MANUGISTICS GROUP INC, S-3, 1998-07-01

MANUGISTICS GROUP INC
S-3, 1998-07-01
PREPACKAGED SOFTWARE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1998

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MANUGISTICS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

<TABLE>
<S> <C>
DELAWARE 52-1469385
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

2115 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
(301) 984-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------

WILLIAM M. GIBSON
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
MANUGISTICS GROUP, INC.
2115 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
(301) 984-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------

Copy to:

JOSEPH H. JACOVINI, ESQUIRE
MERRITT A. COLE, ESQUIRE
DILWORTH PAXSON LLP
3200 MELLON BANK CENTER
1735 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103-7595
(215) 575-7000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

From time to time after the effective date of this Registration Statement.

If the only securities being registered on the Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(2) PRICE(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, par value $.002 per share(1)...... 333,207 shares $24.60 $8,194,809.66
=====================================================================================================================

<CAPTION>
- ---------------------------------------------------------------------
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
- ---------------------------------------------------------------------
<S> <C>
Common Stock, par value $.002 per share(1)...... $2,417.47
=====================================================================
</TABLE>

(1) The Common Stock being registered was issued by the Registrant in connection
with the acquisition of TYECIN Systems, Inc., effective as of June 1, 1998.
See "Selling Stockholders."
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to rule 457(c) of the Securities Act of 1933 by taking the average
of the high and low prices of the registrant's Common Stock reported on The
Nasdaq Stock Market on June 26, 1998.
------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 1, 1998

333,207 SHARES

[MANUGISTICS GROUP LOGO]

COMMON STOCK
------------------

This Prospectus relates to 333,207 shares of Common Stock, $.002 par value
per share (the "Common Stock" or the "Shares"), of Manugistics Group, Inc., a
Delaware corporation (the "Company") offered for the account of certain
stockholders of the Company (the "Selling Stockholders"). The Shares offered by
the Selling Stockholders were acquired by them from a subsidiary of the Company
effective as of June 1, 1998, in exchange for the then outstanding capital stock
of TYECIN Systems, Inc., a California corporation ("TYECIN"), pursuant to an
Agreement and Plan of Merger dated as of June 1, 1998, among the Company, TYECIN
and certain individuals. (See "Selling Stockholders.") The Selling Stockholders
may from time to time sell all or a portion of the Shares which may be offered
by them under this Prospectus in ordinary brokerage transactions through the
facilities of Nasdaq, in block transactions, in privately negotiated
transactions or otherwise. The Selling Stockholders may also make private sales
directly or through brokers. The Selling Stockholders may pay customary
brokerage fees, commissions and expenses. The Company will bear all expenses of
registration of the Shares and all other expenses of the offering. The Selling
Stockholders and the brokers executing selling orders on behalf of the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), in which event
commissions received by such brokers may be deemed underwriting commissions
under the Securities Act. (See "Plan of Distribution.")

The Company will not receive any proceeds from the sale of Shares offered
by the Selling Stockholders hereby.

The Common Stock is listed on The Nasdaq Stock Market ("Nasdaq") under the
symbol "MANU." On June 26, 1998, the last reported sale price for the Common
Stock on Nasdaq was $24.07 per share.

------------------

SEE "RISK FACTORS" COMMENCING ON PAGE 7 HEREOF FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.

------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 3

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at 7 World Trade Center, Suite 1300, New York, New
York 10048, and at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can also be obtained from the
Public Reference Section of the Commission, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements
and other information can also be inspected at the offices of Nasdaq, 1735 K
Street, N.W., Washington, D.C. 20006, on which the Company's Common Stock is
listed. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission, located at http://www.sec.gov.

The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933 as amended (the "Securities Act").
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, copies of which are available from the
Public Reference Section of the Commission at prescribed rates as described
above. Statements contained herein concerning the provisions of documents filed
with, or incorporated by reference in, the Registration Statement as exhibits
are necessarily summaries of such provisions and documents and each such
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, filed with the Commission by the Company, are
incorporated in this Prospectus by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1998 ("1998 Form 10-K"); (ii)
the Company's Current Report on Form 8-K dated June 1, 1998; (iii) the Company's
Current Report on Form 8-K dated June 2, 1998; (iv) the Company's Current Report
on Form 8-K dated June 9, 1998; (v) the Company's Current Report on Form 8-K
dated June 18, 1998; and (vi) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A filed under
Section 12 of the Exchange Act.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus has been delivered, on
written or oral request, a copy of any and all of the documents incorporated in
this Prospectus by reference, other than exhibits to such documents not
specifically incorporated by reference therein. Requests for such copies should
be directed to Manugistics Group, Inc., at its principal executive offices
located at 2115 East Jefferson Street, Rockville, Maryland 20852, Attention:
Investor Relations (telephone: (301) 984-5409).

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements included elsewhere herein or incorporated
by reference in this Prospectus.

THE COMPANY

Manugistics Group, Inc. develops, markets and supports software products
for synchronized supply chain management(TM) and provides related services.
Synchronized supply chain management refers to managing the complex interactions
involved in the flows of products through a supply chain, and involves
forecasting product demand and coordinating the timing of distribution,
manufacturing, procurement and transportation activities to meet this demand,
not only across an entire enterprise, but also among an enterprise and its
suppliers and customers. The Company believes it is the only provider of an
integrated suite of strategic, tactical and operational supply chain planning
tools and products that address the four key operational areas of supply chain
management: demand planning, supply planning, manufacturing scheduling and
transportation management.

Many companies have faced increased competition and more demanding customer
service requirements in recent years. Customers have had the leverage to demand
better service from suppliers, partially because bargaining power has shifted to
retailers and consumers from manufacturers and distributors over the past
decade. Also, many companies have contended with shorter product life cycles in
recent years. Manufacturing companies in a number of industries have incurred
substantial costs to build, acquire, maintain and operate plants and equipment.
Given these costs and increased competition, many companies have sought ways to
increase the returns from their significant investments in manufacturing assets.

Supply chain management software enables companies to plan their supply and
manufacturing activities to meet anticipated customer demand, while considering
capacity and materials constraints and other factors. Supply chain management
software complements Enterprise Resource Planning ("ERP") systems and provides
companies with information not only about their own enterprise, but also about
demand from customers and other information relating to suppliers and
transportation providers. Companies in many different industries now recognize
that effective supply chain management is a source of competitive advantage, and
these companies are seeking software that can help them achieve these benefits.

Manugistics' supply chain management software provides strategic, tactical
and operational supply chain planning tools and includes the Supply Chain
Navigator(TM), the Manugistics Integrator(R) and four major families: Demand
Planning, Supply Planning, Manufacturing Scheduling and Transportation
Management. The software operates in most major operating environments and
supports database software from leading relational database software vendors.
The United States list price for the Company's supply chain management software
products ranges from $200,000 for a single product to several million dollars
for the complete product suite. The Company has installed various combinations
of its supply chain management software products at more than 1,000 locations
worldwide. The Company's customers include E.I. du Pont de Nemours and Company,
Frito-Lay, Inc., General Motors Service Parts Operations, Hewlett-Packard
Company, Lever Brothers Company, Levi Strauss & Co., Wal-Mart Stores, Inc. and
Warner Lambert Company.

The Company also offers a wide range of product-related services, including
business operations consulting, change management consulting, end-user and
system administrator education and training, and customer support to help
clients reengineer their operations to take maximum advantage of the Company's
software and effective supply chain management. Customers may obtain support
services and maintenance for an annual fee that ranges from 12% to 18% of the
then-current license fee, depending on the level of support and the size of the
license fee.

The Company licenses its supply chain management solutions in North and
South America through a direct sales organization and in various regions outside
of the Americas primarily through subsidiaries. The

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Company has also begun using indirect sales channels, such as complementary
software vendors, third-party alliances and distributorships.

The Company's principal executive offices are located at 2115 East
Jefferson Street, Rockville, Maryland 20852, and its telephone number is (301)
984-5000.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Selling Stockholders.... 333,207 shares
Common Stock Outstanding............................ 26,010,737 shares(1)
Use of Proceeds..................................... The Company will not receive any proceeds
from the sale of Common Stock offered
hereby.
Nasdaq Symbol....................................... MANU
</TABLE>

- ---------------
(1) At the close of business on June 26, 1998.

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<PAGE> 6

CERTAIN FORWARD-LOOKING STATEMENTS

This Prospectus (including the documents incorporated herein by reference)
contains or may contain certain forward-looking statements and information that
are based on beliefs of, and information currently available to, the Company's
management as well as estimates and assumptions made by the Company's
management; such forward-looking statements are subject to a number of risks and
uncertainties. When used in this Prospectus, words such as "anticipate,"
"believe," "estimate," "expect," "future," "intend," "plan" and similar
expressions as they relate to the Company or the Company's management, identify
forward-looking statements. The forward-looking statements may relate to such
matters as anticipated financial performance, business prospects and strategies,
sales and marketing strategies, markets, current and potential competition,
technological developments, new products, research and development activities,
acquisition activities, partnerships and alliances and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements in
this Prospectus or elsewhere in the future. The risks and uncertainties that may
affect the business, operating results or financial condition of the Company
include those set forth below under "Risk Factors" and the following:

Revenues for any period depend on the volume, timing and size of license
agreements. The Company typically ships software products shortly after license
agreements are signed, and, therefore, does not maintain any material contract
backlog. The volume of licensing agreements depends in part on the ability of
the Company to hire and thereafter to train, integrate deploy its sales force
effectively. The timing of license agreements is difficult to forecast because
software sales cycles are affected by the nature of the transactions, including
the breadth of the solution to be licensed and the organizational and geographic
scope of the licenses. In addition, the timing of license agreements also may be
effected by certain external factors such as general domestic and international
business or economic conditions or competitors' actions. A small variation in
the timing of software licensing transactions, particularly near the end of any
quarter or year, can cause significant variations in software products license
revenues in any period.

