trademarks of Manugistics, Inc. All other
product or company names mentioned are used for identification purposes only,
and may be trademarks of their respective owners.
Unless the context otherwise requires, the terms "we," "our," "us",
"Manugistics" "the Company" or "Registrant" refers to Manugistics Group, Inc., a
Delaware corporation.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
In addition to the historical information contained in this prospectus,
this prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Such statements are based upon current expectations that
involve risks and uncertainties. Any statements contained herein that are not
statements of historical fact may be deemed forward-looking statements. For
example, words such as "may", "will", "should", "estimates", "predicts",
"potential", "continue", "strategy", "believes", "anticipates", "plans",
"expects", "intends", and similar expressions are intended to identify
forward-looking statements. Our actual results and the timing of certain events
may differ significantly from the results discussed in the forward-looking
statement. Factors that might cause or contribute to such a discrepancy include,
but are not limited to, those discussed under the heading "Risk Factors" and the
risks discussed in our future filings under the Exchange Act of 1934, as
amended.
You should read this prospectus completely and with the understanding that
actual future results may be materially different from what we expect. We will
not update these forward-looking statements, even though our situation may
change in the future, except to the extent required by law.
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PROSPECTUS SUMMARY
The following is a summary of our business. You should carefully read the
section entitled "Risk Factors" in this prospectus for more information on our
business and the risks involved in investing in our stock.
OUR BUSINESS
We are a leading global provider of Enterprise Profit Optimization(TM)
(EPO) solutions. We provide solutions for supply chain management (SCM),
supplier relationship management (SRM), pricing and revenue optimization (PRO)
and service & parts management (S&PM). Our solutions help companies lower
operating costs, improve customer service, increase revenues, enhance
profitability and accelerate revenue and earnings growth. They do this by
creating efficiencies in both how goods and services are brought to market
(supplier relationship management and supply chain management), how they are
sold (pricing and revenue optimization) and how they are serviced and maintained
(S&PM). EPO solutions provide additional benefits by combining the proven
cost-reducing power of SRM, SCM and S&PM solutions and the revenue-enhancing
capacity of PRO solutions. These solutions integrate pricing, forecasting, and
operational planning and execution to help companies enhance margins across the
enterprise and the extended trading network.
Our SCM solutions help enable companies to plan and execute their supply
chain processes. These processes include manufacturing, distribution and service
operations, and collaboration with a company's extended trading network of
suppliers and customers. Our SRM solutions help improve the activities required
to design, source, and procure goods and to collaborate more effectively with
key suppliers of direct materials. Our PRO solutions help optimize a company's
demand chain, including pricing and promotions to all customers through all
channels, with the aim of balancing the trade-offs between profitability and
other strategic objectives such as market share. Our S&PM solutions help
companies optimize and manage their service and parts operations by effectively
planning and scheduling maintenance programs, parts, materials, tools, manpower
and repair facilities to profitably provide the highest levels of customer
service. We also provide strategic consulting, implementation and customer
support services to our clients as part of our solutions.
Increasing global competition, shortening product life cycles and more
demanding customers have forced businesses to provide improved levels of
customer service while shortening the time it takes to bring their products and
services to market. We were an early innovator in solutions that allow
collaboration among our clients and their customers and suppliers. We focus the
development of our technology on addressing the changing needs of companies in
the markets we serve, including the need to do business in extended trading
networks. We offer solutions to companies in many industries including apparel;
automotive; chemical & energy; communications & high technology; consumer
packaged goods; financial services; food & agriculture; footwear & textiles;
government, aerospace & defense; industrials; life sciences; retail; third-party
logistics; transportation; and travel, transport & hospitality. Our customer
base of approximately 1,200 clients includes large, multinational enterprises
such as 3Com Corporation; Boeing Co.; BP; Brown & Williamson Tobacco Corp.;
Caterpillar Mexico S.A. de C.V.; Cisco Systems Inc.; Coca-Cola Bottling Co.
Consolidated; Compaq Computer Corporation; Delta Air Lines; DuPont; Fairchild
Semiconductor; Ford Motor Company; Harley-Davidson, Inc.; Hormel Foods Corp.;
Levi Strauss & Co.; Nestle; Staples, Inc.; Texas Instruments Incorporated; and
Unilever Home & Personal Care, USA; as well as mid-sized enterprises.
Our principal executive offices are located at 9715 Key West Avenue,
Rockville, Maryland 20850, and our main telephone number is (301) 255-5000. We
have offices in Atlanta, Chicago, Denver, Irving, Philadelphia and San Carlos in
the United States, and internationally in Australia, Belgium, Brazil, Canada,
France, Germany, Hong Kong, Italy, Japan, Mexico, Taiwan, The Netherlands,
Singapore and the United Kingdom.
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THE OFFERING
Common Stock to be issued.................... 2,420,513 shares (1)
Common Stock Outstanding..................... 69,589,201 (2)
Use of Proceeds.............................. We will not receive any proceeds from any
resale by WDS of our common stock, except
possibly under very limited circumstances
which might arise in connection with the
settlement of any claims which we may make
against an escrow account established in
connection with the acquisition. See "Use of
Proceeds."
Nasdaq Symbol................................ MANU
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(1) The number of shares to be issued has been estimated by dividing $23,600,000
by the average of the high and low sale prices of our common stock of $9.75
on May 28, 2002. The number of shares to be initially issued will be
determined by dividing $23,600,000 (the "Negotiated Value") by the average
of the closing sales prices of our common stock as reported by the Nasdaq
National Market System for the two consecutive trading days ending on the
second trading day prior to the effective date of the registration statement
of which this Prospectus is a part. Pursuant to the asset purchase agreement
between WDS and us, some of the shares included for resale under this
Prospectus will be required to be returned to us if the average of the
closing sales prices of our common stock as reported by the Nasdaq National
Market System for the ten trading day period beginning on the first trading
day after the effective date of the registration statement (the "Average
Value") multiplied by the number of shares issued on the effective date of
the registration statement exceeds $24,780,000. The number of shares which
WDS would be required to return to us would be determined by dividing the
difference between (i) the product of the Average Value and the number of
shares issued on the effective date and (ii) the Negotiated Value, divided
by the Average Value. In addition, we may issue additional shares to WDS if
the Average Value multiplied by the number of shares issued on the effective
date of the registration statement is equal to or less than $22,420,000. The
number of additional shares that we may issue would be based upon difference
between (i) the Negotiated Value and (ii) the product of the Average Value
times the number of shares issued on the effective date of the registration
statement, divided by the Average Value, up to a maximum number of shares
equal to $8,260,000 divided by the Average Value. If we issue additional
shares after the effective date of this registration statement, the
additional shares will be registered for resale on a subsequent registration
statement. If this registration statement is not declared effective within
180 days of the date that it was filed we will be required to pay the
Negotiated Value in cash.
(2) As of the close of business on May 24, 2002.
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RISK FACTORS
An investment in the shares of our common stock involves a high degree of
risk. Before you decide to purchase shares of our common stock, you should
carefully consider these risk factors together with all of the other information
included in this prospectus. The risks and uncertainties described below are not
the only ones facing us. Additional risks and uncertainties that we do not
presently know or that we currently deem immaterial, may also impair our
business, results of operations and financial condition.
RISKS RELATED TO OUR BUSINESS
THE TERRORIST ATTACKS THAT TOOK PLACE IN THE UNITED STATES ON SEPTEMBER 11, 2001
WERE UNPRECEDENTED EVENTS THAT HAVE CREATED MANY ECONOMIC AND POLITICAL
UNCERTAINTIES, SOME OF WHICH MAY HARM OUR BUSINESS AND PROSPECTS AND OUR ABILITY
IN GENERAL TO CONDUCT BUSINESS IN THE ORDINARY COURSE.
