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Filed Pursuant to Rule 424(b)3
Registration Statement #333-55010
[MANUGISTICS LOGO]
279,822 SHARES
COMMON STOCK
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We issued shares of our common stock, $.002 par value per share, to certain
of the former stockholders or employees of STG Holdings Inc., a Delaware
corporation (STG), in connection with our acquisition of STG. The number of
shares of common stock issued was determined based upon the market price of our
common stock during a specified period ending two business days prior to the
effective date of the Registration Statement of which this Prospectus is a part.
(See "Recent Developments -- Acquisition of STG Holdings Inc.") These persons
will offer shares obtained by them in connection with our acquisition of STG.
Joseph Broderick, who formerly served as one of our executive officers, received
an option in December 1995 from William Gibson, then our chief executive
officer, to purchase 120,000 shares of our common stock at $3.28 per share (as
adjusted for 2-for-1 stock splits in 1997 and 2000) in connection with Mr.
Broderick's employment by us. The option vested in full in December 1999 and
expires in December 2009. The selling stockholders named in this Prospectus,
consisting of certain of the former STG stockholders or employees and Mr.
Broderick, may sell the shares offered by them under 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 any proceeds from the sale of shares offered by the
selling stockholders hereby.
Our common stock is listed on The Nasdaq National Market under the symbol
"MANU." On March 7, 2001, the closing sale price of our common stock, as
reported on The Nasdaq National Market, was $26.94.
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 March 12, 2001
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TABLE OF CONTENTS
PAGE
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Disclosure Regarding Forward Looking Statements............. 2
Prospectus Summary.......................................... 3
Risk Factors................................................ 5
Use of Proceeds............................................. 17
Price Range of Common Stock................................. 17
Dividend Policy............................................. 17
Selling Holders............................................. 17
Plan of Distribution........................................ 19
Description of Capital Stock................................ 19
Legal Matters............................................... 21
Experts..................................................... 22
Where You Can Find More Information......................... 22
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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
phrases "Leveraged Intelligence," "Enterprise Profit Optimization," and
"NetWORKS" 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" or
"Manugistics" refers to Manugistics Group, Inc., a Delaware corporation.
All share numbers in this Prospectus reflect the Company's two-for-one
stock split effective December 7, 2000.
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, and Section 21E of the
Exchange Act of 1934, as amended. 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.
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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.
MANUGISTICS
OUR BUSINESS
We are the leading global provider of Enterprise Profit Optimization(TM)
(EPO) and marketplace (electronic marketplace) solutions that help companies
lower operating costs, increase revenues, enhance profitability, and accelerate
growth by optimizing the supply-demand network from design and procurement
through pricing and delivery. We believe EPO is an important emerging market
made possible through the combination of the proven cost-reduction power of
supply chain management (SCM) solutions and the breakthrough revenue-generating
capacity of pricing and revenue optimization (PRO).
Our solutions, which include our family of marketplace and application
software products, strategic consulting, and implementation services, help our
clients monitor and streamline their core internal operational processes
involving the design, purchase, manufacture, storage, transportation, marketing,
and selling and pricing of their goods and services. Our solutions help
integrate clients' internal processes with those of their trading partners and
provide the collaboration and optimization required throughout the demand and
supply chains and across extended marketplaces. Our solutions also help our
clients improve customer service and improve resource allocation through more
effective operational decisions, driving revenue higher and costs lower.
Increasing global competition, shortening product life cycles and
developing marketplace initiatives of new and existing competitors are driving
enterprises to provide improved levels of customer service while shortening
their time-to-market. We were an early innovator in trading partner
collaboration, with our first Internet-ready products commercially available in
late 1997. Our technology initiatives continue to focus on the changing needs of
companies in the markets we serve, as well as the requirements of the new
marketplace economy. Our NetWORKS(TM) products are web enabled through our
WebWORKS(TM) architecture and have provided advanced integration to disparate
systems through our WebConnect products. Through our exchange platform
ExchangeWORKS(TM), we are now addressing the new marketplace processes enabled
by the Internet, such as auctions, dynamic pricing, procurement, track and
trace, as well as order and pipeline visibility.
