SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported), June 30 28, 2005

MANUGISTICS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

0-22154		52-1469385
(Commission File Number No.)		(IRS Employer Identification No.)

9715 Key West Avenue
Rockville, Maryland 20850

(Address of principal executive offices)

Registrant’s telephone number, including area code:

(301) 255-5000

Check ~~the~~ the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 21.0201 ~~Results~~Entry ofinto ~~Operations~~a ~~and~~Material ~~Financial~~Definitive ~~Condition.~~Agreement

OnFiscal ~~June 30,~~2006 ~~2005, the~~Executive ~~Company~~Compensation announced via press release the Company’s results for its first quarter ended May 31, 2005. A copy of the Company’s press release is attached hereto as Exhibit 99.1. The information contained in Item 2.02 of this Form 8-K and the attached exhibit are furnished to, but not filed with, the Securities and Exchange Commission. The information contained in this Item 2.02 and in the accompanying exhibit shall not be incorporated by reference to any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.Plan

~~SIGNATURES~~On June 28, 2005, the Compensation Committee of the Board of Directors of Manugistics Group, Inc. (the “Company”) approved, and the Company’s Board of Directors ratified, the fiscal 2006 base salaries and cash bonus incentive compensation plan for the Company’s Chief Executive Officer and other executive officers. These annual base salaries do not reflect any increase over the officers’ fiscal 2005 base salaries. Under the cash bonus incentive compensation plan, the Company’s Chief Executive Officer and executive officers named in the Company’s 2005 Proxy Statement are entitled to receive the following annual base compensation, and are eligible to receive the following annualized cash bonus incentive compensation earned and payable on a quarterly basis in four equal increments upon the attainment of certain quarterly corporate operating targets and, in the case of Mr. Kubera, certain quarterly business unit revenue and operating targets. No quarterly cash bonus incentive compensation was earned or paid for the first quarter of fiscal 2006. The Compensation Committee did not consider or award any stock options to any executive officer, including the named executive officers below.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Named Executive Officer	Annual Base Salary		Annualized Cash Bonus Eligibility for Year Ended February 28, 2006

Joseph L. Cowan	$	400,000	$	400,000
Chief Executive Officer and Director

Raghavan Rajaji	$	315,000	$	300,000
Executive Vice President and Chief Financial Officer

Ronald P. Kubera	$	225,000	$	225,000
Senior Vice President of Consumer Goods

	MANUGISTICS GROUP, INC.
	(Registrant)
Dated: June 30, 2005	By	/s/ Raghavan Rajaji
		Raghavan Rajaji
		Executive Vice President and
		Chief Financial Officer

Non-Employee Director Compensation

2The Compensation Committee did not consider non-employee director compensation for fiscal 2006, which remains the same as non-employee director compensation for fiscal 2005, as disclosed in the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on June 28, 2005. The Company pays all non-employee directors an annual retainer of $15,000, except for the Chairman of the Board, who receives an annual retainer of $80,000. Additionally, the Chairman of the Audit Committee receives an annual retainer of $10,000, and each of the Chairmen of the Company’s other committees receives an annual retainer of $5,000. Non-employee directors also receive $1,000 for each Board and committee meeting attended. Directors who are employees of the Company do not receive any compensation for their service on the Board. Directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors and its committees.

~~EXHIBIT~~In addition, under the Company’s Amended and Restated 1998 Stock Option Plan (the “1998 SOP”), each non-employee director, including the Chairman of the Board, receives annually, commencing with the first annual meeting of shareholders following the date of appointment or election to the Board, an option to purchase 10,000 shares of Common Stock. Any non-employee director who is appointed or elected to the Board after March ~~INDEX~~1, 2003 receives an option to purchase 35,000 shares on the date of appointment or election, prorated based on the number of fiscal quarters ending from the date of the appointment or election until the next annual meeting. All of these options vest quarterly over a five-year period. The 1998 SOP further provides that discretionary grants of options may also be made to non-employee directors.