The terrorist attacks that took place in the United States on September 11,
2001, and thereafter in the United States and elsewhere in the world have
adversely affected many businesses, including ours, in multiple ways. The
national and global responses to these terrorist attacks, some of which are
still being formulated, may materially adversely affect us in ways we cannot
predict at present. Some of the possible material adverse impacts to our
business include, but are not limited to:
- the reduced ability to do business in the ordinary course as it is
customarily conducted, resulting from a variety of factors, including
changes or disruptions in movement and sourcing of materials, goods and
components or the possible interruption in the flow of information or
monies;
- a lengthening of our sales cycles and implementations, which might result
from a number of factors, including among others changes in security
measures for passenger air travel and reductions in available commercial
flights which may make it more difficult for our sales force to schedule
face-to-face meetings with prospects and to negotiate and consummate
transactions;
- increased credit and business risk for customers in industries that were
severely impacted by the attacks, including passenger airlines and other
travel and hospitality industries; and
- possible reductions, delays or postponements, in capital expenditures as
a result of changes in priorities and approval processes.
AS A RESULT OF OUR SIGNIFICANT LOSSES IN RECENT FISCAL YEARS AND SIGNIFICANT
CHANGES IN OUR PRODUCTS AND SERVICES, YOU MAY HAVE DIFFICULTY EVALUATING OUR
FUTURE PROSPECTS.
We experienced operational difficulties in fiscal 1999 and the first half
of fiscal 2000. Problems with our direct sales operation and intense
competition, among other factors, contributed to net losses in fiscal 1999 and
fiscal 2000 and a decline in revenue in fiscal 2000. Late in our second quarter
of fiscal 2002 and into our third quarter of fiscal 2002, we again experienced a
decline in revenue, due to weakening economic conditions and the affects
resulting from the terrorist attacks of September 11, 2001. Since April 1999, we
enhanced our supply chain optimization products and services, expanded the scope
of our product and service offerings to include supplier relationship
management, service & parts management and pricing and revenue optimization and
improved our direct sales organization. Our ability to continue to improve our
financial performance and maintain financial stability will be subject to a
number of risks and uncertainties, including the following:
- weakening economic conditions which adversely impacted our operating
performance during the quarters ended August 31, and November 30, 2001
and may continue into the future;
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- slower growth in the markets for SRM, SCM, PRO & S&PM solutions than
expected;
- our ability to introduce new software products and services to respond to
technological and client needs;
- our ability to manage through difficult economic and political
environments;
- our ability to hire, integrate and deploy our direct sales force
effectively;
- our ability to expand our distribution capability through indirect sales
channels;
- our ability to contain or reduce operating costs without adversely
impacting revenue growth;
- our ability to respond to competitive developments and pricing; and
- our dependence on our current executive officers and key employees.
If we fail to successfully address these risks and uncertainties, our
business could be harmed and we could continue to incur significant losses.
WE HAVE EXPERIENCED SIGNIFICANT LOSSES IN RECENT YEARS. OUR FUTURE RESULTS WILL
BE ADVERSELY AFFECTED BY SEVERAL TYPES OF NON-CASH CHARGES WHICH COULD IMPAIR
OUR ABILITY TO ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE.
We have recently incurred significant losses, including net losses of
$115.2 million during fiscal 2002, $28.1 million in fiscal 2001 and $8.9 million
in fiscal 2000. As a result of the WDS acquisition in April 2002, we will likely
incur a non-cash charge in our first quarter of fiscal 2003 related to purchased
research and development which has not yet been determined to be technologically
feasible and has no alternative future use in its current stage of development.
We will incur non-cash charges in the future related to the amortization of
intangible assets, including acquired technology and non-cash stock compensation
expenses associated with our acquisition of Talus Solutions, Inc. (Talus). We
will also incur non-cash charges related to the amortization of certain
intangible assets, including acquired technology, relating to the acquisition of
WDS, STG Holdings, Inc., PartMiner Inc.'s CSD business and SpaceWorks Inc. In
addition, we have incurred and may in the future incur non-cash stock
compensation charges related to our stock option repricing. During fiscal 2002,
we announced that we were required to write off our investment in Converge,
Inc., which resulted in a pre-tax charge of $10.2 million. We may also incur
non-cash charges in future periods related to impairments of long-lived assets.
We cannot assure you that our revenue will grow or that we will achieve
profitability in the future. Our ability to increase revenue and achieve
profitability will be affected by the other risks and uncertainties described in
this section. Our failure to achieve profitability could cause our stock price
to decline.
OUR OPERATING RESULTS FLUCTUATE, AND IF WE FAIL TO MEET THE EXPECTATIONS OF THE
INVESTMENT COMMUNITY IN ANY PERIOD, OUR STOCK PRICE COULD SUFFER FURTHER
SIGNIFICANT DECLINES.
Our revenue and operating results are difficult to predict and have become
more difficult to predict since global economic uncertainties and political
instability increased in fiscal 2002. We believe that period-to-period
comparisons of our operating results will not necessarily be indicative of
future performance. The factors that may cause fluctuations of our quarterly
operating results include the following:
- the size, timing and contractual terms of licenses and sales of our
products and services;
- customer financial constraints and credit-worthiness;
- the potentially long and unpredictable sales cycle for our products;
- technical difficulties in our software that could delay the introduction
of new products or increase their costs;
- introductions of new products or new versions of existing products by us
or our competitors;
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- delay or deferral of customer purchases and implementations of our
solutions due to weakening economic conditions which adversely impacted
our operating performance during the quarters ended August 31, 2001 and
November 30, 2001;
- increased economic uncertainty and political instability world-wide
following the terrorist attacks which began in the United States on
September 11, 2001;
- changes in prices or the pricing models for our products and services or
those of our competitors;
- changes in the mix of our software, services and support revenue;
- changes in the mix of software products we sell and related impact on
third-party royalty payments;
- changes in the mix of sales channels through which our products and
services are sold; and
- changes in rules relating to revenue recognition or in interpretations of
those rules.
Due to fluctuations from quarter to quarter, our operating results may not
meet the expectations of securities analysts or investors, as was the case for
the quarter ended August 31, 2001. If this occurs, the price of our common stock
could suffer further significant declines.
VARIATIONS IN THE TIME IT TAKES US TO LICENSE OUR SOFTWARE MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS.
The time it takes to license our software to prospective clients varies
substantially, but typically has ranged historically between four and twelve
months. Variations in the length of our sales cycles could cause our revenue to
fluctuate widely from period to period. Because we typically recognize a
substantial portion of our software revenue in the last month of a quarter, any
delay in the license of our products could cause significant variations in our
revenue from quarter to quarter. These delays have occurred on a number of
occasions in the past, including, most recently, in our quarters ended August
31, 2001 and November 30, 2001. Furthermore, these fluctuations could cause our
operating results to suffer in some future periods because our operating
expenses are relatively fixed over the short term and we devote significant time
and resources to prospective clients. The length of our sales cycle depends on a
number of factors, including the following:
- the complexities of the SRM, SCM, PRO and S&PM problems our solutions
address;
- the breadth of the solution required by the client, including the
technical, organizational and geographic scope of the license;
- the evaluation and approval processes employed by the clients and
prospects;
- the sales channel through which the solution is sold;
- the economic conditions in the United States and abroad;
- increased economic uncertainty and political instability world-wide
following the terrorist attacks which began in the United States on
September 11, 2001; and
- any other delays arising from factors beyond our control.
THE SIZE AND SCOPE OF OUR LARGEST CONTRACTS WITH CLIENTS HAVE INCREASED, WHICH
MAY CAUSE FLUCTUATIONS IN OUR OPERATING RESULTS.
Our clients and prospective clients are seeking to solve increasingly
complex SRM, SCM, PRO and S&PM problems. Further, we are focused on providing
more comprehensive solutions for our clients, as opposed to only licensing
software. As the complexities of the problems our clients seek to solve
increases, the size and scope of our contracts with clients increase, as
evidenced by the increase in the number of software transactions of $5.0 million
or greater in fiscal 2002 and 2001. We recorded six software transactions of
$5.0 million or greater in fiscal 2002 as compared
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to three and zero software transactions of $5.0 million or greater in fiscal
2001 and 2000, respectively. As a result, our operating results could fluctuate
due to the following factors:
- the complexities of the contracting processes of our clients and
prospects;
- contractual terms may vary widely, which may result in differing methods
of accounting for revenue from each contract;
- the sales cycles related to larger contracts may be longer and subject to
greater delays; and
- losses of, or delays in, concluding larger contracts could have a
proportionately greater effect on our revenue for a particular period.