We offer solutions to companies in a diverse array of industries including
agriculture, apparel, chemicals, consumer durables, consumer packaged goods,
electronics & high technology, energy, food & beverage, government, logistics,
metals, motor vehicles & parts, pharmaceuticals, pulp & paper, retail, services
and transport, travel & hospitality. Our customer base of over 1,100 clients
includes large, multinational enterprises such as 3Com, Cisco Systems, Coca-Cola
Bottling, Astec Power Division of Emerson, Ford, Fuji Photo Film USA,
Harley-Davidson, Levi Strauss & Co., Marriott, Texas Instruments, The Limited
and Unilever, as well as medium-sized enterprises and emerging marketplaces.
Our principal executive offices are located at 2115 East Jefferson Street,
Rockville, Maryland 20852, and our main telephone number is (301) 984-5000. We
have offices in Atlanta, Chicago, Denver, Irving, TX, Mountain View, CA, Wayne,
PA, and San Mateo, CA in the United States, and internationally in Australia,
Belgium, Brazil, Canada, France, Germany, Italy, Japan, Mexico, The Netherlands,
Singapore, Spain, Sweden and the United Kingdom.
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RECENT DEVELOPMENTS
Acquisition of STG Holdings Inc.
As we have previously announced, effective as of January 16, 2001, we
acquired all of the capital stock of STG Holdings Inc., a Delaware corporation
("STG") based in London, England (the "Acquisition"), pursuant to a Stock
Purchase Agreement dated as of December 22, 2000 among us, STG, all of the
stockholders of STG, and Strathdon Investments Limited, as representative of the
stockholders, optionholders and warrantholders of STG (the "STG Equity Holders
Representative"). STG is a leading developer of advanced strategic, tactical and
operational planning, scheduling and simulation software for single factory and
multi-factory enterprises. This acquisition will be accounted for as a purchase
transaction and will result in the recording of an intangible asset.
In connection with the Acquisition, we agreed to pay to or for the benefit
of the holders of STG's capital stock (the "STG Stockholders") consideration
valued at approximately $6.0 million, consisting of cash payments of
approximately $1.5 million and the issuance of shares of our common stock valued
at approximately $4.5 million to certain STG Stockholders and certain former
employees of STG. The number of shares of common stock to be issued was
determined based on the market price of our common stock during a specified
period ending two business days before the effective date of the Registration
Statement of which this Prospectus is a part. One million dollars of the cash
paid is being held in escrow for a period of one year from the date of the
Acquisition to secure potential claims which we may have for indemnification,
and the remaining cash was used to pay certain fees and costs associated with
the Acquisition.
We also agreed to pay up to $27.9 million in additional consideration, if
certain revenue-based performance requirements were met during the 21 month
period ended October 31, 2002. This additional consideration, if any, would be
payable in cash or in the form of shares of our common stock. The additional
consideration would be allocated among certain of the STG Stockholders and the
holders of options and warrants exercisable for shares of STG's capital stock
outstanding at the time of the Acquisition as agreed upon by the affected
parties. If we issue additional shares of our common stock, we are obligated to
register them for resale on a Form S-3.
THE OFFERING
Common Stock Offered by the Selling
Stockholders.................................. 279,822
Common Stock Outstanding........................ 66,680,600
The Company will not receive any proceeds
from the sale of common stock offered
Use of Proceeds................................. hereby.
Nasdaq Symbol................................... MANU
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RISK FACTORS
An investment in the shares of common stock involves a high degree of risk.
Before you decide to purchase the shares of common stock, you should carefully
consider these risk factors together with all of the other information included
in this Prospectus.
RISKS RELATED TO OUR BUSINESS
AS A RESULT OF RECENT SIGNIFICANT CHANGES IN OUR MANAGEMENT, PERSONNEL AND
PRODUCTS, YOU MAY HAVE DIFFICULTY EVALUATING OUR PROSPECTS BASED ON OUR
SIGNIFICANT LOSSES IN RECENT FISCAL YEARS.
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 for the nine months ended November 30, 2000. In response to our
problems, we hired a new executive management team, enhanced our supply chain
optimization and marketplace products and services, expanded the scope of our
product and service offerings to include pricing and revenue optimization and
improved our direct sales organization. Our ability to continue to achieve
operational improvements and improve our financial performance will be subject
to a number of risks and uncertainties, including the following:
- slower growth in the market for supply chain management, pricing/revenue
optimization and marketplace solutions;
- our ability to introduce new software products and services to respond to
technological and client needs;
- our ability to manage our anticipated growth;
- 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 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 FISCAL YEARS. OUR FUTURE
RESULTS WILL BE ADVERSELY AFFECTED BY SEVERAL TYPES OF NON-CASH CHARGES. IF WE
DO NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE, OUR STOCK PRICE MAY
DECLINE.