The Company believes that the market for supply chain management software
is expanding rapidly. However, if market demand for the Company's products does
not continue to grow rapidly, because of such factors as adverse changes in
domestic or international business and economic conditions or foreign currency
exchange rates, the timely availability and acceptance of the Company's
products, technological change or the effect of competitive products and
pricing, software license revenue growth and consulting, maintenance and other
services revenue growth, margins, or both could be adversely affected. If
competitors make acquisitions of other competitors or establish cooperative
relationships among themselves or with third parties to enhance the ability of
their products to address the supply chain management needs of prospects and
customers, or if certain ERP or other software vendors that have announced plans
to develop or incorporate functionality that could compete with the Company's
products successfully develop and market such functionality, software license
revenue growth could be adversely affected.

There can be no assurance that the Company will be able to attract
complementary software vendors, consulting firms or other organizations that
will be able to market the Company's products effectively or that will be
qualified to provide timely and cost-effective customer support and services. In
addition, there can be no assurance that any organization will continue its
involvement with the Company and its products, and the loss of relationships
with important organizations could materially adversely affect the Company's
results of operations.

These risks, uncertainties and assumptions also relate to the Company's
operations and results of operations, which also may be effected by shifts in
market demand, seasonal fluctuations in demand and sales (caused by, among other
factors, customer budgeting and purchasing patterns and the Company's sales
commission policies) and the timing of product releases. Such risks and
uncertainties may also include, in addition to any uncertainties specifically
identified in the text surrounding forward-looking

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statements, uncertainties with respect to changes or developments in social,
economic, business, industry, market, legal and regulatory circumstances and
conditions and actions taken or omitted to be taken by third parties, including
the Company's stockholders, customers, suppliers, business partners and
competitors. Should one or more of these risks or uncertainties materialize, or
should the underlying estimates or assumptions prove incorrect, actual results
or outcomes may vary significantly from those anticipated, believed, estimated,
expected, intended or planned. Any of these factors could have a material
adverse effect on the Company's business, operating results, financial condition
and cash flows.

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<PAGE> 8

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus.

Potential Fluctuations in Quarterly Results; Seasonality. The Company's
quarterly operating results have varied in the past and might vary significantly
in the future because of factors such as domestic and international business
conditions or the general economy, the timely availability and acceptance of the
Company's products, technological change, the effect of competitive products and
pricing, the effects of marketing pronouncements by competitors or potential
competitors, changes in the Company's strategy, the mix of direct and indirect
sales, changes in operating expenses, personnel changes and foreign currency
exchange rate fluctuations. In addition, the Company has experienced and might
continue to experience from time to time very large, individual license sales
which can cause significant variations in quarterly license revenues.

The Company typically ships software products shortly after license
agreements are signed and, therefore, does not maintain any material contract
backlog. Furthermore, the Company has typically recognized a substantial portion
of its revenues in the last month of a quarter. As a result, software products
revenues in any quarter are substantially dependent on orders booked and shipped
in that month, and the Company cannot predict software products revenues for any
future quarter with any significant degree of certainty.

The Company's software products license revenues are also difficult to
forecast because the market for business application software products is
evolving rapidly, and the Company's sales cycles vary substantially from
customer to customer. The sales cycles depend, in part, on the nature of the
transactions, including the breadth of the solution to be licensed and the
organizational and geographic scope of the licenses. Because the licensing of
the Company's products generally involves a significant capital expenditure by
the customer, the Company's sales process is subject to the delays and lengthy
approval processes that are typically involved in such expenditures. In
addition, the Company expects that sales derived through indirect channels will
be harder to predict in timing and size than for direct sales because there is
less direct contact and influence with the prospective customer. For these and
other reasons, the sales cycle associated with the licensing of the Company's
products varies substantially from customer to customer and typically lasts
between six and twelve months, during which time the Company might devote
significant time and resources to a prospective customer, including costs
associated with multiple site visits, product demonstrations and feasibility
studies, and might experience a number of significant delays, over which the
Company has no control.

The Company's expense levels vary, at least in part, based on its
anticipated future revenues. A substantial portion of the Company's revenues in
any quarter is typically derived from a limited number of large contracts.
Therefore, if revenues in a period are below expectations, operating results are
likely to be adversely affected. Net income might be disproportionately affected
by a reduction in revenues because a proportionately smaller amount of the
Company's expenses varies directly with revenues. As a result of the foregoing
factors, it is likely that in some quarters, the Company's operating results
will be below the published expectations of financial research analysts. In that
event, the price of the Company's common stock would likely be materially
adversely affected. (See "Recent Developments," below.)

The Company has generally realized lower revenues in its first fiscal
quarter (ending in May) than in the immediately preceding quarter. The Company
believes that these fluctuations are caused primarily by customer budgeting and
purchasing patterns and by the Company's sales commission policies, which
compensate personnel for meeting or exceeding annual and other performance
quotas.

Competition. The market for business applications software is highly
competitive and subject to rapid change. Many application software vendors offer
products that are directly competitive with the software products marketed by
the Company. Some of the Company's current and potential competitors have
significantly greater financial, marketing, technical and other competitive
resources than the Company. As a result, they may be able to adapt more quickly
to new or emerging technologies and

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changes in customer requirements, or to devote greater resources to the
development, promotion and sale of their products than can the Company. In
addition, certain ERP system vendors have acquired supply chain management
software companies, products or functionality or have announced plans to develop
new products or to incorporate additional functionality into their current
products that, if successfully developed and marketed, could compete with the
products offered by the Company. Furthermore, current and potential competitors
may make acquisitions of other competitors or may establish cooperative
relationships among themselves or with third parties to increase the ability of
their products to address the supply chain management needs of the Company's
prospective customers. Accordingly, it is possible that new competitors may
emerge and rapidly acquire significant market share. If this were to occur, the
business, operating results, financial condition and cash flows of the Company
could be materially adversely affected.

Dependence on New Products and Rapid Technological Change; Risk of Product
Defects. The market for the Company's products is characterized by rapidly
changing technologies, frequent new product introductions, rapid changes in
customer requirements and evolving industry standards. The Company believes that
its future financial performance will depend in large part on its ability to
maintain and enhance its current product line, develop new products that achieve
market acceptance, maintain technological competitiveness and meet an expanding
range of customer requirements. There can be no assurance, however, that the
Company will be successful in developing and marketing new products or product
enhancements that respond to technological change or evolving industry
standards, that the Company will not experience difficulties that could delay or
prevent the successful development, introduction and marketing of these
products, or that its new products and product enhancements will adequately meet
the requirements of prospective customers and achieve market acceptance. If the
Company is unable, for technological or other reasons, to successfully develop
and introduce new products or product enhancements, the Company's business,
operating results, financial condition and cash flows would be materially
adversely affected.

In addition, software products as complex as those offered by the Company
might contain undetected errors or failures when first introduced or when new
versions are released. There can be no assurance, despite testing by the Company
and by current and prospective customers, that errors will not be found in new
products or product enhancements after commercial release, resulting in loss of
or delay in market acceptance, which could have a material adverse effect upon
the Company's business, operating results, financial condition and cash flows.

Year 2000 Compliance Issues. Many older computer systems and software
products that are still in use today were programmed to accept only two digit
entries in the date code field (i.e., "98" for "1998"). Systems and software
containing two digit date code fields need to be modified or upgraded to
distinguish 21st century dates (e.g., "2002") from 20th century dates (e.g.,
"1902"), in order to avoid the possibility of erroneous results or system
failures.

Many companies might need to modify or upgrade their information systems to
address this "Year 2000" issue. The effects of this issue and of the efforts by
companies to address it are unclear. The Company believes that the purchasing
patterns of customers and prospective customers might be affected by Year 2000
issues. Many companies are expending significant resources to correct or patch
their current software systems for Year 2000 compliance. These expenditures
might result in reduced funds available to purchase software products such as
those offered by the Company. Additionally, Year 2000 problems inherent in a
customer's other software programs might significantly limit that customer's
ability to realize the intended benefits to be derived from the Company's supply
chain management software. These events could result in a material adverse
effect on the Company's business, operating results, financial condition and
cash flows.

The Company utilizes other third party vendor equipment, telecommunication
products, and software products which may or may not be Year 2000 compliant.
Although the Company is currently taking steps to address the impact, if any, of
the Year 2000 issue surrounding such third party products, failure of any

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critical technology components to operate properly may have an adverse impact on
business operations or require the Company to incur unanticipated expenses to
remedy any problems.

Software products as complex as those offered by the Company, whether
developed internally or acquired by the Company, might contain undetected errors
or failures when first introduced or when new versions are released, including
products intended to be Year 2000 compliant. There can be no assurance that the
Company's software products contain or will contain all necessary date code
changes or that errors will not be found in new products or product enhancements
after commercial release, resulting in loss of or delay in market acceptance. In
addition, the Company might experience difficulties that could delay or prevent
the continued successful development and release of products that are Year 2000
compliant or that meet the Year 2000 requirements of customers. If the Company
is unable or is delayed in its efforts to make the necessary date code changes,
there could be a material adverse effect upon the Company's business, operating
results, financial condition and cash flows.

Expansion of Indirect Channels. The Company is building and maintaining
significant working relationships with complementary vendors, such as ERP system
vendors and consulting firms, that the Company believes can play important roles
in marketing the Company's products. The Company is currently investing, and
intends to continue to invest, significant resources to develop these
relationships, which could adversely affect the Company's operating margins.
There can be no assurance that the Company will be able to attract organizations
that will be able to market the Company's products effectively or that will be
qualified to provide timely and cost-effective customer support and service. In
addition, difficulties experienced by these complementary vendors in selling the
Company's products and services may adversely affect the Company's results of
operations. Furthermore, the Company's arrangements with these organizations are
not exclusive and, in many cases, may be terminated by either party without
cause, and many of these organizations are also involved with competing
products. Certain ERP system vendors have acquired supply chain management
software companies, products or functionality or have announced plans to develop
new products or to incorporate additional functionality into their current
products that would compete with the Company's products. Therefore, there can be
no assurance that any organization will continue its involvement with the
Company and its products, and the loss of important organizations could
materially adversely affect the Company's results of operations. In addition, if
the Company is successful in selling products as a result of these
relationships, any material increase in the Company's indirect sales as a
percentage of total revenues would be likely to adversely affect the Company's
average selling prices and gross margins because of the lower unit prices that
the Company receives when selling through indirect channels.