Any of these factors could cause our revenue to decline or fluctuate
significantly in any quarter and could cause a decline in our stock price.
A PORTION OF OUR REVENUE IS DERIVED FROM SOLUTION SUPPORT CONTRACTS. A REDUCTION
IN THE RENEWAL RATE OF ANNUAL SUPPORT CONTRACTS COULD MATERIALLY HARM OUR
BUSINESS.
Our support revenue includes post-contract support and the rights to
unspecified software upgrades and enhancements. Support revenue as a percentage
of total revenue was 23.8%, 20.6% and 29.8% in fiscal 2002, 2001 and 2000,
respectively. Support contracts are generally renewable annually at the option
of our customers. In the past, we have experienced high rates of renewed annual
support contracts from our customers. If our customers fail to renew their
maintenance agreements at historical rates, our support revenues could
materially decline and could cause a decline in our stock price.
WE HAVE EXPERIENCED DIFFICULTIES INTEGRATING ACQUISITIONS IN THE PAST AND MAY
EXPERIENCE PROBLEMS WITH FUTURE ACQUISITIONS THAT COULD MATERIALLY HARM OUR
BUSINESS.
Acquisitions involve the integration of companies that have previously
operated independently. In connection with any acquisition, there can be no
assurance that we will:
- effectively integrate employees, operations, products and systems;
- realize the expected benefits of the transaction;
- retain key employees;
- effectively develop and protect key technologies and proprietary
know-how;
- avoid conflicts with our clients and business partners that have
commercial relationships or compete with the acquired company;
- avoid unanticipated operational difficulties or expenditures or both; and
- effectively operate our existing business lines, given the significant
diversion of resources and management attention required to successfully
integrate acquisitions.
In addition, future acquisitions may result in a dilution to existing
shareholders and to earnings per share to the extent we issue shares of our
common stock as consideration. This could negatively affect our stock price.
WE DEPEND ON SALES OF OUR SRM, SCM, PRO AND S&PM SOLUTIONS, AND OUR BUSINESS
WILL BE MATERIALLY AND ADVERSELY AFFECTED IF THE MARKET FOR OUR PRODUCTS DOES
NOT CONTINUE TO GROW.
Substantially all of our software, service and support revenue have arisen
from, or are related directly to, our SRM, SCM, PRO and S&PM solutions. We
expect to continue to be dependent upon these solutions in the future, and any
factor adversely affecting the solutions or the markets for SRM, SCM, PRO and
S&PM solutions, in general, would materially and adversely affect our ability to
generate revenue. While we believe the markets for SRM, SCM, PRO and S&PM
solutions will continue to expand, they may grow more slowly than in the past.
If the markets for our solutions
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do not grow as rapidly as we expect, revenue growth, operating margins, or both,
could be adversely affected.
COMPANIES ARE RE-EVALUATING THEIR SUPPLIER AND CLIENT RELATIONSHIPS AND SOME ARE
ADJUSTING THEIR SERVICE LEVELS AND OTHER SUPPLY CHAIN MANAGEMENT SETTINGS AND
LEVELS IN A MANNER THAT MAY HAVE AN ADVERSE AFFECT ON OUR ABILITY TO SELL OUR
SRM, SCM, PRO AND S&PM SOLUTIONS.
Since September 11, 2001, companies are re-evaluating the nature of their
relationships with suppliers and clients. Some are adjusting their service
levels and other supply chain management settings and levels to address risks
arising out of the terrorists attacks and the resulting increased economic and
political uncertainties in ways that may adversely affect the benefits
historically achieved through use of our solutions, which could have a material
adverse affect on our ability to market and sell our SRM, SCM, PRO and S&PM
solutions.
OUR MARKETS ARE VERY COMPETITIVE, AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY.
The markets for our solutions are very competitive. The intensity of
competition in our markets has significantly increased, and we expect it to
increase in the future. Our current and potential competitors may make
acquisitions of other competitors and may establish cooperative relationships
among themselves or with third parties. Some competitors are offering enterprise
application software that compete with our applications at no charge as
components of bundled products. Further, our current or prospective clients and
partners may become competitors in the future. Increased competition could
result in price reductions, lower gross margins, longer sales cycles and the
loss of market share. Each of these developments could materially and adversely
affect our growth and operating performance.
MANY OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY GREATER
RESOURCES THAN WE DO, AND THEREFORE, WE MAY BE AT A DISADVANTAGE IN COMPETING
WITH THEM.
We directly compete with other application software vendors including:
Adexa, Inc., Aspen Technology, Inc., The Descartes Systems Group, Inc., Global
Logistics Technologies, Inc., i2 Technologies, Inc., JDA Software, Inc.
Khimetrics, Logility, Inc., Logisitics.com, Mercia, Metreo, PROS Revenue
Management, Retek, Inc., Sabre, Inc., SAP AG, SynQuest and YieldStar Technology.
In addition, some ERP companies such as Invensys plc (which acquired Baan
Company N.V.), J.D. Edwards & Company, Oracle Corporation, PeopleSoft, Inc. and
SAP AG have acquired or developed and are developing SCM, SRM, PRO and S&PM
solutions. Some of our current and potential competitors, particularly the ERP
vendors, have significantly greater financial, marketing, technical and other
competitive resources than us, as well as greater name recognition and a larger
installed base of clients. In addition, many of our competitors have
well-established relationships with our current and potential clients and have
extensive knowledge of our industry. Some of our competitors are offering
enterprise application software at no charge as components of bundled products.
As a result, they may be able to adapt more quickly to new or emerging
technologies and changes in client requirements or to devote greater resources
to the development, promotion and sale of their products than we can. Any of
these factors could materially impair our ability to compete and adversely
affect our revenue growth and operating performance.
IF THE DEVELOPMENT OF OUR PRODUCTS AND SERVICES FAILS TO KEEP PACE WITH OUR
INDUSTRY'S RAPIDLY EVOLVING TECHNOLOGY, OUR FUTURE RESULTS MAY BE MATERIALLY AND
ADVERSELY AFFECTED.
The markets for SRM, SCM, PRO and S&PM solutions are subject to rapid
technological change, changing client needs, frequent new product introductions
and evolving industry standards that may render existing products and services
obsolete. Our growth and future operating
9
results will depend, in part, upon our ability to enhance existing applications
and develop and introduce new applications or capabilities that:
- meet or exceed technological advances in the marketplace;
- meet changing client requirements;
- comply with changing industry standards;
- achieve market acceptance;
- integrate third-party software effectively; and
- respond to competitive offerings.
Our product development and testing efforts have required, and are expected
to continue to require, substantial investments. We may not possess sufficient
resources to continue to make the necessary investments in technology. In
addition, we may not successfully identify new software opportunities or develop
and bring new software to market in a timely and efficient manner. If we are
unable, for technological or other reasons, to develop and introduce new and
enhanced software in a timely manner, we may lose existing clients and fail to
attract new clients, which may adversely affect our performance.
DEFECTS IN OUR SOFTWARE OR PROBLEMS IN THE IMPLEMENTATION OF OUR SOFTWARE COULD
LEAD TO CLAIMS FOR DAMAGES BY OUR CLIENTS, LOSS OF REVENUE OR DELAYS IN THE
MARKET ACCEPTANCE OF OUR SOLUTIONS.