We have recently incurred significant losses, including net losses of $11.4
million for the nine-months ended November 30, 2000, $8.9 million in fiscal 2000
and $96.1 million in fiscal 1999. We will incur non-cash charges in the future
related to the amortization of intangible assets and non-cash compensation
expenses associated with our acquisition of Talus Solutions, Inc. (Talus) and
the amortization of intangible assets relating to our acquisition of STG, and
related to investment banking fees associated with our private placement of 5%
subordinated convertible notes. In addition, we may incur non-cash compensation
charges related to our stock option repricing as discussed in more detail on
page 13. We cannot assure you that our revenues will grow or that we will
achieve or maintain profitability in the future. Our ability to increase
revenues 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, and our ability to finance our
operations could be impaired.
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OUR OPERATING RESULTS FLUCTUATE, AND IF WE FAIL TO MEET THE EXPECTATIONS OF THE
INVESTMENT COMMUNITY IN ANY PERIOD, OUR STOCK PRICE COULD DECLINE SIGNIFICANTLY.
Our revenues and operating results are difficult to predict, and 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;
- 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;
- changes in prices or the pricing models for our products and services or
those of our competitors;
- changes in the mix of our software license revenues, consulting revenues
and solution support revenues;
- 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. If this occurs, the
price of our common stock could decline significantly.
VARIATIONS IN THE TIME IT TAKES US TO SELL OUR SOLUTIONS MAY CAUSE FLUCTUATIONS
IN OUR OPERATING RESULTS.
The time it takes to sell our solutions to prospective clients varies
substantially, but typically ranges between six and twelve months. Variations in
the length of our sales cycles could cause our revenues to fluctuate widely from
period to period. Because we typically recognize a substantial portion of our
license revenues in the last month of a quarter, any delay in the sale of our
products could cause significant variations in our revenues from quarter to
quarter. Furthermore, because our operating expenses are relatively fixed over
the short term and we devote significant time and resources to prospective
clients, these fluctuations could cause our operating results to suffer in some
future periods. The length of our sales cycle depends on a number of factors,
including the following:
- the complexities of the supply chain, pricing/revenue and marketplace
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 process employed by the client;
- the sales channel through which the solution is sold; and
- any other delays arising from factors beyond our control.
THE SIZE AND SCOPE OF OUR CONTRACTS WITH CLIENTS ARE INCREASING, WHICH MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS.
Our clients and prospective clients are seeking to solve increasingly
complex supply chain, pricing/revenue and marketplace problems. Further, we are
now focusing on providing total solutions to our clients, as opposed to only
licensing software. As the complexity of the problems
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our clients seek to solve increases, the size and scope of our contracts with
clients increase. As a result, our operating results could fluctuate due to the
following factors:
- the complexity of our contracts;
- contractual terms may vary widely, which may result in differing methods
of accounting for revenue from each contract;
- losses of, or delays in concluding, larger contracts could have a
proportionately greater effect on our revenues for a particular period;
and
- the sales cycles related to larger contracts may be longer and subject to
greater delays.
Any of these factors could cause our revenues to decline or fluctuate
significantly in any quarter 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 who have commercial relationships or
compete with the acquired company;
- avoid unanticipated operational difficulties or expenditures; and
- effectively operate our existing business lines, given the significant
diversion of resources and management attention required to successfully
integrate acquisitions, including the acquisition of Talus in December
2000 and STG in January 2001.
We experienced significant difficulties with the integration of the
products and operations of ProMIRA Software, Inc. (ProMIRA), and TYECIN Systems,
Inc. (TYECIN), which we acquired in the first half of calendar year 1998. These
difficulties included problems integrating the prior ProMIRA sales forces and
the delayed releases of the in-process technology acquired as part of the
transaction. In addition, as a result of the poor financial performance we
experienced in fiscal 1999, the technology acquired in conjunction with the
TYECIN acquisition was not integrated into our solutions and, therefore,
revenues generated from this technology have been nominal. Similar difficulties
with future acquisitions could materially and adversely affect our business,
results of operations and financial condition.