Management of Internal Growth. The Company has recently experienced a
period of rapid growth in revenues that has placed significant strains upon its
management systems and resources. The Company's ability to compete effectively
and to manage future growth, if any, will require the Company to continue to
improve its financial and management controls, reporting systems and procedures
on a timely basis. The Company has recently hired a significant number of
employees, and in order to maintain its ability to grow in the future, the
Company will be required to increase significantly its total number of employees
and to train and manage its employee work force on a timely and effective basis.
There can be no assurance that the Company will be able to do so successfully.
The Company's failure to do so could have a material adverse effect upon the
Company's business, operating results, financial condition and cash flows. See
also "Risk Factors -- Integration of Acquired Businesses."

Integration of Acquired Businesses. The Company investigates potential
candidates for acquisition, joint venture opportunities or other relationships
on an ongoing basis. From time to time, the Company engages in the evaluation
of, and discussions with, one or more such candidates. Acquisitions, including
the acquisition of ProMIRA Software Incorporated in February 1998, and TYECIN in
June 1998, involve the integration of companies that have previously operated
independently. There can be no assurance that the Company will be able to
integrate these or any future employees or operations effectively or that the
Company will realize the expected benefits of these or any future transactions.
In addition, there can be no assurance that the Company will not experience the
loss of key employees of these or any future acquired operations. The process of
integrating acquired employees and operations into the Company might result
9
<PAGE> 11

in unanticipated operational difficulties and expenditures. In addition, there
can be no assurance that the anticipated benefits of any specific acquisition
will be realized.

International Operations. The Company currently conducts operations in a
number of countries in Europe, Asia/Pacific and South America and plans to
conduct operations in additional regions outside the United States, which will
require significant management attention and financial resources and could
adversely affect the Company's operating margins. The Company plans to
accelerate the growth of, and increase its investment in, its international
operations. There can be no assurance that the Company will be able to generate,
maintain or increase demand for the Company's products in new geographic
markets. Certain risks are inherent in international operations. The majority of
the Company's contracts are denominated in U.S. currency. Most of the revenues
from sales outside the United States have been denominated in foreign
currencies, typically the local currency of the Company's business unit. The
Company anticipates that the proportion of its 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 translations. In
connection with transactions denominated in foreign currency, the Company has
taken steps to minimize the risks associated with such foreign currency in the
past and might take such steps in similar circumstances in the future. With
respect to the Company's international sales that are U.S. dollar-denominated,
currency fluctuations could make the Company's products and services less price
competitive. The Company's international sales and operations might be adversely
affected by the imposition of government controls, changes in financial
currencies (such as the unified currency known as the European Monetary Unit),
political and economic instability, difficulties in staffing and managing
international operations and general economic and currency exchange rate
conditions in foreign countries.

Lack of Product Diversification. The Company's future results depend on
continued market acceptance of supply chain management software and services as
well as the Company's ability to continue to adapt and modify this software to
meet the evolving needs of its prospects and customers. Any reduction in demand
or increase in competition in the market for supply chain management software
products could have a material adverse effect on the Company's business,
operating results, financial condition and cash flows.

Dependence Upon Key Personnel. The loss of the services of one or more of
the Company's executive officers could have a material adverse effect on the
Company's business, operating results, cash flows and financial condition. The
Company does not have employment contracts with any of its executive officers
and does not maintain key person insurance. There can be no assurance that the
Company will be able to retain its key personnel. The Company's future success
also depends on its continuing ability to attract, assimilate and retain highly
qualified sales, technical and managerial personnel. Competition for such
personnel is intense, and there can be no assurance that the Company can
attract, assimilate or retain such personnel in the future.

Intellectual Property and Proprietary Rights. The Company regards its
software as proprietary and relies on a combination of trade secret, copyright
and trademark laws, license agreements, confidentiality agreements with
employees, nondisclosure and other contractual requirements imposed on its
customers, consulting partners and others, technical measures and other methods
to protect its proprietary rights in its products. There can be no assurance
that these protections will adequately protect its proprietary rights or that
the Company's competitors will not independently develop products that are
substantially equivalent or superior to the Company's products. In addition, the
laws of certain countries in which the Company's products are or may be licensed
do not protect the Company's products and intellectual property rights to the
same extent as the laws of the United States. Although the Company believes that
its products, trademarks and other proprietary rights do not infringe upon the
proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against the Company.

Possible Volatility of Stock Price. Factors such as announcements of new
products or technological innovations by the Company or its competitors, as well
as quarterly variations in the Company's operating results, have caused and may
cause the market price of the Company's common stock to fluctuate

10
<PAGE> 12

significantly. In addition, the stock market in recent years has experienced
price and volume fluctuations which have particularly affected the market prices
of many high technology stock issues and which have often been unrelated or
disproportionate to the operating performance of such companies. These broad
market fluctuations, as well as general economic conditions, may adversely
affect the market price of the Company's common stock.

Anti-Takeover Protections. The Company's Certificate of Incorporation and
Amended and Restated By-Laws (the "By-Laws") contain provisions which may be
deemed to be "anti-takeover" in nature or effect in that such provisions may
deter, discourage or make more difficult the assumption of control of the
Company by another person by means of a tender offer, merger, proxy contest or
similar transaction. The Certificate of Incorporation authorizes the issuance,
without shareholder approval, of up to 4,620,253 shares of "blank check"
preferred stock, with such designations, rights, preferences, privileges and
restrictions, including voting rights, of such shares as may be determined from
time to time by the Company's Board of Directors. Accordingly, the Board is
empowered, without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could materially adversely
affect the voting power or other rights of the holders of the Common Stock
(including those of the purchasers in the offering made pursuant to this
Prospectus). Holders of the Common Stock issued and sold in the Offering will
have no preemptive rights to subscribe for a pro rata portion of preferred stock
or any other capital stock which may be issued by the Company. In the event of
issuance, such preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control of the
Company. Although the Company has no present intention to issue any shares of
preferred stock, there can be no assurance that the Company will not do so in
the future. See "Description of Capital Stock -- Delaware Law and Certain
Charter and By-Law Provisions."

The By-Laws provide that the Board of Directors is divided into three
classes and for the staggered election of directors to serve for three-year
terms. Each director is subject to removal only for cause upon the vote of at
least 67% of the outstanding shares of Common Stock. Furthermore, the Company is
subject to certain anti-takeover provisions of the General Corporation Law of
Delaware. The existence of these provisions would be expected to have an
anti-takeover effect, including possibly discouraging takeover attempts that
might result in a premium over the market price for the Common Stock. See
"Description of Capital Stock -- Delaware Law and Certain Charter and By-Law
Provisions."

Shares Eligible for Future Sale. Sales of a substantial amount of shares
of Common Stock in the public market after the registration of shares effected
by this Registration Statement could adversely affect the market price of the
Common Stock. At June 26, 1998, the Company had 26,010,737 shares of Common
Stock outstanding. Of such shares, 1,550,000 shares were issued on February 13,
1998, in connection with the acquisition by a subsidiary of the Company of all
of the capital stock of ProMIRA Software Incorporated; however, a total of
794,549 shares either are subject to certain lock-up restrictions or are held in
escrow to secure potential claims by the subsidiary for indemnification and will
not be eligible for resale for periods generally ranging from one to two years
after issuance. In addition, approximately 333,000 shares were issued effective
as of June 1, 1998, in connection with the acquisition of TYECIN. Such shares
constitute all of the shares covered by this Prospectus; however, a total of
approximately 33,000 of such shares are held in escrow to secure potential
claims by the subsidiary for indemnification and will not be eligible for resale
for a period of approximately one year from the date of issuance. In addition, a
total of approximately 274,000 shares of common stock issued in connection with
the Merger to certain persons who then were affiliates of TYECIN may not be
resold prior to the termination of the "Pooling Lock-up Period". (See "Recent
Developments -- Acquisition of TYECIN Systems, Inc." and "Plan of
Distribution.")

At June 26, 1998, there were a total of approximately 6,740,000 registered
shares of Common Stock reserved for issuance upon exercise of outstanding stock
options and options that may be granted in the future under the Company's stock
option plans or for issuance under the Company's Employee Stock Purchase Plan.

11
<PAGE> 13

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the Shares
offered hereby. The Selling Stockholders will receive all of the net proceeds
from the sale of the Shares which they respectively own.

RECENT DEVELOPMENTS

Acquisition of TYECIN Systems, Inc.

As previously reported by the Company in its Current Report on Form 8-K
dated June 2, 1998, on June 1, 1998, the Company, through its direct,
wholly-owned subsidiary, TYECIN Acquisition, Inc. ("TYECIN Acquisition"),
acquired all of the capital stock of TYECIN Systems, Inc., ("TYECIN") based in
Los Altos, California (such transaction being referred to as the "Merger")
pursuant to a certain Agreement and Plan of Merger dated as of June 1, 1998, by
and among Manugistics Group, Inc. ("Manugistics"), TYECIN Acquisition, Randall
A. Hughes and Richard A. Zuanich (the "Merger Agreement"). TYECIN is a provider
of advanced planning and scheduling supply chain management software for the
semiconductor industry. The Merger was accounted for as a pooling of interests.

In connection with the Merger, Manugistics paid or delivered to or for the
benefit of the holders of TYECIN capital stock (the "TYECIN Shareholders") an
aggregate of approximately 333,000 shares of Manugistics Common Stock (the
"Shares"). In addition, Manugistics assumed the then outstanding options to
purchase common stock of TYECIN (the "Options"). The Options were converted to
options to purchase a total of approximately 25,000 Shares common stock of
Manugistics. (The Shares and Options were issued pursuant to exemptions from
registration available under the Securities Act. The Shares are covered by this
Prospectus; the TYECIN Shareholders constitute the initial Selling Stockholders
under this Prospectus.)