Our software is complex and is frequently integrated with a wide variety of
third-party software. This integration process can be complex, time consuming
and expensive and may cause delays in the development of our products. As a
result, some customers may have difficulty or be unable to implement our
products successfully or otherwise achieve the benefits attributable to our
products. We may license software that contains undetected errors or failures
when new software is first introduced or as new versions are released. We may
not discover errors in our software until our customers install and use a given
product or until the volume of services that a product provides increases. These
problems may result in claims for damages suffered by our clients, a loss of, or
delays in, the market acceptance of our solutions, client dissatisfaction and
potentially lost revenue and collection difficulties during the period required
to correct these errors.
WE ARE DEPENDENT ON THIRD-PARTY SOFTWARE THAT WE INCORPORATE INTO AND INCLUDE
WITH OUR PRODUCTS AND SOLUTIONS, AND IMPAIRED RELATIONS WITH THESE THIRD
PARTIES, DEFECTS IN THIRD-PARTY SOFTWARE OR THE INABILITY TO ENHANCE THEIR
SOFTWARE OVER TIME COULD HARM OUR BUSINESS.
We incorporate and include third-party software into and with our products
and solutions. We are likely to incorporate and include additional third-party
software into and with our products and solutions as we expand our product
offerings. The operation of our products would be impaired if errors occur in
the third-party software that we utilize. It may be more difficult for us to
correct any defects in third-party software because the software is not within
our control. Accordingly, our business could be adversely affected in the event
of any errors in this software. There can be no assurance that these third
parties will continue to invest the appropriate levels of resources in their
products and services to maintain and enhance the software capabilities.
Furthermore, it may be difficult for us to replace any third-party software
if a vendor seeks to terminate our license to the software or ability to license
the software to others. Any impairment in our relationship with these third
parties could adversely impact our business, results of operations and financial
condition.
10
WE ARE SUBSTANTIALLY DEPENDENT ON THIRD PARTIES TO INTEGRATE OUR SOFTWARE WITH
OTHER SOFTWARE PRODUCTS AND PLATFORMS. IF ANY COMPANY THAT WE USE TO INTEGRATE
OUR SOFTWARE PRODUCTS SHOULD CEASE TO PROVIDE INTEGRATION SERVICES TO US, OUR
BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE MATERIALLY
ADVERSELY AFFECTED.
We depend on companies such as Acta Technology, Inc., Peregrine Systems,
Inc., Vignette Corporation, and webMethods, Inc. to integrate our software with
software and platforms developed by third parties. If these companies are unable
to develop or maintain software that effectively integrates our software and is
free from errors, our ability to license our products and provide solutions
could be impaired. Further, we rely on these companies to maintain relationships
with the companies that provide the external software that is vital to the
functioning of our products and solutions. The loss of any company that we use
to integrate our software products could adversely affect our business, results
of operations and financial condition.
OUR EFFORTS TO DEVELOP RELATIONSHIPS WITH VENDORS SUCH AS SOFTWARE COMPANIES,
CONSULTING FIRMS, RESELLERS AND OTHERS TO IMPLEMENT AND PROMOTE OUR SOFTWARE
PRODUCTS MAY FAIL, WHICH COULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS.
We are developing, maintaining and enhancing significant working
relationships with complementary vendors, such as software companies, consulting
firms, resellers and others that we believe can play important roles in
marketing our products and solutions. We are currently investing, and intend to
continue to invest, significant resources to develop and enhance these
relationships, which could adversely affect our operating margins. We may be
unable to develop relationships with organizations that will be able to market
our products effectively. Our arrangements with these organizations are not
exclusive and, in many cases, may be terminated by either party without cause.
Many of the organizations with which we are developing or maintaining marketing
relationships have commercial relationships with our competitors. Therefore,
there can be no assurance that any organization will continue its involvement
with us and our products. The loss of relationships with important organizations
could materially and adversely affect our business, results of operations and
financial condition.
WE HAVE ONLY RECENTLY ENTERED INTO CONTRACTS WITH GOVERNMENTAL AGENCIES. THESE
CONTRACTS OFTEN INVOLVE LONG PURCHASE CYCLES AND COMPETITIVE PROCUREMENT
PROCESSES. IF WE FAIL TO MANAGE THESE CYCLES TO TIMELY CONCLUSIONS, THEY COULD
HAVE A MATERIAL ADVERSE AFFECT ON OUR FINANCIAL PERFORMANCE.
We have recently begun providing our solutions to government agencies and
expect that a significant portion of our future revenue may be derived from
government agency clients. Our acquisition of WDS in April 2002 will increase
the amount of revenue and customer relationships derived from government
agencies. Obtaining government contracts may involve long purchase cycles,
competitive bidding, qualification requirements, congressional appropriations,
delays in funding, budgetary constraints and extensive specification development
and price negotiations. In order to facilitate the sales of our commercial
software and services to the federal government we hold a Government Services
Administration Federal Supply Services Schedule for Information Technology (IT)
and Management Organizational and Business Improvement Services (MOBIS). Each
government agency maintains its own rules and regulations with which we must
comply and which can vary significantly among agencies. Government agencies also
often retain a significant portion of fees payable upon completion of a project
and collection of such fees may be delayed for several months. Accordingly, our
revenue could decline as a result of these government procurement processes.
Government agencies also may require us to reimburse the Government for the
difference in prices they paid for our products if we subsequently sell the same
products at discounts to other customers. In addition, it is possible that, in
the future, some of our government contracts may be fixed price contracts which
may prevent us from recovering costs incurred in excess of our budgeted costs.
Fixed price contracts may require us to estimate the total project cost based on
preliminary projections of the project's requirements. The financial viability
of any
11
given project depends in large part on our ability to estimate such costs
accurately and to complete the project on a timely basis. In the event our
actual costs exceed the fixed contract cost, we will not be able to recover the
excess costs. If we fail to properly anticipate costs on fixed price contracts,
our profit margins will decrease. Some government contracts are also subject to
termination or re-negotiation at the convenience of the government, which could
result in a large decline in revenue in any given quarter. Multi-year contracts
are contingent on overall budget approval by Congress and may be terminated due
to lack of funds.
INCREASED SALES THROUGH INDIRECT CHANNELS MAY ADVERSELY AFFECT OUR OPERATING
PERFORMANCE.
Even if our marketing efforts through indirect channels are successful and
result in increased sales, our average selling prices and operating margins
could be adversely affected because of the lower unit prices that we receive
when selling through indirect channels.
IF WE FAIL TO FIELD AN EFFECTIVE SALES ORGANIZATION, OUR ABILITY TO GROW WILL BE
LIMITED, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
We have recently reduced our sales force as a result of global economic
uncertainties and political instability. In order to grow our revenue, our
existing sales force will have to be more productive and we will have to expand
our sales force in future periods. Our past efforts to expand our sales
organization have required significant resources. New sales personnel require
training and may take a long time to achieve full productivity. There is no
assurance that we can attract and retain qualified sales people at levels
sufficient to support our growth. Any failure to adequately sell our products
could limit our growth and adversely affect our financial performance.
THE LIMITED ABILITY OF LEGAL PROTECTIONS TO SAFEGUARD OUR INTELLECTUAL PROPERTY
RIGHTS COULD IMPAIR OUR ABILITY TO COMPETE EFFECTIVELY.
Our success and ability to compete are substantially dependent on our
internally developed technologies and trademarks, which we protect through a
combination of confidentiality procedures, contractual provisions, patent,
copyright, trademark and trade secret laws. Despite our efforts to protect our
proprietary rights, unauthorized parties may copy aspects of our products or
obtain and use information that we regard as proprietary. Policing unauthorized
use of our products is difficult and, although we are unable to determine the
extent to which piracy of our software products exists, we expect software
piracy to be a problem. In addition, the laws of some foreign countries do not
protect our proprietary rights to the same extent as the laws of the United
States. Furthermore, our competitors may independently develop technology
similar to ours.
OUR PRODUCTS MAY INFRINGE UPON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, WHICH
MAY CAUSE US TO INCUR UNEXPECTED COSTS OR PREVENT US FROM SELLING OUR PRODUCTS.