WE MAY ENCOUNTER PROBLEMS EFFECTIVELY INTEGRATING TALUS.
On December 21, 2000, we completed the acquisition of Talus, a privately
held company that provides pricing and revenue optimization products and
services. This acquisition is substantially larger than all of our prior
acquisitions, not all of which have been successful. In addition to the risks
described above in connection with acquisitions generally, the ultimate success
of our acquisition of Talus is dependent on factors which include the following:
- our ability to complete the commercial release of Talus' custom-developed
products;
- our ability to protect and maintain Talus' intellectual property rights;
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- our ability to successfully market and license the products Talus has
developed and is developing for commercial release;
- our ability to successfully integrate Talus' technologies;
- our ability to retain and motivate Talus' employees;
- market acceptance of the products Talus has commercially developed to
date;
- our ability to fulfill our strategic plan for the acquisition of Talus by
integrating our supply chain and marketplace capabilities and products
with Talus' pricing and revenue optimization products and services;
- market acceptance of our combined supply chain and pricing and revenue
optimization solutions;
- our ability, together with Talus, to cross-sell products and services
into our respective markets; and
- the outcome of disputes and litigation which have arisen in the ordinary
course of business.
OUR ACQUISITION OF TALUS WILL ADVERSELY AFFECT OUR COMBINED FINANCIAL RESULTS.
We will incur substantial dilution to our earnings per share in accordance
with generally accepted accounting principles for the foreseeable future as a
result of the Talus acquisition. In connection with the acquisition, we will
amortize approximately $23 million of deferred compensation related to unvested
stock options over four years. Further, we will incur an annual amortization
charge of approximately $92 million related to goodwill and intangible assets
over the next four years.
WE DEPEND ON SALES OF OUR SUPPLY CHAIN MANAGEMENT, PRICING/REVENUE OPTIMIZATION
AND MARKETPLACE 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 license fees, consulting revenues and
solution support revenues have arisen from, or are related directly to, our
supply chain management, pricing/revenue optimization and marketplace solutions.
We expect to continue to be dependent upon these products in the future, and any
factor adversely affecting the products or the market for supply chain
management, pricing/revenue optimization and marketplace solutions, in general,
would materially and adversely affect our ability to generate revenues. While we
believe the market for supply chain management, pricing/revenue optimization and
marketplace solutions will continue to expand, it may grow more slowly than in
the past. If the market for our products does not grow as rapidly as we expect,
revenue growth, operating margins or both could be adversely affected.
OUR MARKETS ARE VERY COMPETITIVE, AND WE MAY NOT BE ABLE TO EFFECTIVELY COMPETE.
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. Further, our current or prospective
clients and partners may become competitors in the future. Increased competition
is likely to 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.
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MANY OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY MORE 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., i2
Technologies, Inc., Logility, Inc., Micros Systems, Inc., PROS Revenue
Management, Sabre, Inc., SynQuest and YieldStar Technology. Some marketplace
software companies that do not currently offer competitive products or
solutions, such as Ariba, Inc. and Commerce One, may begin to compete directly
with us. In addition, some enterprise resource planning (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
continuing to develop supply chain planning software products. 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. 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 WE FAIL TO DEVELOP NEW PRODUCTS AND SERVICES IN THE FACE OF OUR INDUSTRY'S
RAPIDLY EVOLVING TECHNOLOGY, OUR FUTURE RESULTS MAY BE MATERIALLY AND ADVERSELY
AFFECTED.
The markets for supply chain management, pricing/revenue optimization and
marketplace 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 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 investment. 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 REVENUES OR DELAYS IN THE
MARKET ACCEPTANCE OF OUR PRODUCTS.
Our software products are complex and are frequently integrated with a wide
variety of third-party software. We may license products that contain undetected
errors or failures when new products are first introduced or as new versions are
released. We may also be unable to meet client expectations in implementing our
solutions. These problems may result in claims for damages suffered by our
clients or a loss of, or delays in, the market acceptance of our products.