Of the approximately 333,000 Shares issued in connection with the Merger, a
total of approximately 300,000 Shares were issued to a paying agent for direct
transfer to the TYECIN Shareholders following the closing of the Merger. Such
Shares generally will be eligible to be resold in the public markets upon the
effectiveness of the Registration Statement of which this Prospectus is a part,
subject, in the case of Shares held by persons who were affiliates of TYECIN
immediately prior to the closing of the Merger, to the expiration of the Pooling
Lock-Up Period. The remaining 33,000 Shares are held in escrow to secure
potential claims by Manugistics, TYECIN and TYECIN Acquisition, for
indemnification under the Merger Agreement and will not be eligible for resale
until the earlier of one year from the Closing or the first public release of
consolidated audited financial statements for the Company and TYECIN. (See "Plan
of Distribution.")

Operating Loss in First Quarter FY 1999

As previously reported by the Company in its Current Report on Form 8-K
dated June 9, 1998, the Company had a net loss of $8,246,000, or $0.32 per basic
and diluted share for the three months ended May 31, 1998.

Shareholder Class Action Lawsuits Filed

As previously reported by the Company in its Current Report on Form 8-K
dated June 18, 1998, a number of lawsuits have been filed in various Federal
District Courts alleging certain disclosure violations under the federal
securities laws against the Company, its Chairman and Chief Executive Officer,
and its Chief Financial Officer, arising from alleged omissions and
misrepresentations by the Company and the two individuals regarding the
Company's business, operations, and financial condition. (Several additional
similar lawsuits were subsequently filed, one of which also names as defendants
an additional executive officer and two directors of the Company and alleges
that such individuals were also responsible for such omissions and
misrepresentations and that they profited by trading on non-public "insider"
information.) Each complaint seeks class action status on behalf of purchasers
of the Company's common stock during certain specified periods (variously from
February 13, 1998 through June 9, 1998) and seeks unspecified monetary damages.
Management believes that the lawsuits are without merit and the Company and the
other defendants intend to defend against the lawsuits vigorously.
12
<PAGE> 14

SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA

Selected supplemental consolidated financial data with respect to the
Company for each of the five fiscal years in the period ended February 28, 1998,
are set forth below. The selected supplemental consolidated financial data give
retroactive effect to the merger with TYECIN and include the combined operations
of the Company and TYECIN for all periods presented (see Note 13(b) to the
Supplemental Consolidated Financial Statements). This data should be read in
conjunction with the Supplemental Consolidated Financial Statements of the
Company and related Notes thereto for the corresponding periods, which are
contained in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Software products................ $107,547 $54,342 $33,111 $26,483 $20,769
Consulting, maintenance and other
services....................... 72,716 45,865 33,865 25,334 18,765
-------- ------- ------- ------- -------
Total revenues.............. 180,263 100,207 66,976 51,817 39,534
Operating expenses:
Cost of software sold............ 11,102 5,011 3,070 3,060 2,992
Cost of consulting, maintenance
and other services............. 33,213 19,618 15,181 12,990 9,518
Sales and marketing.............. 66,228 34,961 22,933 17,491 13,716
Product development.............. 32,794 18,889 12,133 8,127 5,451
General and administrative....... 14,639 9,344 6,664 5,617 4,103
Purchased research and
development(1)................. 47,340 3,697 -- -- --
-------- ------- ------- ------- -------
Total operating expenses.... 205,316 91,520 59,981 47,285 35,780
-------- ------- ------- ------- -------
(Loss) income from operations....... (25,053) 8,687 6,995 4,532 3,754
Other income -- net................. 2,863 1,047 1,144 658 150
-------- ------- ------- ------- -------
(Loss) income before income taxes... (22,190) 9,734 8,139 5,190 3,904
(Benefit) provision for income
taxes............................ (9,025) 5,077 3,064 1,801 1,510
-------- ------- ------- ------- -------
Net (loss) income................... $(13,165) $ 4,657 $ 5,075 $ 3,389 $ 2,394
======== ======= ======= ======= =======
Basic (loss) income per share....... $ (0.56) $ 0.22 $ 0.24 $ 0.17 $ 0.14
======== ======= ======= ======= =======
Shares used in basic share
computation(2)................... 23,484 21,657 20,909 19,982 17,172
======== ======= ======= ======= =======
Diluted (loss) income per share..... $ (0.56) $ 0.20 $ 0.23 $ 0.16 $ 0.13
======== ======= ======= ======= =======
Shares used in diluted share
computation(2)................... 23,484 23,159 21,935 20,880 18,746
======== ======= ======= ======= =======
</TABLE>

- ---------------
(1) During fiscal 1998 and 1997, the Company incurred non-recurring charges to
operations totaling $47.3 million ($28.6 million, net of $18.7 million tax
benefit) and $3.7 million, respectively, in connection with the write-off of
purchased research and development which had not yet reached technological
feasibility and had no alternative future use. The impact of these charges
was to reduce basic and diluted (loss) income per share by $1.22 and $1.09,
respectively, in fiscal 1998, and $.17 and $.16, respectively, in fiscal
1997. Excluding the effect of these non-recurring, non-cash charges, basic
and diluted income per share would have been $.66 and $.59, respectively, in
fiscal 1998, and $.39 and $.36, respectively, in fiscal 1997.

(2) Gives effect to (i) the issuance of 379,747 shares of Series B Convertible
Preferred Stock on June 7, 1993; and (ii) the automatic conversion of all
outstanding shares of Series A and B Convertible Preferred Stock into shares
of common stock during fiscal 1994.

13
<PAGE> 15

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
----------------------------------------------------
1998 1997 1996 1995 1994
-------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................... $ 95,982 $33,443 $29,012 $30,125 $21,400
Total assets........................ 225,215 86,306 62,497 50,035 35,142
Long-term debt, less current
portion.......................... 235 220 182 337 528
Total stockholders' equity.......... 173,746 54,873 43,846 36,866 25,086
</TABLE>

14
<PAGE> 16

SUPPLEMENTAL MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company develops, markets and supports software products for
synchronized supply chain management(TM) and provides related services.
Synchronized supply chain management refers to managing the complex interactions
involved in the flows of products through the supply chain. It involves
forecasting product demand and coordinating the timing of distribution,
manufacturing, procurement and transportation activities to meet this demand,
not only across an entire enterprise, but also among an enterprise and its
suppliers and customers. The Company provides an integrated suite of strategic,
tactical and operational supply chain software planning products, including a
high-level optimizer, that address the four key operational areas of supply
chain management: demand planning, supply planning, manufacturing scheduling and
transportation management. The Company derived approximately 98%, 96% and 92% of
its revenues in fiscal 1998, 1997 and 1996, respectively, from its supply chain
management software and services. Additionally, the Company markets and supports
the STATGRAPHICS personal systems product, which provides statistical tools for
quality management in manufacturing companies.

RESULTS OF OPERATIONS

Revenues:

Software products. The Company's software products license revenues
increased to approximately 60% and 54% of total revenues in fiscal 1998 and
1997, respectively, from 49% in fiscal 1996, primarily because the Company's
increased sales and marketing efforts for supply chain management were
effective, because of increased market acceptance of such products, and because
the Company increased its resources devoted to generating software products
license revenues more rapidly than its resources for producing services
revenues. See "Operating Expenses." Although the percentage of total revenues
represented by software products license revenues has varied in the past and is
likely to continue to vary, the Company anticipates that software products
license revenues are likely to represent 50% to 60% of total revenues for fiscal
1999. See "Certain Forward-Looking Statements."

Supply chain management. Software products license revenues increased in
fiscal 1998 and 1997 because of increases in both the number of licenses and the
average license fee per transaction. This growth resulted from increases in the
Company's sales and marketing resources, increases in the Company's sales
productivity, higher contributions from the Company's international operations
(which grew to 26% and 24% of total software revenues in fiscal 1998 and 1997,
respectively, from 20% in 1996), and expansion into new vertical industries.
Software products license revenues also increased because of increased market
acceptance of the Company's products, including its recently introduced products
and the latest versions of established products. This increased acceptance
resulted in part from the recognition by prospects and customers that they could
rapidly realize significant benefits from effective supply chain management,
which led some companies to license more of the Company's products or to amend
their existing licenses to permit a greater number of users.

15
<PAGE> 17

The Company has historically derived the substantial majority of its
software products license revenues from direct sales. However, the Company has
embarked on a strategy of expanding its product distribution through alliances
with complementary vendors which also led to additional software products
license revenues during fiscal 1998 and 1997. This strategy of developing
alliances is still in its early stages and the number of software license
transactions involving complementary vendors has been relatively small and has
fluctuated. The Company anticipates that software products license revenues
derived from indirect sales by these complementary vendors will continue to
fluctuate. See "Risk Factors" and "Certain Forward-Looking Statements."

Personal systems. Software products license revenues decreased slightly in
fiscal 1998 primarily because the Company decreased the resources dedicated to
STATGRAPHICS and because many prospective customers selected competing products.
As a percentage of total revenues, personal systems software products license
revenues decreased to less than 2%. Software products license revenues decreased
in fiscal 1997 primarily because the Company sold the assets of its APLQPLUS
business in fiscal 1996. The Company believes that demand for STATGRAPHICS will
continue to decrease. See "Certain Forward-Looking Statements."

Consulting, maintenance and other services. Revenues from consulting,
maintenance and other services increased in fiscal 1998 and 1997 principally as
a result of increased demand for supply chain management consulting and
maintenance services from a growing base of customers that have licensed the
Company's supply chain management software.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
------- ------ ------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Supply chain management................... $71,979 60% $45,041 38% $32,666
Percentage of total revenues............ 39.9% 44.9% 48.8%
Personal systems and other................ $ 737 -11% $ 824 -31% $ 1,199
Percentage of total revenues............ 0.4% 0.8% 1.8%
------- --- ------- --- -------
Total consulting, maintenance
and other services revenues... $72,716 59% $45,865 35% $33,865
Percentage of total revenues............ 40.3% 45.8% 50.6%
</TABLE>

Supply chain management. Revenues from consulting and other services
increased in fiscal 1998 and 1997 because of: (1) new clients licensing
increased numbers of products and users, which generally leads to implementation
and other consulting services, and (2) established clients licensing additional
products and users, which also generates further demand for consulting services.
Consulting revenues also increased in fiscal 1998 due to additional
contributions from the Company's international operations, including consulting
services provided by employees who joined the Company in June 1997 in connection
with the Company's acquisition of Synchronology Group Limited ("SGL"). See Note
4 of Notes to the Supplemental Consolidated Financial Statements.