The number of intellectual property claims in our industry may increase as
the number of competing products grows and the functionality of products in
different industry segments overlaps. In recent years, there has been a tendency
by software companies to file substantially increasing numbers of patent
applications, including those for business methods and processes. We have no way
of knowing what patent applications third parties have filed until the
application is filed or until a patent is issued. Patent applications are often
published within 18 months of filing but it can take as long as three years or
more for a patent to be granted after an application has been filed. Although we
are not aware that any of our products infringe upon the proprietary rights of
third parties, there can be no assurance that third parties will not claim
infringement by us with respect to current or future products. Any of these
claims, with or without merit, could be time-consuming to address, result in
costly litigation, cause product shipment delays or require us to enter into
royalty or license agreements. These royalty or license agreements might not be
available on terms acceptable to us or at all, which could materially and
adversely affect our business.
12
OUR INTERNATIONAL OPERATIONS POSE RISKS FOR OUR BUSINESS AND FINANCIAL
CONDITION.
We currently conduct operations in a number of countries around the world.
These operations require significant management attention and financial
resources and subject us to risks inherent in doing business internationally,
such as:
- regulatory requirements;
- difficulties in staffing and managing foreign operations;
- longer collection cycles;
- foreign currency risk;
- legal uncertainties regarding liability, ownership and protection of
intellectual property;
- tariffs and other trade barriers;
- seasonal reductions in business activities;
- potentially adverse tax consequences; and
- increased economic uncertainty and political instability following the
terrorist attacks in the United States on September 11, 2001.
Any of the above factors could adversely affect the success of our
international operations. One or more of these factors could have a material
adverse effect on our business and operating results.
CHANGES IN THE VALUE OF THE U.S. DOLLAR, AS COMPARED TO THE CURRENCIES OF
FOREIGN COUNTRIES WHERE WE TRANSACT BUSINESS, COULD HARM OUR OPERATING RESULTS.
In fiscal 2002, 28.3% of our total revenue was derived from outside the
United States. Our international revenue and expenses are denominated in foreign
currencies, typically the local currency of the selling business unit.
Therefore, changes in the value of the U.S. Dollar as compared to these other
currencies may adversely affect our operating results. As our international
operations expand, we expect to use an increasing number of foreign currencies,
causing our exposure to currency exchange rate fluctuations to increase. We
generally do not implement hedging programs to mitigate our exposure to currency
fluctuations affecting international accounts receivable, cash balances and
intercompany accounts, and we do not hedge our exposure to currency fluctuations
affecting future international revenues and expenses and other commitments. For
the foregoing reasons, currency exchange rate fluctuations have caused, and
likely will continue to cause, variability in our foreign currency denominated
revenue streams and our cost to settle foreign currency denominated liabilities,
which could have a material adverse effect on our business and operating
results.
IF WE LOSE OUR KEY PERSONNEL, THE SUCCESS AND GROWTH OF OUR BUSINESS MAY SUFFER.
Our success depends significantly on the continued service of our executive
officers. We do not have fixed-term employment agreements with any of our
executive officers, and we do not maintain key person life insurance on our
executive officers. The loss of services of any of our executive officers for
any reason could have a material adverse effect on our business, operating
results, financial condition and cash flows.
THE FAILURE TO HIRE AND RETAIN QUALIFIED PERSONNEL WOULD HARM OUR BUSINESS.
We believe that our success also will depend significantly on our ability
to attract, integrate, motivate and retain highly skilled technical, managerial,
sales, marketing and services personnel. Competition for skilled personnel is
intense, and there can be no assurance that we will be successful in attracting,
motivating and retaining the personnel required to grow and operate profitably.
In addition, the cost of hiring and retaining skilled employees is high, and
this reduces our profitability. Failure to attract and retain highly skilled
personnel could materially and adversely affect our business. An important
component of our employee compensation is stock options. A
13
decline in our stock price could adversely affect our ability to attract and
retain employees, as it has in the past.
EXPENSES ARISING FROM OUR PRIOR STOCK OPTION REPRICING MAY HAVE A MATERIAL
ADVERSE IMPACT ON FUTURE PERFORMANCE.
In response to the poor performance of our stock price between May 1998 and
January 1999, the prior executive management team offered to reprice employee
stock options, other than those held by our executive officers or directors,
effective January 29, 1999, to bolster employee retention. As a result of our
offer, options to acquire approximately 3.0 million shares were repriced, of
which options to purchase a total of approximately 1.0 million shares are
currently outstanding as of February 28, 2002. In addition, the four-year
vesting period of the repriced options started over. The recently adopted FASB
Interpretation No. 44 of Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," requires us to record compensation expense or
benefit associated with the change in the market price of these options. The
changes in our common stock market price since the FASB-mandated measurement
date of July 1, 2000 resulted in a non-cash stock benefit of $8.0 million during
fiscal 2002 and an expense of $11.1 million being recorded in fiscal 2001. In
each future quarter, we will record the additional expense or benefit related to
the repriced stock options still outstanding, to the extent that our stock price
is greater than $22.19, based on the change in our common stock price as
compared to the measurement date. As a result, the repricing may continue to
have a material adverse impact on reported financial results and could therefore
negatively affect our stock price.
WE MAY BE SUBJECT TO FUTURE LIABILITY CLAIMS, AND OUR COMPANY'S AND PRODUCTS'
REPUTATION MAY SUFFER.
Many of our implementations involve projects that are critical to the
operations of our clients' businesses and provide benefits that may be difficult
to quantify. Any failure in a client's system could result in a claim for
substantial damages against us, regardless of our responsibility for the
failure. We have entered into and plan to continue to enter into agreements with
software vendors, consulting firms, resellers and others whereby they market our
solutions. If these vendors fail to meet their clients' expectations or cause
failures in their clients' systems, the reputation of our company and products
could be materially and adversely affected even if our software products perform
in accordance with their functional specifications.
RISKS RELATED TO OUR INDUSTRY
LACK OF GROWTH OR DECLINE IN INTERNET USAGE COULD BE DETRIMENTAL TO OUR FUTURE
OPERATING RESULTS.
The growth of the Internet has increased demand for EPO, SRM, SCM, PRO and
S&PM solutions, as well as created markets for new and enhanced product
offerings. Therefore, our future sales and profits are substantially dependent
upon the Internet as a viable commercial medium. The continued success of the
Internet as a viable commercial medium may be adversely affected for a number of
reasons, including:
- potentially inadequate development of network infrastructure or delayed
development of enabling technologies and performance improvements;
- delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity;
- concerns that may develop among businesses and consumers about
accessibility, security, reliability, cost, ease of use and quality of
service;
- increased taxation and governmental regulation; or
- changes in, or insufficient availability of, communications services to
support the Internet, resulting in slower Internet user response times.
14
The occurrence of any of these factors could require us to modify our
technology and our business strategy. Any such modifications could require us to
expend significant amounts of resources. In the event that the Internet does not
remain a viable commercial medium, our business, financial condition and results
of operations could be materially and adversely affected.
NEW LAWS OR REGULATIONS AFFECTING THE INTERNET OR COMMERCE IN GENERAL COULD
REDUCE OUR REVENUE AND ADVERSELY AFFECT OUR GROWTH.
Congress and other domestic and foreign governmental authorities have
adopted and are considering legislation affecting the use of the Internet,
including laws relating to the use of the Internet for commerce and
distribution. The adoption or interpretation of laws regulating the Internet, or
of existing laws governing such things as consumer protection, libel, property
rights and personal privacy, could hamper the growth of the Internet and its use
as a communications and commercial medium. If this occurs, companies may decide
not to use our products or services, and our business, operating results and
financial condition could suffer.
RISKS RELATED TO OUR INDEBTEDNESS
OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
In November 2000, we completed a convertible debt offering of $250.0
million in 5% subordinated convertible notes that are due November 2007. Our
indebtedness could have important consequences for investors. For example, it
could:
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to obtain additional financing;
- require the dedication of a substantial portion of our cash flows from
operations to the payment of principal of, and interest on, our
indebtedness, thereby reducing the availability of capital to fund our
growth strategy, working capital, capital expenditures, acquisitions and
other general corporate purposes;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry; and
- place us at a competitive disadvantage relative to our competitors with
less debt.
