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•Continued customer satisfaction initiatives, which have contributed to some of the best satisfaction survey results in our history, including accolades from independent survey source Nucleus Research. 

•Acquired ReturnCentral, Inc., a leader in reverse logistics, and Streamsoft LLC, a leader in warehouse slot optimization software, which further expanded our solution offerings and core competencies. And, in early 2004 we also added a team of specialists in distributed order management. We remain excited about all of these acquisitions as we enter 2004. 

Despite the cost of these investments and the overall weak spending environment in 2003, we achieved excellent operating results for the year. 

Total revenue increased by 12% to $196.8 million; and core revenues grew to $172.5 million in 2003, an increase of 14% over the $150.7 million in 2002. 

International revenue increased to $38.7 million in 2003, from $33.4 million in 2002, representing a 16% increase. 

We generated a strong $36.3 million cash from operations in 2003, and increased cash by $33.5 million to $155.4 million at December 31, 2003. 

For 14 years our success has been built on our dedication to customer success and satisfaction. We have licensed our solutions to more than 900 customers, including numerous industry leaders. Our existing customers continue to demonstrate their satisfaction with the Company, contributing 43% of our license revenues. Our focus on our customers has allowed us to develop solid business partnerships, which are key contributors to our product development as well as our financial success. 

We also remained focused on good business ethics and corporate governance. Our Company principles and corporate ethics policies laid out more than four years ago have been key to our strong reputation, and will serve us well for years to come. During the year we had some changes in the 

composition of the board of directors, including the well- deserved “retirement” of Founder and Chairman Alan Dabbiere, and the appointment of John Huntz as independent chairman. Also, Paul Goodwin, vice chair of CSX, joined us as another independent director early in 2003. We will continue to monitor our ethics policies and corporate governance policies to ensure compliance with the evolving standards as well as for the overall effectiveness of such policies. 

As we enter 2004 I am very excited at the prospect of leveraging our financial strength, customer partnerships and strategic investments into an improving information technology spending environment. We see clear growth opportunities from leveraging our investments in RFID technology, global infrastructure, vertical industry expansion, newer products and customer satisfaction. This strong position is further enhanced by the ever more complex supply chain challenges confronting our customers related to expanding global operations, shorter product life cycles and RFID technology. 

I am also excited about our recent announcement of Pete Sinisgalli as president and COO. We first tried to recruit Pete more than one year ago. His experience in the supply chain industry and in technology, combined with a strong cultural fit, make him the ideal candidate to lead the Company to even higher levels as he assumes the CEO role on July 1, 2004, when I become vice chairman. Finally, I would like to thank all of our valued customers, shareholders, business partners, board members and employees for their support of the Company during my tenure as CEO of Manhattan Associates. I look forward to actively helping Pete Sinisgalli and the rest of the Manhattan Associates team in the years ahead. 

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