Maintenance revenues increased in fiscal 1998 and 1997 following the
increase in the installed base of customers that have licensed the Company's
software products and entered into maintenance contracts. Maintenance revenues
tend to track software products sold in prior periods. In the past three fiscal
years, approximately 90% to 95% of customers with maintenance contracts have
renewed these contracts.

Personal systems. Consulting, maintenance and other services revenues
decreased in fiscal 1998 and 1997 because of a decline in maintenance revenues.
This decline followed the erosion of the installed base of STATGRAPHICS users,
which resulted from customers and prospective customers having selected
competing products and from the Company's sale of the assets of its APLQPLUS
business in fiscal 1996.

OPERATING EXPENSES:

General. In fiscal 1999, the Company plans to continue to incur relatively
high levels of both sales and marketing expenditures and product development
expenditures as it pursues its strategies of

16
<PAGE> 18

expanding its business into new geographic and vertical markets, expanding its
distribution through alliances, and rapidly developing and delivering new
product features and functions. The percentage of revenues represented by these
items may vary because the Company's total quarterly and annual revenues have
varied in the past and are likely to continue to vary. Also, the percentages of
revenues represented by sales and marketing expenses, product development and
the cost of services can be affected by the total amount of expenses associated
with new employees and by the timing delays between the dates that these
employees begin work and the dates they first become productive after training.
See "Certain Forward-Looking Statements."

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
--------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
-------- ------ ------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cost of software sold.................... $ 11,102 122% $ 5,011 63% $ 3,070
Percentage of total revenues........... 6.2% 5.0% 4.6%
Cost of consulting, maintenance and other
services............................... $ 33,213 69% $19,618 29% $15,181
Percentage of total revenues........... 18.4% 19.6% 22.7%
Sales and marketing...................... $ 66,228 89% $34,961 52% $22,933
Percentage of total revenues........... 36.7% 34.9% 34.2%
Product development...................... $ 32,794 74% $18,889 56% $12,133
Percentage of total revenues........... 18.2% 18.8% 18.1%
General and administrative............... $ 14,639 57% $ 9,344 40% $ 6,664
Percentage of total revenues........... 8.1% 9.3% 9.9%
-------- ------- -------
Total operating expenses excluding
purchased research and development..... $157,976 80% $87,823 46% $59,981
Percentage of total revenues........... 87.5% 87.6% 89.6%
-------- ------- -------
Purchased research and development....... $ 47,340 $ 3,697 $ --
Percentage of total revenues........... 26.3% 3.7% --
-------- ------- -------
Total operating expenses................. $205,316 124% $91,520 53% $59,981
Percentage of total revenues........... 113.9% 91.3% 89.6%
</TABLE>

Cost of software sold. Cost of software sold includes: 1) amortization of
capitalized software development costs, and 2) cost of goods and other, which
includes royalty fees associated with third-party software included with
Manugistics software that is licensed to customers. The Company amortizes
internal computer software development costs over the product's estimated
economic life, generally two years, commencing when a product is first available
for general commercial release. The Company amortizes purchased capitalized
software development costs over a product's estimated economic life, generally
two to five years.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------------------
1998 CHANGE 1997 CHANGE 1996
------- ------ ------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Amortization of capitalized software................ $ 7,560 113% $3,543 59% $2,228
Percentage of software products license revenues.... 7.0% 6.5% 6.7%
Cost of goods and other............................. $ 3,542 141% $1,468 74% $ 842
Percentage of software products license revenues.... 3.3% 2.7% 2.5%
------- ------ ------
Cost of software sold............................... $11,102 122% $5,011 63% $3,070
Percentage of software products license revenues.... 10.3% 9.2% 9.3%
</TABLE>

The cost of software sold increased in fiscal 1998 and 1997 because
amortization increased following the general commercial release of additional
supply chain management software products for which costs had previously been
capitalized, and because cost of goods and other increased. The amortization of
capitalized software development costs has increased in recent years as the
Company has increased its
17
<PAGE> 19

gross product development expenditures for supply chain management software. See
"Product Development." Amortization also increased because the Company wrote off
approximately $1.9 million and $.3 million in fiscal 1998 and 1997,
respectively, of capitalized costs relating to the development of certain prior
versions of its software products which the Company determined exceeded the
future net realizable value as a result of new technologies developed by the
Company or acquired in connection with acquisitions. Cost of goods and other
expenses increased in fiscal 1998 and 1997 primarily because of the increase in
royalty fees as the number of licenses to customers involving third party
software increased.

Cost of consulting, maintenance and other services. The cost of
consulting, maintenance and other services increased in fiscal 1998 and 1997
primarily because the Company added personnel (including SGL employees) to meet
increased demand for its consulting and maintenance services which resulted from
the increased demand for the Company's software products. These additional
employees helped generate the corresponding increase in supply chain management
revenues from consulting, maintenance and other services.

As a percentage of consulting, maintenance and other services revenues, the
cost of consulting, maintenance and other services increased in fiscal 1998
mainly because of the amount of expenses associated with new employees and
because of the timing delays between the dates that these employees began work
and the dates they first become productive after training. In fiscal 1997, the
cost of consulting, maintenance and other services decreased as a percentage of
consulting, maintenance and other services revenues largely because a portion of
the increase in corresponding revenues was generated by product maintenance and
support, which can be provided more efficiently by serving a larger client base,
and because of improved utilization of the Company's consulting employees.

Sales and marketing. Sales and marketing expenses increased in fiscal 1998
and 1997 primarily because the Company added sales and marketing resources in
North and South America, Europe and the Asia/Pacific region, and incurred higher
commissions as a result of increased software products license revenues. In
addition, the Company incurred costs to establish new offices or build up its
presence in certain foreign markets, and increased its marketing expenses in
connection with these new foreign markets and with its expanded product
offerings. As a percentage of total revenues, sales and marketing expenses
increased in fiscal 1998 principally because these expenses increased at a more
rapid rate than total revenues. As a percentage of total revenues, sales and
marketing expenses decreased in fiscal 1997 because total revenues increased
more rapidly than these expenses. As it pursues its strategy of expanding its
business into new geographic markets, new industries and expanded distribution
channels, the Company is continuing to hire and train additional sales and
marketing employees and to make other sales and marketing expenditures. See
"Certain Forward-Looking Statements."

Product development. The Company records product development expenses net
of capitalized software development costs for products which have reached
technological feasibility.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
------- ------ ------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Gross product development costs........... $42,182 64% $25,732 51% $17,048
Percentage of total revenues............ 23.4% 25.7% 25.5%
Less: Capitalized prod. dev. costs........ $ 9,388 37% $ 6,843 39% $ 4,915
Percentage of gross prod. dev. costs.... 22.3% 26.6% 28.8%
------- -- ------- -- -------
Product development expenses.............. $32,794 74% $18,889 56% $12,133
Percentage of total revenues............ 18.2% 18.8% 18.1%
</TABLE>

Gross product development costs for fiscal 1998 and 1997 increased
primarily because the Company employed more developers of supply chain
management software. The Company hired these developers to develop new software
products and new versions of existing products, and to incorporate new
technologies into the Company's product offerings. In fiscal 1998 and 1997, as a
percentage of total revenues, gross product development costs decreased largely
because these expenses did not increase as rapidly as total

18
<PAGE> 20

revenues. The Company plans to continue to make significant product development
expenditures in fiscal 1999 as it pursues its strategy of rapidly developing and
delivering new products, features, functions and integration to software
products of other vendors. See "Certain Forward-Looking Statements."

General and administrative. General and administrative expenses increased
in fiscal 1998 and 1997 primarily because of increased expenses associated with
supporting an organization with more employees and a greater geographic scope.
As a percentage of total revenues, general and administrative expenses decreased
in fiscal 1998 and 1997 because these expenses did not increase as rapidly as
total revenues, in part because the Company was able to leverage its base of
administrative resources to support a larger organizational structure.

Purchased research and development. During the fourth quarter of fiscal
1998, the Company acquired all of the outstanding capital stock of ProMIRA
Software, Inc. ("ProMIRA"), a provider of supply chain planning software for
manufacturers of complex products in industries such as high technology,
electronics and motor vehicles and parts. In that quarter, the Company recorded
a non-recurring charge to operations totaling $47.3 million ($28.6 million, net
of an income tax benefit of $18.7 million) to write off purchased research and
development which had not yet reached technological feasibility and had no
alternative future use. The impact on basic and diluted income per share for
fiscal 1998 was $1.22 and $1.09, respectively. In addition, during the first
quarter of fiscal 1997, the Company acquired all of the outstanding capital
stock of Avyx, Inc. ("Avyx"), a developer and services provider of custom
manufacturing scheduling software. The Company recorded a non-recurring charge
to operations of $3.7 million ($.17 and $.16 basic and diluted income per share,
respectively) to write off purchased research and development which had not yet
reached technological feasibility and had no alternative future use. See Note 4
of Notes to Supplemental Consolidated Financial Statements.

(LOSS) INCOME FROM OPERATIONS:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
-------- ------ ------- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Income from operations excluding purchased
research and development................ $ 22,287 80% $12,384 77% $6,995
Percentage of total revenues............ 12.4% 12.4% 10.4%
Purchased research and development........ $(47,340) $(3,697) $ --
Percentage of total revenues............ N/M N/M
-------- ------- ------
(Loss) income from operations............. $(25,053) N/M $ 8,687 24% $6,995
Percentage of total revenues............ N/M 8.7% 10.4%
</TABLE>

OTHER INCOME -- NET:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
----------------------------------------------
1998 CHANGE 1997 CHANGE 1996
------ ------ ------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Other income -- net.......................... $2,863 173% $1,047 -8% $1,144
Percentage of total revenues............... 1.6% 1.0% 1.7%
</TABLE>

Other income-net includes income from short term investments, interest
income and expense, foreign currency exchange gains or losses, and other gains
or losses. Other income increased in fiscal 1998 primarily due to greater
interest income generated from short-term investments following the investment
of the net proceeds of the public offering of common stock completed in August
1997. In future quarters, the investment of these proceeds will continue to
generate income, pending their application to other uses. Other income decreased
slightly in fiscal 1997 over 1996 because of slight changes in the various
components.