Although we have no present plans to do so, we may incur substantial
additional debt in the future. Neither the terms of our credit facility nor the
terms of the Notes fully prohibit us from doing so. If a significant amount of
new debt is added to our current levels, the related risks described above could
intensify.
WE MAY HAVE INSUFFICIENT CASH FLOW TO MEET OUR DEBT SERVICE OBLIGATIONS.
We will be required to generate cash sufficient to pay all amounts due on
the Notes and to conduct our business operations. We have net losses, and we may
not be able to cover our anticipated debt service obligations. This may
materially hinder our ability to make principal and interest payments on the
Notes. Our ability to meet our future debt service obligations will be dependent
upon our future performance, which will be subject to financial, business and
other factors affecting our operations, many of which are beyond our control.
15
RISKS RELATED TO OUR COMMON STOCK
OUR STOCK PRICE HAS BEEN AND IS LIKELY TO CONTINUE TO BE VOLATILE.
The trading price of our common stock has been and is likely to be highly
volatile. Our stock price could be subject to wide fluctuations in response to a
variety of factors, including the following:
- actual or anticipated variations in quarterly operating results;
- weakening economic conditions;
- increased economic and political uncertainty following the terrorist
attacks in the United States on September 11, 2001;
- announcements of technological innovations;
- new products or services offered by us or our competitors;
- changes in financial estimates by securities analysts;
- conditions or trends in the market for EPO, SRM, SCM, PRO and S&PM
solutions;
- changes in the performance and/or market valuations of our current and
potential competitors and the software industry in general;
- our announcement of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;
- adoption of industry standards and the inclusion of our technology in, or
compatibility of our technology with, such standards;
- adverse or unfavorable publicity regarding us or our products;
- adverse or unfavorable publicity regarding our competitors, including
their products and implementation efforts;
- additions or departures of key personnel;
- our sales or anticipated sales of additional equity securities; and
- other events or factors that may be beyond our control.
In addition, the stock markets in general, The Nasdaq National Market and
the equity markets for software companies in particular, have recently
experienced extraordinary price and volume volatility in recent years. Such
volatility has adversely affected the stock prices for many companies
irrespective of or disproportionately to the operating performance of these
companies. These broad market and industry factors may materially and adversely
further affect the market price of our common stock, regardless of our actual
operating performance.
SCHEDULED SALES OF SIGNIFICANT AMOUNTS OF OUR COMMON STOCK BY OUR EXECUTIVE
OFFICERS MAY CAUSE OUR STOCK PRICE TO DECLINE.
Certain of our executive officers have entered into pre-established trading
plans pursuant to which they sold a total of approximately 515,000 shares of our
common stock in January 2001, approximately 253,000 shares in April 2001,
approximately 318,000 shares in the three months ended August 31, 2001.
Commencing in September 2001, some of these executive officers terminated their
trading plans. Approximately 24,000 shares were sold under the remaining plans
in the three months ended February 28, 2002. Our executive officers who
presently maintain trading plans are scheduled to sell shares in future
quarters, subject to the terms of their trading plans, which terms include price
floors below which no shares or a reduced amount of shares will be sold. The
quarterly sales will continue until the trading plans are modified or
terminated. Certain of our other executive officers and directors may establish
similar plans to sell shares on a quarterly basis. The sale of these shares may
cause the market price of our stock to decline.
16
OUR CHARTER AND BYLAWS AND DELAWARE LAW CONTAIN PROVISIONS THAT COULD DISCOURAGE
A TAKEOVER EVEN IF BENEFICIAL TO STOCKHOLDERS.
Our charter and our bylaws, in conjunction with Delaware law, contain
provisions that could make it more difficult for a third party to obtain control
of us even if doing so would be beneficial to stockholders. For example, our
bylaws provide for a classified board of directors and allow our board of
directors to expand its size and fill any vacancies without stockholder
approval. Furthermore, our board has the authority to issue preferred stock and
to designate the voting rights, dividend rate and privileges of the preferred
stock all of which may be greater than the rights of common stockholders.
USE OF PROCEEDS
We will not receive any proceeds from any resale by WDS of our common
stock, except possibly under very limited circumstances which might arise in
connection with the settlement of any claims which we may make against an escrow
account established in connection with the acquisition. A total of up to
approximately shares of our common stock, constituting 15% of the
shares which we will issue in the acquisition, will be placed into the escrow
account. WDS has the right, at its sole discretion, to cause the escrow agent
holding the shares to sell all or a portion of the shares held in escrow. If any
of these shares were so sold, the net proceeds of the sale or sales would be
placed in the escrow account. If WDS sells all or a portion of the shares in the
escrow account and we assert a claim against the escrow account and are
successful in such claim, we could receive cash out of the escrow fund that WDS
has substituted for our common stock.
PRICE RANGE OF COMMON STOCK
Our common stock trades on The Nasdaq National Market under the symbol
"MANU." The following table sets forth, for the periods indicated, the high and
low sales prices per share for our common stock, as reported on The Nasdaq
National Market for the periods indicated.
HIGH LOW
------- -------
FISCAL YEAR 2001
First Quarter............................................. $ 35.13 $ 12.53
Second Quarter............................................ 46.66 11.25
Third Quarter............................................. 66.06 30.88
Fourth Quarter............................................ 64.38 26.94
FISCAL YEAR 2002
First Quarter............................................. $ 41.90 $ 15.38
Second Quarter............................................ 42.38 11.65
Third Quarter............................................. 13.70 4.94
Fourth Quarter............................................ 22.70 11.07
FISCAL YEAR 2003
First Quarter (March 1, 2002 through May 28, 2002)........ $ 22.75 $ 8.13
On May 28, 2002, the last reported sale price of our common stock as
reported on The Nasdaq National Market was $9.31 per share. On May 24, 2002,
there were approximately 322 holders of record of our common stock.
DIVIDEND POLICY
We have never paid any cash dividends on our capital stock. We currently
anticipate that we will retain earnings to support our operations and to finance
the growth and development of our business, and we do not anticipate paying any
cash dividends for the foreseeable future. We have an unsecured committed
revolving credit facility with a commercial bank that will expire on
17
February 28, 2003, unless it is renewed. Under the terms of the credit facility,
we are prohibited from declaring or paying cash dividends on our common stock.
SELLING STOCKHOLDER
This Prospectus is to be used in connection with the sale by the selling
stockholder of shares of our common stock. We will issue the shares to be sold
under this Prospectus to WDS in connection with our acquisition on April 26,
2002 of substantially all of the assets of WDS. We will issue these shares in
transactions exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) of the Securities Act.
The following table sets forth certain information regarding the beneficial
ownership of shares of common stock by the selling stockholder as of June ,
2002; the selling stockholder owned less than percent of the shares of our
common stock then outstanding. As described in Note 1 of "Summary -- The
Offering", we may issue additional shares to WDS after the date of this
Prospectus and some of the shares covered by this Prospectus may be returned to
us by WDS. We have assumed that all of the shares being offered by this
Prospectus will be sold; however, the selling stockholder has the right to
reduce the number of shares offered for sale or to otherwise decline to sell any
or all of the shares registered hereunder.
To the best of our knowledge, the selling stockholder has not held any
office or maintained any material relationship with us or any of our affiliates
over the past three years, with the exception of its contractual relationship
with Manugistics, Inc. under a series of agreements dated as of April 19, 2002.
NUMBER OF SHARES
NAME OF SELLING OWNED AND
STOCKHOLDER OFFERED
--------------- ----------------
Western Data Systems of Nevada, Inc. ....................... 2,420,513(1)
---------------
(1) Estimated based upon $23,600,000 divided by the average of the high and low
sale prices of our common stock on May 28, 2002. The number of shares to be
initially issued to WDS will be determined by dividing $23,600,000 by the
average of the closing prices of our common stock for the two consecutive
trading days ending on the second trading day prior to the effective date of
the registration statement of which this prospectus is a part. See Note 1
under "Summary -- The Offering".