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In the past, we have discovered software errors in our new releases and new
products after their introduction. In the event that we experience significant
software errors in future releases, we could experience claims for damages,
delays in product releases, client dissatisfaction and potentially lost revenues
during the period required to correct these errors. In the future, we may
discover errors or limitations in new releases or new products after the
commencement of commercial shipments. Any of these errors, defects or delays
could materially harm our business.
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. Any impairment in our
relationship with these third parties could adversely impact our business and
financial condition.
WE ARE SUBSTANTIALLY DEPENDENT ON THIRD PARTIES TO INTEGRATE OUR SOFTWARE WITH
OTHER SOFTWARE PRODUCTS AND PLATFORMS.
We depend on companies such as Extricity, 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.
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 an important role in
marketing our products. 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 whom 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 results of operations.
WE HAVE ONLY RECENTLY ENTERED INTO CONTRACTS WITH GOVERNMENTAL AGENCIES. THESE
CONTRACTS OFTEN INVOLVE LONG PURCHASE CYCLES AND COMPETITIVE PROCUREMENT
PROCESSES.
We have recently begun providing our solutions to government agencies and
expect that a significant portion of our future revenues may be derived from
government agency clients.
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Obtaining government contracts may involve long purchase cycles, competitive
bidding, qualification requirements, performance bond requirements, delays in
funding, budgetary constraints and extensive specification development and price
negotiations. In order to facilitate doing business with the federal government,
we have submitted a schedule of prices for our products and services to the
General Services Administration. We are permitted to update our schedule of
prices only on an annual basis. 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 revenues could decline as a result of these
government procurement processes. 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 given project depends in large part on our ability to estimate such costs
accurately and 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 renegotiation 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 EFFECTIVELY EXPAND OUR SALES ORGANIZATION, OUR ABILITY TO GROW
WILL BE LIMITED.
Our continuing efforts to expand our sales organization will require
significant resources. New sales personnel will require training and may take a
long time to achieve full productivity. Further, the competition for qualified
sales personnel is intense, and 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 and support our products could limit our growth and
adversely affect our 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
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increasing numbers of patent applications. We have no way of knowing what patent
applications third parties have filed until a patent is issued. It can take as
long as three years 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.
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;
- different accounting practices;
- problems in collecting accounts receivable;
- legal uncertainty regarding liability, ownership and protection of
intellectual property;
- tariffs and other trade barriers;
- seasonal reductions in business activities;
- potentially adverse tax consequences; and
- political instability.
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.
FLUCTUATIONS IN FOREIGN CURRENCIES COULD ADVERSELY AFFECT OUR OPERATING RESULTS.
Although the majority of our contracts are denominated in U.S. dollars,
most of the revenues from licenses with customers outside the United States have
been denominated in foreign currencies, typically in the local currency of our
selling business unit. We anticipate that the proportion of our revenues
denominated in foreign currencies will increase. A decrease in the value of
foreign currencies relative to the U.S. dollar could result in losses from
foreign currency fluctuations. With respect to our international sales that are
U.S. dollar-denominated, an increase in the value of the U.S. dollar relative to
the value of foreign currencies could make our products and services less
competitive with respect to price.
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 officers for any reason
could have a material adverse effect on our business, operating results,
financial condition and cash flows.
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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 additional 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 decline in our stock price could adversely affect our ability to attract and
retain employees, as it has in the past.
WE HAVE RECENTLY EXPERIENCED SIGNIFICANT CHANGES IN OUR SENIOR MANAGEMENT TEAM
AND THERE IS NO ASSURANCE THE TEAM WILL WORK TOGETHER EFFECTIVELY.
Commencing in the first quarter of fiscal 2000, we have completely changed
our senior management team. Gregory J. Owens, our Chief Executive Officer,
joined us in April 1999. With one exception, all of our other present executive
officers joined us after Mr. Owens. Our success depends on the ability of our
management team to work together effectively. Our business, revenues and
financial condition will be materially and adversely affected if our senior
management team does not manage our company effectively or if we are unable to
retain our senior management.