19
<PAGE> 21

PROVISION FOR INCOME TAXES:

The Company recorded a loss in fiscal 1998 as a result of the write-off of
purchased research and development associated with the acquisition of ProMIRA.
As a result of this non-recurring charge, the Company recorded an income tax
benefit of $18.7 million. In fiscal 1997, the effective tax rate represented by
the Company's provision for income taxes was approximately 52%, primarily
because the expenses associated with the Company's write-off of purchased
research and development from the purchase of Avyx were not deductible for tax
purposes. Excluding the effect of this write-off on taxable income, the
effective tax rate for fiscal 1997 would have been approximately 38%. Management
of the Company believes that, in fiscal 1999, the effective tax rate of the
Company on a consolidated basis is likely to be approximately 39%, excluding
non-recurring charges recorded in connection with acquisitions or other
transactions. This estimate is based on current domestic and foreign tax law and
is thus subject to change. See "Forward Looking Statements" and Note 9 of Notes
to Supplemental Consolidated Financial Statements.

NET (LOSS) INCOME AND (LOSS) INCOME PER SHARE:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FEBRUARY 28 OR 29,
--------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
-------- ------ ------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net income excluding purchased research
and development........................ $ 15,488 85% $ 8,354 65% $ 5,075
Percentage of total revenues........... 8.6% 8.3% 7.6%
Less: Purchased research and development,
net of tax benefit in 1998............. $(28,653) $(3,697) $ --
-------- ------- -------
Net (loss) income........................ $(13,165) N/M $ 4,657 -- $ 5,075
Percentage of total revenues........... N/M 4.6% (8)% 7.6%
======== ======= =======
Basic income per share, excluding
purchased research and development..... $ 0.66 69% $ 0.39 63% $ 0.24
Purchased research and development, per
basic share............................ $ (1.22) $ (0.17) $ --
-------- ------- -------
Basic (loss) income per share............ $ (0.56) N/M $ 0.22 --% $ 0.24
======== ======= =======
Shares used in basic share computation... 23,484 21,657 20,909
======== ======= =======
Diluted (loss) income per share.......... $ (0.56) N/M $ 0.20 --% $ 0.23
======== ======= =======
Shares used in diluted share
computation............................ 23,484 23,159 21,935
======== ======= =======
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
-------------------------------------------------
1998 CHANGE 1997 CHANGE 1996
------- ------ ------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Working capital........................... $95,982 186% $33,443 16% $29,012
Cash, cash equivalents and marketable
securities.............................. $82,137 266% $22,465 -8% $24,441
</TABLE>

The Company has historically financed its growth primarily through funds
generated from operations and through proceeds from offerings of capital stock.
The increase in working capital at February 28, 1998 and 1997 resulted
principally from increases in (1) the Company's cash and marketable securities,
largely as

20
<PAGE> 22

a result of the Company's sale of 1.6 million shares of common stock in August
1997, (2) the Company's cash flows from operations and (3) accounts receivable,
which resulted from the increases in software products and services revenues,
and which more than offset decreases resulting from the Company's payments in
connection with the agreement with IRI in March 1997, the acquisition of SGL in
June 1997 and the acquisition of ProMIRA in February 1998. See Note 4 of Notes
to Supplemental Consolidated Financial Statements.

The Company's operating activities provided cash of $30.1 million, $13.7
million and $10.3 million in fiscal 1998, 1997 and 1996, respectively. Operating
cash flows increased in fiscal 1998 primarily because the increase in operating
income before non-cash expenses (including the write-off of purchased research
and development in connection with the acquisition of ProMIRA in February 1998
and depreciation and amortization) and increases in accounts payable, accrued
liabilities and accrued compensation more than offset increases in accounts
receivable, non-cash expenses and deferred income taxes. Operating cash flows
increased in fiscal 1997 largely because the cash flows resulting from net
income were augmented by increases in non-cash expenses and increases in
deferred revenues, accrued compensation, other accrued liabilities and income
taxes payable, and were not fully offset by increases in accounts receivable.

At February 28, 1998, accounts receivable were $59.6 million, compared to
$38.4 million at February 28, 1997, primarily as a result of increases in the
number and size of software license transactions. Deferred revenue increased
from $14.4 million to $18.5 million, principally because of growth in deferred
maintenance revenue as a result of increased licensing activity. At February 28,
1997, accounts receivable were $38.4 million, compared to $20.0 million at
February 29, 1996, primarily as a result of increases in the number and size of
software license transactions. Deferred revenue increased from $7.1 million to
$14.4 million because of growth in software licensing activity and increases in
related services and maintenance revenue.

Investing activities used cash of $86.2 million, $13.7 million and $9.8
million in fiscal 1998, 1997 and 1996, respectively. In fiscal 1998, investing
activities used cash largely as a result of the purchase of marketable
securities using proceeds from the public offering of common stock completed in
August 1997. In fiscal 1998 and 1997, sales of marketable securities provided
cash, but the amounts provided were more than offset by cash used for purchases
of marketable securities, property and equipment, capitalization of software
development costs and acquisitions. The Company had expenditures for property
and equipment of approximately $16.0 million in fiscal 1998. The Company
anticipates expenditures for property and equipment commensurate with its
anticipated growth fiscal 1999. The Company also used cash to acquire ProMIRA
and SGL, and to enter into an agreement with IRI.

Financing activities provided cash of $67.2 million, $2.4 million and $0.7
million, in fiscal 1998, 1997 and 1996, respectively. In fiscal 1998, cash from
financing activities was derived primarily from the sale of 1.6 million shares
of common stock in an underwritten public offering in August 1997, from
exercises of employee stock options and from the sale of shares pursuant to the
Company's employee stock purchase program. In fiscal 1997, cash from financing
activities was derived primarily from exercises of employee stock options and
from the sale of shares pursuant to the Company's employee stock purchase
program. See Note 6 of Notes to Supplemental Consolidated Financial Statements.

In June 1998, the Company issued approximately 333,000 shares of common
stock in connection with the acquisition of TYECIN. The Company accounted for
the acquisition as a pooling of interests and the Company expects to incur a
non-recurring charge of approximately $3 million in certain expenses related to
this transaction which includes, among other items, severance, legal and
accounting fees. In February 1998, the Company issued 1.55 million shares of
common stock, in connection with the acquisition of ProMIRA. The Company also
paid $5.3 million in cash. The Company accounted for the acquisition as a
purchase transaction and recognized a non-recurring, non-cash charge of $47.3
million to write off purchased research and development. In June 1997, the
Company acquired all of the outstanding stock of SGL for $2.8 million in cash.
The Company accounted for the acquisition as a purchase transaction. In March
1997, the Company entered into agreements with IRI (the "IRI Agreement")
relating to the Company's possible acquisition of certain assets of IRI and the
development of a solution that will

21
<PAGE> 23

incorporate IRI's point-of-sale scanner data into the Company's supply chain
management software. Under the agreements, the Company paid $1.5 million to IRI.

Under the IRI Agreements, the Company agreed to market IRI's point-of-sale
data and received 10-year, exclusive rights among supply chain software vendors
in most geographic markets to incorporate these data. The Company and IRI agreed
to resell certain of each other's products, and the Company might acquire
certain additional assets of IRI (subject to the satisfaction of certain
contingencies).

As part of these agreements, the Company committed that it will generate a
minimum of $16.5 million in revenues for IRI from specified products over
several years, beginning after the occurrence of certain events. This commitment
is subject to the satisfaction of significant contingencies specified in the
agreements. Certain issues have arisen between the Company and IRI relating to
the satisfaction of these contingencies. The Company currently anticipates
satisfactory resolution of these issues and believes that it will be able to
produce a sufficient amount of qualifying revenues to satisfy its commitment.
However, if the Company is unable to generate the minimum annual revenues, to
the extent required under the agreements, it will be obligated to pay to IRI
from its own funds an amount equal to the difference between the qualifying
revenues generated and the required minimum, which could result in a material
decrease in working capital. See "Certain Forward-Looking Statements."

The Company has an unsecured committed revolving credit facility with a
commercial bank. Under the terms of the facility, the Company may request
advances in the aggregate amount of up to $10 million. The Company may make
borrowings under the facility for short-term working capital purposes or for
acquisitions (acquisition-related borrowings are limited to $7.5 million per
acquisition). The facility contains certain financial covenants that the Company
believes are typical for a facility of this nature and amount. This facility
will expire in September 1998, unless renewed. There were no amounts outstanding
under this facility at February 28, 1998.

The Company is continuing to take steps to ensure its products, internal
systems and infrastructure are Year 2000 compliant. The Company released an
enhancement (as part of its normal product development efforts) to its supply
chain management software products in the quarter ending May 31, 1998 that is
the Company's Year 2000 compliant release. In addition, its efforts have
included testing, replacing and updating these systems. Based upon actual
experience to date, the Company continues to evaluate the estimated costs
associated with these efforts. While final cost estimates are not complete, the
Company presently anticipates that it will be able to manage its total Year 2000
transition without any material adverse effect on its results of operations or
financial condition. The Company has expensed approximately $200,000 of Year
2000 costs through fiscal 1998 and estimates that it will incur $1,000,000 and
$300,000 of additional expenses in fiscal 1999 and 2000, respectively.

The Company investigates potential candidates for acquisition, joint
venture opportunities or other relationships on an ongoing basis. Depending on
certain factors, including the amount, nature, method and timing of the
consideration to be paid by the Company, any such acquisitions, transactions or
relationships might result in a decrease in working capital.