PLAN OF DISTRIBUTION
We will issue the Shares to WDS pursuant to our acquisition of
substantially all of the assets of WDS. We have agreed to register the shares of
the selling stockholder for resale under the Securities Act at our expense. We
have agreed to keep the registration statement, of which this Prospectus is a
part, effective at least until the first to occur of (i) the sale of all of the
shares pursuant to the registration statement; or (ii) one year from the
effective date of the registration statement. We further agreed to deliver the
Shares to WDS promptly after the SEC had declared the registration statement
effective.
All of the Shares to be initially issued in connection with our acquisition
are covered by this Prospectus. As described in Note 1 in "Summary -- The
Offering", we may issue additional shares after the date of this Prospectus and
if any additional shares are issued we will file another registration statement
for the resale of any such shares. The Shares covered by the registration
statement, of which this Prospectus is a part, are eligible to be resold upon
the effectiveness of the registration statement. WDS has informed the Company
that, subject to market conditions and other factors, it presently intends to
sell the Shares to be issued to it under this Prospectus. However, WDS may
determine not to resell all or any portion of the Shares.
18
The selling stockholder may sell or otherwise transfer the Shares pursuant
to this Prospectus, in accordance with the provisions of Rule 144 under the
Securities Act or in transactions otherwise exempt from registration under the
Securities Act.
The common stock is presently listed for trading on The Nasdaq National
Market. Any resale of the Shares covered by this Prospectus will not be
underwritten. The selling stockholder may resell the Shares covered by this
Prospectus from time to time in ordinary brokers' transactions through the
facilities of Nasdaq, in block transactions, in privately negotiated
transactions, or otherwise. Sales of Shares may be effected at market prices
prevailing at the time of sale, at negotiated prices, or otherwise. There will
be no charges or commissions paid to us by WDS in connection with the issuance
of the Shares. It is anticipated that usual and customary brokerage fees will be
paid by WDS upon sale of the common stock offered under this Prospectus. In
connection with any sales, the selling stockholder and any brokers participating
in such sales may be deemed to be underwriters within the meaning of the
Securities Act, in which event commissions received by such brokers may be
deemed underwriting commissions under the Securities Act.
WDS has agreed that it will not take, directly or indirectly, any action
designed to cause or result in, or which has constituted or might reasonably be
expected to constitute, the manipulation or stabilization of the price of our
common stock or of any of our other securities. In particular, Regulation M
under the Securities Act imposes certain restrictions on issuers, selling
stockholders and other participants in a distribution of securities that are
intended to prohibit such persons from facilitating the distribution by
"conditioning" the market for such securities.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 300,000,000 shares of common
stock, par value $0.002 per share, and 4,620,253 shares of preferred stock, par
value $0.01 per share.
COMMON STOCK
As of May 24, 2002, there were 69,589,201 shares of our common stock which
were held of record by approximately 322 holders.
The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of our stockholders. Holders
of our common stock do not have the right to cumulate their votes. Directors are
elected by a plurality of votes cast; except as otherwise provided under the
Delaware General Corporation Law, all other matters are approved by a majority
of the votes cast.
Subject to preferences that may be applicable to any outstanding shares of
our preferred stock, the holders of our common stock are entitled to receive
ratably such dividends as may be declared by our board of directors out of funds
legally available therefor. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of our company, holders of our common
stock are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preferences of any outstanding shares of our
preferred stock. Holders of our common stock have no preemptive rights and no
right to convert our common stock into any other securities. There are no
redemption or sinking fund provisions applicable to our common stock. All
outstanding shares of our common stock are fully paid and non-assessable.
PREFERRED STOCK
We may, by resolution of our board of directors, and without any further
vote or action by our stockholders, authorize and issue, subject to certain
limitations prescribed by law, up to an aggregate of 4,620,253 shares of
preferred stock. The preferred stock may be issued in one or more classes or
series of shares of any class or series. With respect to any classes or series,
our board of directors may determine the designation and the number of shares,
preferences, limitations and special rights, including dividend rights,
conversion rights, voting rights, redemption
19
rights and liquidation preferences. Because of the rights that may be granted,
the issuance of preferred stock may delay, defer or prevent a change of control.
No shares of preferred stock are outstanding and we presently have no plans to
issue shares of preferred stock.
LIMITATION ON LIABILITY
Our certificate of incorporation limits or eliminates the liability of our
directors to us or our stockholders for monetary damages to the fullest extent
permitted by the Delaware General Corporation Law. As permitted by the Delaware
General Corporation Law, our certificate of incorporation provides that our
directors shall not be personally liable to us or our stockholders for monetary
damages for a breach of fiduciary duty as a director, except for liability:
- for any breach of such person's duty of loyalty;
- for acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law;
- for the payment of unlawful dividends and certain other actions
prohibited by Delaware corporate law; and
- for any transaction resulting in receipt by such person of an improper
personal benefit.
Our certificate of incorporation also contains provisions indemnifying our
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law. We also have directors' and officers' liability insurance to
provide our directors and officers with insurance coverage for losses arising
from claims based on breaches of duty, negligence, errors and other wrongful
acts.
CERTAIN ANTI-TAKEOVER PROVISIONS
Our by-laws provide for the division of our board of directors into three
classes. Each class must be as nearly equal in number as possible. Additionally,
each class must serve a three-year term. The terms of each class are staggered
so that each term ends in a different year over a three-year period. Any
director not elected by holders of preferred stock may be removed only for cause
and only by the vote of more than 67% of the shares entitled to vote for the
election of directors.
Our certificate of incorporation provides that our board of directors may
establish the rights of, and cause us to issue, substantial amounts of preferred
stock without the need for stockholder approval. Further, our board of directors
may determine the terms, conditions, rights, privileges and preferences of the
preferred stock. Our board is required to exercise its business judgment when
making such determinations. Our board of directors' use of the preferred stock
may inhibit the ability of third parties to acquire Manugistics. Additionally,
our board may use the preferred stock to dilute the common stock of entities
seeking to obtain control of Manugistics. The rights of the holders of common
stock will be subject to, and may be adversely affected by, any preferred stock
that may be issued in the future. Our preferred stock provides desirable
flexibility in connection with possible acquisitions, financings and other
corporate transactions. However, it may have the effect of discouraging,
delaying or preventing a change in control of Manugistics. We have no present
plans to issue any shares of preferred stock. The existence of the foregoing
provisions in our certificate of incorporation and by-laws could make it more
difficult for third parties to acquire or attempt to acquire control of us or
substantial amounts of our common stock.
Section 203 of the Delaware General Corporation Law applies to Manugistics.
Section 203 of the Delaware General Corporation Law generally prohibits certain
"business combinations" between a Delaware corporation and an "interested
stockholder." An "interested stockholder" is generally defined as a person who,
together with any affiliates or associates of such person, beneficially owns, or
within three years did own, directly or indirectly, 15% or more of the
outstanding voting shares of a Delaware corporation. The statute broadly defines
business combinations to include:
- mergers;
- consolidations;
20
- sales or other dispositions of assets having an aggregate value in excess
of 10% of the consolidated assets of the corporation or aggregate market
value of all outstanding stock of the corporation; and
- certain transactions that would increase the "interested stockholder's"
proportionate share ownership in the corporation.
The statute prohibits any such business combination for a period of three
years commencing on the date the "interested stockholder" becomes an "interested
stockholder," unless:
- the business combination is approved by the corporation's board of
directors prior to the date the "interested stockholder" becomes an
"interested stockholder"; or
- the "interested stockholder" acquired at least 85% of the voting stock of
the corporation (other than stock held by directors who are also officers
or by certain employee stock plans) in the transaction in which it
becomes an "interested stockholder" if the business combination is
approved by a majority of the board of directors and by the affirmative
vote of at least two-thirds of the outstanding voting stock that is not
owned by the "interested stockholder."