EXPENSES ARISING FROM OUR 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, we offered to reprice employee stock options, other than those
held by our executive officers or directors, effective January 29, 1999, to
bolster employee retention. The effect of this repricing resulted in options to
acquire approximately 3,040,000 shares being repriced and the four-year vesting
period starting 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 increase in our common
stock market price since the FASB-mandated measurement date of July 1, 2000
resulted in a non-cash stock compensation expense of $14.6 million being
recorded for the nine months ended November 30, 2000. This non-cash stock
compensation expense caused what would otherwise have been reported as net
income for the nine months of $3.2 million, or $0.05 per basic and diluted
share, to be reported as a net loss of $11.4 million, or $0.20 per basic and
diluted share. In each future quarter, we will record the additional expense or
benefit related to the repriced stock options still outstanding 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.
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RISKS RELATED TO OUR INDUSTRY
LACK OF GROWTH OR DECLINE IN INTERNET USAGE OR MARKETPLACES COULD BE DETRIMENTAL
TO OUR FUTURE OPERATING RESULTS.
The growth of the Internet has increased demand for supply chain
management, pricing/ revenue optimization and marketplace 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 marketplace. The Internet may not succeed in becoming a viable
marketplace 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.
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
become and remain a viable commercial marketplace, our business, financial
condition and results of operations could be materially and adversely affected.
NEW LAWS OR REGULATIONS AFFECTING THE INTERNET, MARKETPLACES OR COMMERCE IN
GENERAL COULD REDUCE OUR REVENUES 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 and operating results
could suffer.
THE VIABILITY OF ELECTRONIC MARKETPLACES IS UNCERTAIN.
Electronic marketplaces that allow collaboration over the Internet among
trading partners are relatively new and unproven. There can be no assurance that
trading partners will adopt marketplaces as a method of doing business. Trading
partners may fail to participate in marketplaces for a variety of reasons,
including:
- concerns about the confidentiality of information provided electronically
to marketplaces;
- the inability of technological advances to keep pace with the volume of
information processed by marketplaces; and
- regulatory issues, including antitrust issues that may arise when trading
partners collaborate through marketplaces.
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Any of these factors could limit the growth of marketplaces as an accepted
means of commerce. Slower growth or the abandonment of the marketplace concept
in one or more industries could have a material adverse affect on our results of
operations and financial condition.
OTHER RISK FACTORS
OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
In November 2000, we completed a debt offering of $250 million in 5%
subordinated convertible notes (the "Notes"). 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 flow from
operations to the payment of principal of, and interest on, our
indebtedness, thereby reducing the availability of such cash flow to fund
our growth strategy, working capital, capital expenditures 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 these 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.
RESALES OF SIGNIFICANT AMOUNTS OF OUR COMMON STOCK ISSUED IN CONNECTION WITH THE
ACQUISITION OF TALUS SOLUTIONS MAY CAUSE OUR STOCK PRICE TO DECLINE.
In connection with the acquisition of Talus Solutions, Inc., we issued
7,026,260 new shares of our common stock. Of these shares, a total of 5,972,530
shares were delivered to Manugistics' exchange agent for direct transfer to the
former Talus stockholders and a total of 1,053,730 shares were delivered to
State Street Bank and Trust Company, as escrow agent, to secure potential
indemnification claims of Manugistics. To the extent that the escrowed shares
are not subject to indemnification claims, the escrowed shares will be released,
subject to existing claims, in two installments, on October 31, 2001 and July 2,
2002. Of the 5,972,530 shares delivered to the exchange agent, approximately 1.3
million shares were freely tradable upon completion of the acquisition. The
remaining approximately 4.6 million shares are subject to share transfer
restrictions and will become available for sale in three stages in accordance
with the terms of the share transfer restriction agreements signed by certain
principals of Talus Solutions, Inc. The first release date was January 18, 2001,
at which time approximately 1.4 million shares were released. The balance of
these shares will be released, in accordance with the terms of the share
transfer restriction agreements, on May 31, 2001 and October 31, 2001.
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In addition, at closing, a total of approximately 1.4 million shares were
reserved for issuance upon exercise of outstanding Talus Solution's stock
options and warrants which were assumed by Manugistics. Options to purchase a
total of approximately 700,000 shares were exercisable at the time of completion
of the acquisition. In addition, a total of approximately 370,000 of these
shares were subject to share transfer restrictions which expired January 18,
2001.
SALES OF SIGNIFICANT AMOUNTS OF OUR COMMON STOCK BY OUR EXECUTIVE OFFICERS AND
DIRECTORS 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. Thereafter, they will sell up to approximately
300,000 shares per fiscal quarter pursuant to these trading plans. These
quarterly sales will continue indefinitely until the trading plans are modified
or terminated. Certain of our other executive officers and directors are
considering establishing similar plans to sell shares on a quarterly basis. The
sale of these shares may cause the market price of our stock price to decline.