The Company believes that existing cash balances, marketable securities,
funds generated from operations and amounts available under the revolving credit
facility will be sufficient to meet its anticipated liquidity and working
capital requirements for the next 12 to 18 months. If the Company decides to
expand its operations more rapidly, to broaden or enhance its products more
rapidly, to acquire businesses or technologies or to make other significant
expenditures to respond to market opportunities or competitive pressures, then
the Company may need additional funds at an earlier time.

As noted above, a number of shareholder class action lawsuits were filed
against the Company and certain of its executive officers and directors in June
1998. (See "Recent Developments -- Shareholder Class Action Lawsuits Filed.")
The ultimate outcome of these lawsuits, as with litigation generally, is
inherently uncertain, and it is possible that one or more of these matters may
be resolved adversely to the Company. The adverse resolution of one or more of
these lawsuits could have a material adverse effect on the Company's business,
operating results, financial condition and cash flows. However, as noted above,
management believes that the lawsuits are without merit and the Company and the
other defendants intend to defend against the lawsuits vigorously.

22
<PAGE> 24

The Company believes that inflation did not have a material effect on its
results of operations in fiscal 1998.

22.1
<PAGE> 25

SELLING STOCKHOLDERS

This Prospectus is to be used in connection with the sale by the Selling
Stockholders of a total of up to 333,207 shares of Common Stock. The Shares to
be sold by the Selling Stockholders were issued to the Selling Stockholders
effective as of June 1, 1998, pursuant to the Merger Agreement, as previously
disclosed in the Company's Current Report on Form 8-K dated June 2. (See "Recent
Developments -- Acquisition of TYECIN Systems, Inc.," above.) The Shares were
issued in transactions exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act.

The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock by the Selling Stockholders as of June 26,
1998; 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 by the Selling
Stockholders in the Merger. [Each Selling Stockholder owns only those shares of
Common Stock which were acquired by such Selling Stockholder in the Merger.] 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 the Company's knowledge, none of the
Selling Stockholders has held any office or maintained any material relationship
with the Company or its affiliates over the past three years, except as set
forth in the notes to the table below with respect to certain individuals who
became officers or managers of Manugistics, Inc., the Company's principal
subsidiary, upon the effectiveness of the Merger.

<TABLE>
<CAPTION>
NAME OF SELLING NUMBER OF SHARES OWNED
STOCKHOLDER PRIOR TO THE OFFERING
--------------- ----------------------
<S> <C>
Ai Chang, Mitchell.......................................... 107
Aisenman, Casey............................................. 61
Allison, Ruth............................................... 145
Andrews, Jerry.............................................. 85
Barr, M. Richard............................................ 1,161
Blanc, Patrick.............................................. 197
Brandenmuehl, Mark.......................................... 3,627
Burdick, Dana............................................... 77
Caune, Mikala............................................... 23
Cole, Peyton................................................ 12,729
Colletta, Lynda............................................. 194
Colton, Mary Jo............................................. 678
Drummond, Mark.............................................. 1,130
Firestine, Robert........................................... 3,405
Fonner, Charles............................................. 9,397
Gereben, Janos.............................................. 39
Hepburn, Paul............................................... 775
Hughes, Diana............................................... 1,163
Hughes, Randall(1).......................................... 174,375
Innotech.................................................... 5,813
Jeffords, David............................................. 89
Khalal, Bilal............................................... 6
Lee, Eliot.................................................. 39
Li, Ginger.................................................. 155
Liu, Chilwel................................................ 8,970
Long, Michael............................................... 967
Massey, Todd................................................ 315
Miao, Sudan................................................. 48
Nalick, Scott............................................... 789
Nilson, Paul................................................ 816
Roarty, Brian............................................... 848
Rojas, Juan................................................. 291
Sabin, Gary................................................. 8,705
Sanders, Gary............................................... 3,391
Sivaprakasam, Anbu.......................................... 85
Stegmann, Thomas............................................ 153
Willis, Calvin.............................................. 5,078
Yu, Jason................................................... 93
Zuanich, Richard(2)......................................... 87,188
</TABLE>

- ---------------
(1) Mr. Hughes is Vice President, Semiconductor of Manugistics, Inc.

(2) Mr. Zuanich is an Engineering Manager of Manugistics, Inc.

23
<PAGE> 26

PLAN OF DISTRIBUTION

In accordance with the terms of the Merger Agreement, Manugistics is
required to register the Shares for resale under the Securities Act at its
expense. The Company intends to keep the Registration Statement, of which this
Prospectus is a part, effective at least until the first to occur of: (i) the
sale of all of the Shares pursuant to such Registration Statement; or (ii) the
eligibility of the Shares to be sold pursuant to Rule 144(k) under the
Securities Act. The TYECIN Shareholders may generally sell or otherwise transfer
the Shares only pursuant to this Prospectus or in accordance with the provisions
of Rule 144 under the Securities Act.

All of the Shares issued in connection with the Merger are covered by this
Prospectus. Of these Shares, a total of approximately 300,000 Shares were issued
to a paying agent for direct transfer to the TYECIN Shareholders following the
Closing of the Merger. Such Shares will be eligible to be resold upon the
effectiveness of the Registration Statement of which this Prospectus is a part.
In addition, a total of approximately 274,000 of the Shares were issued in
connection with the Merger to certain persons who then were affiliates of
TYECIN. Such persons have agreed not to resell such Shares prior to the
publication by the Company of financial results covering at least thirty days of
post-Merger combined operations of the Company and TYECIN (the "Pooling Lock-up
Period").

In addition, a total of approximately 33,000 Shares (the "Escrow Shares")
are to be delivered to an escrow agent to secure potential indemnification
claims of Manugistics, TYECIN Acquisition and TYECIN under the Merger Agreement.
To the extent that Escrow Shares are not subject to indemnification claims on
the various dates when distribution is to occur, the Escrow Shares will be
distributed to the TYECIN Shareholders upon the earlier of one year from the
Closing or the first public release of consolidated audited financial statements
for the Company and TYECIN. The Escrow Shares will be eligible to be resold upon
their release from escrow.

The Common Stock is presently listed for trading on Nasdaq. The sale of the
Shares offered hereunder 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 the Company 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 hereby. 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 might reasonably
be expected to constitute, the manipulation or stabilization of the price of
Common Stock or of any other securities of Manugistics. 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

The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, par value $.002 per share, and 4,620,253 shares of Preferred
Stock, par value $.01 per share.

COMMON STOCK

At June 26, 1998, there were 26,010,737 shares of Common Stock issued and
outstanding and a total of approximately 6,740,000 shares of Common Stock
reserved for issuance upon exercise of outstanding stock options and options
that may be granted in the future under the Company's stock option plans or for
issuance under the Company's Employee Stock Purchase Plan.

24
<PAGE> 27

Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to any preferential dividend rights of
outstanding Preferred Stock. Upon the liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding Preferred Stock.
Holders of Common Stock, as such, have no preemptive, subscription, redemption
or conversion rights. The outstanding shares of Common Stock (including the
Shares) are fully paid and nonassessable. The rights, preferences and privileges
of holders of Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of Preferred Stock which the
Company may designate and issue from time to time.

PREFERRED STOCK

The Board of Directors is authorized, subject to certain limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 4,620,253 shares of Preferred Stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions on the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. The issuance of
Preferred Stock may have the effect of delaying, deferring or preventing a
change of control of the Company.

There are no shares of Preferred Stock issued and outstanding. The Company
has no plans to issue any shares of Preferred Stock.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware, as amended (the "Delaware GCL"). Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
"Business combination" includes mergers, asset sales and other transactions
either caused by the interested stockholder or resulting in a financial benefit
to the interested stockholder which is not shared pro rata with the other
stockholders of the Company. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
within three years did own, 15% or more of the corporation's voting stock. The
statute contains provisions enabling a corporation to avoid the statute'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. The Company has not and does not currently
intend to "elect out" of the application of this statute.

The Certificate of Incorporation contains certain provisions permitted
under the Delaware GCL which eliminate the personal liability of directors for
monetary damages for a breach of the director's fiduciary duty, except for: (i)
breach of a director's duty of loyalty, (ii) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii) the
unlawful payment of dividends, stock purchase or stock redemption, or (iv) any
transaction from which the director derives any improper personal benefit. The
Certificate of Incorporation and By-Laws also contain provisions indemnifying
the Company's directors, officers and employees to the fullest extent permitted
by the Delaware GCL. The Company believes that these provisions will assist the
Company in attracting and retaining qualified individuals to serve as directors,
officers and employees. The Certificate of Incorporation provides that a
director's liability shall be eliminated or limited to the fullest extent
permitted by the Delaware GCL, as amended from time to time.

25
<PAGE> 28

The By-Laws provide for the division of the Board of Directors into three
classes as nearly equal in number as possible with staggered three-year terms.
The classification of the Board of Directors could make it more difficult for a
third party to acquire, or discourage a third party from attempting to acquire,
control of the Company. Any director may be removed only for cause and only by
the vote of at least 67% of the shares entitled to vote for the election of
directors.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Boston EquiServe,
Canton, Massachusetts.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Dilworth Paxson LLP, Philadelphia, Pennsylvania. Joseph
H. Jacovini, Chairman and a member of Dilworth Paxson LLP, is a director of the
Company and, at June 26, 1998, was the beneficial owner of 72,000 shares of
Common Stock (including 2,000 shares held by his spouse and a total of 22,664
shares issuable upon exercise of certain options). Other members of Dilworth
Paxson LLP own a total of approximately 2,400 shares of Common Stock.

EXPERTS

The consolidated financial statements included in this Prospectus for the
year ended February 28, 1998 and 1997 and for each of the three years ended
February 28, 1998, except as they relate to the consolidated financial
statements of TYECIN Systems, Inc. as of December 31, 1997 and 1996, and for
each of the three years ended December 31, 1997, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report appearing herein
(which expresses an unqualified opinion and includes an explanatory paragraph
relating to the restatement of the historical consolidated financial statements
for a pooling of interests), and are included in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.

The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended February 28, 1998 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.