Exhibit No.		Description
99.1		Press release dated June 30, 2005

Addendum to Offer Letter

3On June 30, 2005, the Company entered into an Addendum to the Offer Letter between the Company and Kelly Davis-Stoudt, the Company’s Vice President, Chief Accounting Officer and Controller, which Addendum is filed as Exhibit 10.1 hereto and the terms of which are incorporated herein. The Addendum provides that in the event that Ms. Davis-Stoudt is terminated by the Company for convenience, as compared to cause, such as gross misconduct or upon a criminal conviction, Ms. Davis-Stoudt will receive severance payments equivalent to up to six (6) months base salary, in accordance with the Company’s regular payroll practices, and benefits, to the extent she is eligible to receive such benefits under the terms of the relevant benefit plan. Both severance payments and benefits cease

~~MANUGISTICS GROUP, INC AND SUBSIDIARIES~~2

~~CONDENSED~~immediately ~~CONSOLIDATED~~if ~~STATEMENTS~~Ms. OFDavis-Stoudt begins ~~OPERATIONS~~alternative employment during the Severance Period. Any post-termination ~~GAAP~~period ~~(1)~~during which Ms. Davis-Stoudt is receiving severance payments and benefits is defined as the “Severance Period.”

~~(in~~During ~~thousands~~the Severance Period, ~~except~~any ~~per~~employee ~~share~~stock options ~~data)~~which Ms. Davis-Stoudt holds will continue to vest in accordance with their terms.

	Three Months Ended
	May 31,
	(Unaudited)
	2005			2004
REVENUE:
Software	$	8,391		$	10,368
Support	21,815			21,421
Services	14,681			17,558
Reimbursed expenses	1,770			2,236
Total revenue	46,657			51,583
OPERATING EXPENSES:
Cost of Revenue:
Cost of software	4,468			3,914
Amortization of acquired technology	1,991			3,546
Cost of services and support	15,388			18,190
Cost of reimbursed expenses	1,770			2,236
Sales and marketing	11,208			15,240
Product development	7,498			8,328
General and administrative	5,268			6,014
Amortization of intangibles	1,663			1,662
Exit and disposal activities	427			(2,517		)
Non-cash stock option compensation charge	—			120
Total operating expenses	49,681			56,733
OPERATING LOSS	(3,024		)	(5,150		)
OTHER EXPENSE, NET	(1,496		)	(2,262		)
LOSS BEFORE INCOME TAXES	(4,520		)	(7,412		)
PROVISION FOR INCOME TAXES	396			321
NET LOSS	$	(4,916	)	$	(7,733	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.06	)	$	(0.09	)
SHARES USED IN BASIC AND DILUTED LOSS PER SHARE CALCULATION	82,109			81,819

The foregoing severance payments and benefits are conditioned upon the execution by Ms. Davis-Stoudt of a termination agreement with the Company which will include a non-compete and non-solicitation agreement and full release of claims.

Item 9.01(1c) ~~GAAP~~ ~~= Generally Accepted Accounting Principles~~Exhibits

4(c) Exhibit 10.1 Addendum to Offer Letter between Manugistics Group, Inc. and Kelly Davis-Stoudt.