The Delaware General Corporation Law contains provisions enabling a
corporation to avoid Section 203's restrictions if stockholders holding a
majority of the corporation's voting stock approve an amendment to the
corporation's certificate of incorporation or by-laws to avoid the restrictions.
We have not and do not currently intend to "elect out" of the application of
Section 203 of the Delaware General Corporation Law.
LEGAL MATTERS
Certain legal matters with respect to the validity of the common stock to
be issued under this Prospectus are being passed upon for us by Dilworth Paxson
LLP, Philadelphia, Pennsylvania. Joseph H. Jacovini, Chairman and a member of
Dilworth Paxson LLP, is a member of the board of directors of Manugistics. On
May 28, 2002, Mr. Jacovini was the beneficial owner of 163,000 shares of common
stock (including 2,672 shares of common stock held by his spouse and a total of
94,328 shares of common stock issuable upon exercise of certain options).
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from the Company's Annual
Report on Form 10-K for the period ended February 28, 2002 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The consolidated balance sheets of Talus Solutions, Inc. and its subsidiary
as of December 31, 1999 and 1998, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1999, have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any materials we file with the
SEC at the SEC's public reference room at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the SEC's regional offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 233 Broadway, New York,
NY 10279. You can request copies of these documents by writing to the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the
21
operation of the public reference rooms. Our SEC filings are also available at
the SEC's Internet website at "http://www.sec.gov." In addition, you can read
and copy our SEC filings at the office of the National Association of Securities
Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act:
- Annual Report on Form 10-K for the year ended February 28, 2002;
- Current Report on Form 8-K, filed January 4, 2001;
- Current Report on Form 8-K, filed January 18, 2001;
- The description of our common stock contained in our Registration
Statement on Form 8-A, as amended, including any amendment or report
filed to update the description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
INVESTOR RELATIONS
MANUGISTICS GROUP, INC.
9715 KEY WEST AVENUE
ROCKVILLE, MD 20850
(301) 255-5000
This Prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or provided in
this Prospectus and the Registration Statement. We have authorized no one to
provide you with different information. You should not assume that the
information in this Prospectus is accurate as of any date other than the date on
the front of the document.
We have not authorized any dealer, sales person or other person to give any
information or to make any representations other than those contained in this
Prospectus or any Prospectus Supplement. You must not rely on any unauthorized
information. This Prospectus is not an offer of these securities in any state
where an offer is not permitted. The information in this Prospectus is current
as of May 29, 2002. You should not assume that this Prospectus is accurate as of
any other date.
22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the registration of the common stock. All amounts
are estimated, except the SEC registration fee.
SEC Registration............................................ $ 2,172
Printing Expenses........................................... 10,000
Legal Fees and Expenses..................................... 12,000
Accountants' Fees and Expenses.............................. 20,000
Transfer Agent.............................................. 1,000
Miscellaneous............................................... 1,828
-------
Total..................................................... $47,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We have adopted the provisions of Section 102(b)(7) of the Delaware GCL,
which eliminate or limit the personal liability of a director to us or our
stockholders for monetary damages for breach of fiduciary duty under certain
circumstances. Furthermore, under Section 145 of the Delaware GCL, we shall
indemnify each of our directors and officers against expenses (including
reasonable costs, disbursements and counsel fees) in connection with any
proceeding involving such person by reason of having been an officer or
director, to the extent such person acted in good faith and in a manner
reasonably believed to be in, or not opposed to, our best interest, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. The determination of whether indemnification
is proper under the circumstances, unless made by a court, shall be made by a
majority of a quorum of disinterested members of our Board of Directors, our
independent legal counsel or our stockholders.
Our Certificate of Incorporation states that our directors shall not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director, except that this provision shall not eliminate or
limit a director's liability for any breach of the director's duty of loyalty to
us or our stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, under Section 174 of the
Delaware GCL, or for any transaction from which the director derived an improper
personal benefit.
Our bylaws further provide that we shall indemnify our officers, directors
and employees to the fullest extent permitted by law. The bylaws also permit us
to purchase insurance on behalf of any such person against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not we would have the
power to indemnify such person against such liability under the foregoing
provision of the bylaws. We maintain such insurance.
II-1
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4 Form of Registration Rights Agreement between Manugistics
Group, Inc. and Western Data Systems of Nevada, Inc., dated
as of April 19, 2002.
5* Opinion of Dilworth Paxson LLP.
23.1 Consent of Deloitte & Touche LLP regarding the Consolidated
Financial Statements of Manugistics Group, Inc. and
subsidiaries.
23.2 Consent of KPMG LLP regarding the Consolidated Financial
Statements of Talus Solutions, Inc. and subsidiary.
23.3* Consent of Dilworth Paxson LLP (included in Exhibit 5).
24 Power of Attorney (reference is made to the signature page
of this Registration Statement).
---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes that:
(i) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned Registrant hereby further undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
(2) that, for the purpose of determining liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
II-2
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction, the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rockville, State of Maryland, on the 29th day of May,
2002.
MANUGISTICS GROUP, INC.
By: /s/ GREGORY J. OWENS
------------------------------------
Gregory J. Owens Chief Executive
Officer
POWER OF ATTORNEY
Each of the undersigned officers and directors of Manugistics Group, Inc.
whose signature appears below hereby appoints Gregory J. Owens and Raghavan
Rajaji, jointly and individually, as attorneys-in-fact for the undersigned with
full power of substitution, to execute in his or her name and on behalf of such
person, individually, and in each capacity stated below, this Registration
Statement on Form S-3 and one or more amendments (including post-effective
amendments) to this Registration Statement and any related registration
statement under Rule 462(b) (including, in each case, exhibits hereto and
thereto) as the attorney-in-fact shall deem appropriate, and to file all such
registration statements and any such amendments with the Securities and Exchange
Commission, granting unto said attorneys-in-fact, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or either of them, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ GREGORY J. OWENS Chairman of the Board of Directors May 29, 2002
--------------------------------------------- and Chief Executive Officer
Gregory J. Owens (Principal Executive Officer)
/s/ RAGHAVAN RAJAJI Executive Vice President and Chief May 29, 2002
--------------------------------------------- Financial Officer (Principal
Raghavan Rajaji Financial Officer)
/s/ JEFFREY T. HUDKINS Vice President, Controller and Chief May 29, 2002
--------------------------------------------- Accounting Officer (Principal
Jeffrey T. Hudkins Accounting Officer)
/s/ J. MICHAEL CLINE Director May 29, 2002
---------------------------------------------
J. Michael Cline
/s/ STEVEN A. DENNING Director May 29, 2002
---------------------------------------------
Steven A. Denning
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ESTHER DYSON Director May 29, 2002
---------------------------------------------
Esther Dyson
/s/ LYNN C. FRITZ Director May 29, 2002
---------------------------------------------
Lynn C. Fritz
/s/ JOSEPH H. JACOVINI Director May 29, 2002
---------------------------------------------
Joseph H. Jacovini
/s/ HAU L. LEE Director May 29, 2002
---------------------------------------------
Hau L. Lee
/s/ WILLIAM G. NELSON Director May 29, 2002
---------------------------------------------
William G. Nelson
/s/ THOMAS A. SKELTON Director May 29, 2002
---------------------------------------------
Thomas A. Skelton
II-5
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4 Form of executed Registration Rights Agreement between
Manugistics Group, Inc. and Western Data Systems of Nevada,
Inc., dated as of April 19, 2002.
5* Opinion of Dilworth Paxson LLP.
23.1 Consent of Deloitte & Touche LLP regarding the Consolidated
Financial Statements of Manugistics Group, Inc. and
subsidiaries.
23.2 Consent of KPMG LLP regarding the Consolidated Financial
Statements of Talus Solutions, Inc. and subsidiary.
23.3* Consent of Dilworth Paxson LLP (included in Exhibit 5).
24 Power of Attorney (reference is made to the signature page
of this Registration Statement).
---------------
* To be filed by amendment.
II-6