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. In addition, our bylaws require a two-thirds vote of stockholders to
remove a director from office. 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.
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;
- 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 supply chain management,
pricing/revenue optimization and marketplace 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;
- additions or departures of key personnel;
- our sales of additional capital stock; and
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- other events or factors that may be beyond our control.
In addition, the stock markets in general, The Nasdaq National Market and
the market for software companies in particular, have recently experienced
extreme price and volume volatility and a significant cumulative decline in
recent months. Such volatility and decline have affected 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.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
hereby. The selling stockholders will receive all of the net proceeds from the
sale of the common stock which they respectively own.
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
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FISCAL YEAR 2000
First Quarter............................................. $ 5.63 $ 2.63
Second Quarter............................................ 8.00 4.34
Third Quarter............................................. 8.94 4.53
Fourth Quarter............................................ 29.06 8.50
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 (March 1 through March 7)................... $31.38 $21.50
On March 7, 2001, the last reported sale price of our common stock as
reported on The Nasdaq National Market was $26.94 per share. On March 7, 2001,
there were approximately 370 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 September
30, 2001, 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 STOCKHOLDERS
This Prospectus is to be used in connection with the sale by the selling
stockholders of a total of up to approximately 279,822 shares of common stock.
The shares to be sold by the selling stockholders, other than Mr. Broderick,
have been issued to the selling stockholders in connection
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with our acquisition of STG. (See "Recent Developments -- Acquisition of STG
Holdings, Inc.," above, and "Plan of Distribution," below.) These shares were
issued in transactions exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act. The shares to be
sold by Mr. Broderick are issuable upon exercise of an option granted to him by
one of our affiliates in a transaction exempt from the registration requirements
of the Securities Act pursuant to Section 4(1 1/2) of the Securities Act.
The following table sets forth certain information regarding the beneficial
ownership of shares of common stock by the selling stockholders as of March 9,
2001; each selling stockholder owned less than one percent of the shares of
common stock then outstanding. The shares being offered by this Prospectus
constitute all of the shares of common stock acquired to date by the selling
stockholders in the Acquisition. Each selling stockholder, other than Mr.
Broderick, owns only those shares of common stock which were acquired by such
selling stockholder in the Acquisition. Mr. Broderick beneficially owns a total
of 3,386 outstanding shares of our common stock which are not being offered
pursuant to this Prospectus. It is assumed that all of the shares being offered
by this Prospectus will be sold; however, each of the selling stockholders 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, none of the selling stockholders has held any
office or maintained any material relationship with us or our affiliates over
the past three years, except as set forth in the notes to the table below.
NAME OF SELLING NUMBER OF SHARES OWNED
STOCKHOLDER AND OFFERED
--------------- ----------------------
STG Stockholders
APS Partners, L.P........................................... 90,161
Merifin Capital, NV......................................... 37,819
Strathdon Investments Limited............................... 29,762
Lord Nicholas Hillsborough.................................. 602
Dr. Stephen Franks (1)...................................... 434
Benjamin William Brown...................................... 371
Brian Derek Taylor (2)...................................... 312
John Alexander Spens........................................ 178
Colin MacDonald Amies....................................... 183
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STG Stockholders Total...................................... 159,822
Other Selling Stockholders
Joseph E. Broderick(3)...................................... 120,000
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Grand Total................................................. 279,822
---------------
(1) Dr. Stephen Franks serves as the Managing Director of Scheduling Technology
Group Limited, which became our subsidiary upon the effectiveness of the
Acquisition.
(2) Brian Taylor serves as the Software Service Manager of Scheduling Technology
Group Limited which became our subsidiary upon the effectiveness of the
Acquisition.
(3) Joseph Broderick served as our Executive Vice President from December 1995
through January 1999.
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PLAN OF DISTRIBUTION
We have agreed to register the shares of the selling stockholders for
resale under the Securities Act at our own expense. We intend 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 the shares pursuant to the
Registration Statement; or (ii) 367 days after the Registration Statement
becomes effective. The selling stockholders may generally 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.