~~MANUGISTICS GROUP, INC AND SUBSIDIARIES~~3

~~ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON - GAAP (1)~~SIGNATURES

~~(in~~Pursuant ~~thousands~~to the requirements of the Securities Exchange Act of 1934, ~~except~~the ~~per~~Registrant ~~share~~has ~~data)~~duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Three Months Ended
	MANUGISTICS GROUP, INC. (Registrant)
		May 31,
Dated: July 1, 2005	By	/s/ Raghavan Rajaji
		(Unaudited)
		Raghavan Rajaji
		2005			2004
		Executive Vice President and
REVENUE:
		Chief Financial Officer
Software		$	8,391		$	10,368
Support		21,815			21,421
Services		14,681			17,558
Reimbursed expenses		1,770			2,236
Total revenue		46,657			51,583
OPERATING EXPENSES:
Cost of Revenue:
Cost of software		4,468			3,914
Cost of services and support		15,388			18,190
Cost of reimbursed expenses		1,770			2,236
Sales and marketing		11,208			15,240
Product development		7,498			8,328
General and administrative		5,268			6,014
Total operating expenses		45,600			53,922
ADJUSTED OPERATING INCOME (LOSS)		1,057			(2,339		)
OTHER EXPENSE, NET		(1,496		)	(2,262		)
ADJUSTED LOSS BEFORE INCOME TAXES		(439		)	(4,601		)
PROVISION FOR INCOME TAXES		396			321
ADJUSTED NET LOSS		$	(835	)	$	(4,922	)
BASIC AND DILUTED ADJUSTED LOSS PER SHARE		$	(0.01	)	$	(0.06	)
SHARES USED IN BASIC AND DILUTED ADJUSTED LOSS PER SHARE CALCULATION		82,109			81,819

~~(1) The~~EXHIBIT adjusted condensed consolidated statements of operations is a non-GAAP presentation of the Company’s financial performance that is intended to enhance the understanding of the results of operations. Please see the reconciliation to GAAP results that also accompanies this press release. INDEX

Exhibit No.		Description
10.1		Addendum to Offer Letter between Manugistics Group, Inc. and Kelly Davis-Stoudt

~~MANUGISTICS GROUP, INC AND SUBSIDIARIES~~4

RECONCILIATION OF GAAP TO ADJUSTED CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MAY 31, 2005

(in thousands, except per share data)

(Unaudited)

	GAAP			Adjustments			Adjusted (1)
REVENUE:
Software	$	8,391		$	—		$	8,391
Support	21,815			—			21,815
Services	14,681			—			14,681
Reimbursed expenses	1,770			—			1,770
Total revenue	46,657			—			46,657
OPERATING EXPENSES:
Cost of Revenue:
Cost of software	4,468			—			4,468
Amortization of acquired technology	1,991			(1,991		)(a)	—
Cost of services and support	15,388			—			15,388
Cost of reimbursed expenses	1,770			—			1,770
Sales and marketing	11,208			—			11,208
Product development	7,498			—			7,498
General and administrative	5,268			—			5,268
Amortization of intangibles	1,663			(1,663		)(a)	—
Exit and disposal activities	427			(427		)(b)	—
Total operating expenses	49,681			(4,081		)	45,600
OPERATING (LOSS) INCOME	(3,024		)	4,081			1,057
OTHER EXPENSE, NET	(1,496		)	—			(1,496		)
LOSS BEFORE INCOME TAXES	(4,520		)	4,081			(439		)
PROVISION FOR INCOME TAXES	396			—			396
NET LOSS	$	(4,916	)	$	4,081		$	(835	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.06	)				$	(0.01	)
SHARES USED IN BASIC AND DILUTED LOSS PER SHARE CALCULATION	82,109						82,109

MANUGISTICS GROUP, INC AND SUBSIDIARIES

RECONCILIATION OF GAAP TO ADJUSTED CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MAY 31, 2004

(in thousands, except per share data)

(Unaudited)

	GAAP			Adjustments			Adjusted (1)
REVENUE:
Software	$	10,368		$	—		$	10,368
Support	21,421			—			21,421
Services	17,558			—			17,558
Reimbursed expenses	2,236			—			2,236
Total revenue	51,583			—			51,583
OPERATING EXPENSES:
Cost of Revenue:
Cost of software	3,914			—			3,914
Amortization of acquired technology	3,546			(3,546		)(a)	—
Cost of services and support	18,190			—			18,190
Cost of reimbursed expenses	2,236			—			2,236
Sales and marketing	15,240			—			15,240
Product development	8,328			—			8,328
General and administrative	6,014			—			6,014
Amortization of intangibles	1,662			(1,662		)(a)	—
Exit and disposal activities	(2,517		)	2,517		(b)	—
Non-cash stock option compensation charge	120			(120		)(c)	—
Total operating expenses	56,733			(2,811		)	53,922
OPERATING LOSS	(5,150		)	2,811			(2,339		)
OTHER EXPENSE, NET	(2,262		)	—			(2,262		)
LOSS BEFORE INCOME TAXES	(7,412		)	2,811			(4,601		)
PROVISION FOR INCOME TAXES	321			—			321
NET LOSS	$	(7,733	)	$	2,811		$	(4,922	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.09	)				$	(0.06	)
SHARES USED IN BASIC AND DILUTED LOSS PER SHARE CALCULATION	81,819						81,819