All of the shares issued in connection with the Acquisition, or issuable
upon the exercise of Mr. Broderick's stock option, are covered by this
Prospectus and are eligible to be resold upon the effectiveness of the
Registration Statement of which this Prospectus is a part.
The common stock is presently listed for trading on The Nasdaq National
Market. The sale of the shares offered under this Prospectus is not being
underwritten. The selling stockholders may sell 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 the selling stockholders in
connection with the issuance of the shares. It is anticipated that usual and
customary brokerage fees will be paid by the selling stockholders upon sale of
the common stock offered under this Prospectus. In connection with any sales,
the selling stockholders 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.
Each selling stockholder 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 which 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 100,000,000 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 February 28, 2001, there were 66,680,600 shares of our common stock
outstanding held of record by approximately 373 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; all other matters are approved by a
majority of the votes cast.
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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 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
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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;
- 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
offered by this Prospectus are being passed upon for Manugistics 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 February 28, 2001, Mr. Jacovini was the beneficial owner of
142,000 shares of common stock (including 2,672 shares of common stock held by
his spouse and a total of 76,328 shares of common stock issuable upon exercise
of certain options).
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EXPERTS
The consolidated financial statements of Manugistics as of February 29,
2000 and February 28, 1999 and for each of the three years in the period ended
February 29, 2000, incorporated in this Prospectus by reference from the
Manugistics Annual Report on Form 10-K for the period ended February 29, 2000,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of Deloitte & Touche LLP given upon
their authority as experts in accounting and auditing. The consolidated
financial statements give retroactive effect to the merger of Manugistics and
TYECIN Systems, Inc. ("TYECIN"), which has been accounted for as a pooling of
interests as described in Note 11 to the consolidated financial statements. We
did not audit the statements of income, stockholders' equity and cash flows of
TYECIN for the year ended December 31, 1997, which consolidated statements
reflect total revenues of $4,597,200 for the year ended December 31, 1997. Those
consolidated statements were audited by other auditors whose report has been
furnished to us and our opinion, insofar as it related to the amounts included
for TYECIN for 1997 is based solely upon the report of such auditors.
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.
The consolidated financial statements of TYECIN Systems, Inc., not
separately presented in this Prospectus, have been audited by
PricewaterhouseCoopers LLP, independent accountants whose report thereon is
incorporated by reference herein. Such consolidated financial statements, to the
extent they have been included in the financial statement of Manugistics, have
been so incorporated by reference in reliance on the report of such independent
accountants given on the authority of said firm as experts in auditing and
accounting.
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 7 World Trade Center,
Suite 1300, New York, NY 10048. 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 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 29, 2000;
- Current Report on Form 8-K, filed March 2, 2000;
- Current Report on Form 8-K, filed April 27, 2000;
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- Quarterly Report on Form 10-Q for the quarter ended May 31, 2000;
- Current Report on Form 8-K, filed September 22, 2000;
- Current Report on Form 8-K/A, filed October 10, 2000;
- Current Report on Form 8-K, filed October 11, 2000;
- Current Report on Form 8-K/A, filed October 11, 2000;
- Quarterly Report on Form 10-Q for the quarter ended August 31, 2000;
- Current Report on Form 8-K, filed October 20, 2000;
- Current Report on Form 8-K, filed November 1, 2000;
- Current Report on Form 8-K, filed November 2, 2000;
- Current Report on Form 8-K, filed November 8, 2000;
- Current Report on Form 8-K, filed November 28, 2000;
- Current Report on Form 8-K, filed December 7, 2000;
- Current Report on Form 8-K, filed December 8, 2000;
- Current Report on Form 8-K, filed December 21, 2000;
- Current Report on Form 8-K, filed December 22, 2000;
- Current Report on Form 8-K, filed January 4, 2001;
- Quarterly Report on Form 10-Q for the quarter ended November 30, 2000;
- Current Report on Form 8-K/A, filed January 16, 2001;
- Current Report on Form 8-K, filed January 18, 2001;
- Current Report on Form 8-K, filed March 7, 2001;
- Current Report on Form 8-K, filed March 8, 2001; and
- 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.
2115 EAST JEFFERSON STREET
ROCKVILLE, MD 20852
(301) 984-5000
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 March 12, 2001. You should not assume that this Prospectus is accurate as
of any other date.
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