(1) The adjusted financial information provided is a non-GAAP measure of the Company’s financial performance that is intended to enhance the understanding of the results of operations.

Footnotes:

(a) Amortization of intangibles and acquired technology related to acquisitions.

(b) Exit and disposal activities.

MANUGISTICS GROUP, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	May 31,		February 28,		May 31,
	2005		2005		2004
	(unaudited)		(unaudited)		(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	75,579	$	80,342	$	106,939
Marketable securities	54,758		49,636		19,798
Total cash, cash equivalents and marketable securities	130,337		129,978		126,737
Accounts receivable, net	41,587		45,659		46,547
Other current assets	10,844		10,890		13,260
Total current assets	182,768		186,527		186,544
NONCURRENT ASSETS:
Property and equipment, net	14,999		15,795		22,482
Software development costs, net	12,747		14,390		14,060
Goodwill	185,631		185,658		185,479
Intangible and other assets, net	27,786		31,999		48,127
Long-term investments	2,960		5,911		22,000
TOTAL	$	426,891	$	440,280	$	478,692
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	6,415	$	7,117	$	10,990
Accrued liabilities	26,293		30,704		26,806
Deferred revenue	42,038		43,173		41,792
Total current liabilities	74,746		80,994		79,588
NONCURRENT LIABILITIES:
Convertible debt	175,500		175,500		175,500
Long-term debt and capital leases	1,505		1,668		2,725
Other	15,861		17,372		11,849
STOCKHOLDERS’ EQUITY	159,279		164,746		209,030
TOTAL	$	426,891	$	440,280	$	478,692
SUPPLEMENTAL BALANCE SHEET INFORMATION:
Total cash, cash equivalents, marketable securities and long-term investments	$	133,297	$	135,889	$	148,737

MANUGISTICS GROUP, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended
	May 31,
	(Unaudited)
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,916	)	$	(7,733	)
Non-cash items	9,700			8,033
Changes in assets and liabilities	(4,193		)	(1,314		)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	591			(1,014		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(433		)	(2,064		)
Capitalization/purchases of software	(1,056		)	(2,570		)
(Purchases) sales of marketable securities, net	(2,300		)	28,943
Purchases of long-term investments, net	—			(13,001		)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	(3,789		)	11,308
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments - long-term debt, net	(812		)	(628		)
Proceeds from exercise of stock options and employee stock plan purchases	123			459
NET CASH USED IN FINANCING ACTIVITIES	(689		)	(169		)
EFFECTS OF EXCHANGE RATES ON CASH BALANCES	(876		)	(745		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(4,763		)	9,380
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	80,342			97,559
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	75,579		$	106,939

MANUGISTICS GROUP, INC AND SUBSIDIARIES

SELECTED STATISTICAL INFORMATION

(in thousands, except DSO)

	Three Months Ended
	May 31,
	(Unaudited)
	2005			2004
Days sales outstanding (DSO) - accounts receivable, net	80			81
Product development costs, as reported	$	7,498		$	8,328
Capitalized software development costs	996			2,519
Gross product development costs	$	8,494		$	10,847
Gross product development costs - % of revenue	18.2		%	21.0		%
Capitalized software development costs	$	996		$	2,519
Amortization of capitalized software development costs	(2,638		)	(2,683		)
Net	$	(1,642	)	$	(164	)

Filing Compare · MANUGISTICS GROUP INC