The financial statements of TYECIN Systems, Inc., not separately presented
in this Prospectus, have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon appears herein. Such financial statements, to
the extent they have been included in the financial statements of Manugistics
Group, Inc., have been so included in reliance on their report given on the
authority of said firm as experts in auditing and accounting.

26
<PAGE> 29

REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of
Manugistics Group, Inc.:

We have audited the accompanying supplemental consolidated balance sheets
of Manugistics Group, Inc. (the Company) and its subsidiaries as of February 28,
1998 and 1997, and the related supplemental consolidated statements of
operations, stockholders' equity, and cash flows for each of the three years in
the period ended February 28, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements based on our audits. We did not audit the
consolidated balance sheets of TYECIN as of December 31, 1997 and 1996, or the
related statements of income, shareholders' equity and cash flows of TYECIN for
the three years in the period ended December 31, 1997, which consolidated
statements reflect total assets of $2,971,400 and $2,059,100 as of December 31,
1997 and 1996, respectively, and total revenues of $4,597,200, $5,077,000, and
$4,653,800 for the three years ended December 31, 1997, respectively. Those
consolidated statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts included
for TYECIN for 1997, 1996 and 1995, is based solely on the report of such other
auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.

The supplemental consolidated financial statements give retroactive effect
to the merger of Manugistics Group, Inc. and TYECIN Systems, Inc., ("TYECIN"),
on June 1, 1998, which has been accounted for as a pooling of interests as
described in Notes 1 and 13 to the supplemental consolidated financial
statements. Generally accepted accounting principles proscribe giving effect to
a consummated business combination accounted for by the pooling of interests
method in financial statements that do not include the date of consummation.
These financial statements do not extend through the date of consummation;
however, they will become the historical consolidated financial statements of
Manugistics Group, Inc. after financial statements covering the date of
consummation of the business combination are issued.

In our opinion, based on our audits and the report of the other auditors,
the supplemental consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company and its
subsidiaries at February 28, 1998 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended February
28, 1998 in conformity with generally accepted accounting principles applicable
after financial statements are issued for a period which includes the date of
consummation of the business combination.

DELOITTE & TOUCHE LLP

Washington, D.C.
June 19, 1998

F-1
<PAGE> 30

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of TYECIN Systems, Inc.

In our opinion, the consolidated balance sheet and the related consolidated
statements of income, of shareholders' equity and of cash flows of TYECIN
Systems, Inc. and its subsidiary (not presented separately herein) present
fairly, in all material respects, their financial position at December 31, 1997
and 1996, and the results of their operation and their cash flows for each of
the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles. These consolidated financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.

Price Waterhouse LLP
San Jose, California
March 6, 1998, except as to Note 11, which is as of June 1, 1998

F-2
<PAGE> 31

MANUGISTICS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
FEBRUARY 28,
-------------------
1998 1997
-------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 19,891 $ 8,834
Marketable securities..................................... 62,246 13,631
Accounts receivable (net of allowance for uncollectible
accounts -- 1998, $2,099; 1997, $1,235)................ 59,584 38,428
Deferred tax asset........................................ 1,693 1,117
Other current assets...................................... 3,525 1,241
-------- -------
Total current assets.............................. 146,939 63,251
PROPERTY AND EQUIPMENT -- NET............................... 21,142 10,608
NONCURRENT ASSETS:
Software development costs (net of accumulated
amortization -- 1998, $14,651; 1997, $6,375)........... 22,986 9,932
Intangibles (net of accumulated amortization -- 1998,
$2,971; 1997, $1,943).................................. 14,660 2,130
Deferred tax asset........................................ 17,593 --
Other non-current assets.................................. 1,895 385
-------- -------
TOTAL............................................. $225,215 $86,306
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 8,918 $ 4,316
Accrued compensation...................................... 12,419 6,403
Other accrued liabilities................................. 10,834 3,601
Deferred revenue.......................................... 18,546 14,377
Income taxes payable...................................... 240 1,111
-------- -------
Total current liabilities......................... 50,957 29,808
LONG-TERM LIABILITIES....................................... 512 220
DEFERRED TAXES.............................................. -- 1,405
COMMITMENTS AND CONTINGENCIES (Notes 8 and 13)
STOCKHOLDERS' EQUITY:
Preferred stock........................................... -- --
Common stock -- $.002 par value; 100,000,000 shares
authorized; shares issued, 26,719,681 in 1998;
22,725,065 in 1997; shares outstanding, 25,967,171 in
1998; 21,972,555 in 1997............................... 53 45
Additional paid-in capital................................ 171,075 38,819
Retained earnings......................................... 3,102 16,267
Translation adjustment.................................... 365 459
Unrealized loss on marketable securities.................. (132) --
Treasury stock -- 752,510 shares at cost.................. (717) (717)
-------- -------
Total stockholders' equity........................ 173,746 54,873
-------- -------
TOTAL............................................. $225,215 $86,306
======== =======
</TABLE>

See notes to supplemental consolidated financial statements.
F-3
<PAGE> 32

MANUGISTICS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
REVENUES:
Software products........................................ $107,547 $ 54,342 $33,111
Consulting, maintenance and other services............... 72,716 45,865 33,865
-------- -------- -------
Total revenues................................... 180,263 100,207 66,976
-------- -------- -------
OPERATING EXPENSES:
Cost of software sold.................................... 11,102 5,011 3,070
Cost of consulting, maintenance and other services....... 33,213 19,618 15,181
Sales and marketing...................................... 66,228 34,961 22,933
Product development...................................... 32,794 18,889 12,133
General and administrative............................... 14,639 9,344 6,664
Purchased research and development....................... 47,340 3,697 --
-------- -------- -------
Total operating expenses......................... 205,316 91,520 59,981
-------- -------- -------
(LOSS) INCOME FROM OPERATIONS.............................. (25,053) 8,687 6,995
OTHER INCOME -- NET........................................ 2,863 1,047 1,144
-------- -------- -------
(LOSS) INCOME BEFORE INCOME TAXES.......................... (22,190) 9,734 8,139
(BENEFIT) PROVISION FOR INCOME TAXES....................... (9,025) 5,077 3,064
-------- -------- -------
NET (LOSS) INCOME.......................................... $(13,165) $ 4,657 $ 5,075
======== ======== =======
BASIC (LOSS) INCOME PER SHARE.............................. $ (0.56) $ 0.22 $ 0.24
======== ======== =======
SHARES USED IN BASIC SHARE COMPUTATION..................... 23,484 21,657 20,909
======== ======== =======
DILUTED (LOSS) INCOME PER SHARE............................ $ (0.56) $ 0.20 $ 0.23
======== ======== =======
SHARES USED IN DILUTED SHARE COMPUTATION................... 23,484 23,159 21,935
======== ======== =======
</TABLE>

See notes to supplemental consolidated financial statements.
F-4
<PAGE> 33

MANUGISTICS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK
-------------------------
PAR PAID-IN RETAINED TRANSLATION TREASURY
SHARES VALUE CAPITAL EARNINGS ADJUSTMENT STOCK OTHER TOTAL
------ ----- -------- -------- ----------- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 1, 1995........... 10,801 $21 $ 30,952 $ 6,535 $145 $(771) $ (12) $ 36,870
Issuance of common stock....... 42 -- 377 -- -- -- -- 377
Exercise of stock options...... 282 1 538 -- -- -- -- 539
Tax benefit of options
exercised................... -- -- 1,056 -- -- -- -- 1,056
Issuance of treasury stock..... -- -- 211 -- -- 27 -- 238
Amortization of deferred
compensation................ -- -- -- -- -- -- 12 12
Translation adjustment......... -- -- -- -- (240) -- -- (240)
Net income..................... -- -- -- 5,075 -- -- -- 5,075
------ --- -------- -------- ---- ----- ----- --------
BALANCE, FEBRUARY 29, 1996....... 11,125 22 33,134 11,610 (95) (744) -- 43,927
Issuance of common stock....... 50 -- 733 -- -- -- -- 733
Exercise of stock options...... 336 1 1,906 -- -- -- -- 1,907
Tax benefit of options
exercised................... -- -- 2,571 -- -- -- -- 2,571
Fair value of options issued... -- -- 217 -- -- -- -- 217
Compensation expense........... -- -- 69 -- -- -- -- 69
Issuance of treasury stock..... -- -- 211 -- -- 27 -- 238
Translation adjustment......... -- -- -- -- 554 -- -- 554
Net income..................... -- -- -- 4,657 -- -- -- 4,657
Two-for-one stock split........ 11,214 22 (22) -- -- -- -- --
------ --- -------- -------- ---- ----- ----- --------
BALANCE, FEBRUARY 28, 1997....... 22,725 45 38,819 16,267 459 (717) -- 54,873
Issuance of common stock, net
of issuance costs of $652... 3,137 6 120,110 -- -- -- -- 120,116
Issuance of stock options in
connection with
acquisition................. -- -- 1,081 -- -- -- -- 1,081
Exercise of stock options...... 858 2 3,334 -- -- -- -- 3,336
Tax benefit of options
exercised................... -- -- 7,731 -- -- -- -- 7,731
Translation adjustment......... -- -- -- -- (94) -- -- (94)
Unrealized loss on marketable
securities.................. -- -- -- -- -- -- (132) (132)
Net loss....................... -- -- -- (13,165) -- -- -- (13,165)
------ --- -------- -------- ---- ----- ----- --------
BALANCE, FEBRUARY 28, 1998....... 26,720 $53 $171,075 $ 3,102 $365 $(717) $(132) $173,746
====== === ======== ======== ==== ===== ===== ========
</TABLE>

See notes to supplemental consolidated financial statements
F-5
<PAGE> 34

MANUGISTICS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income......................................... $(13,165) $ 4,657 $ 5,075
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization............................. 16,150 8,110 4,610
Write-off of purchased research and development........... 47,340 3,697 --
Allowances for doubtful accounts.......................... 1,510 2,529 732
Deferred income taxes..................................... (19,574) (479) 485
Tax benefit from stock options exercised.................. 7,731 2,571 1,056
Other..................................................... (13) 108 126
Changes in assets and liabilities (net of the effects of
acquisitions):
Accounts receivable.................................... (20,908) (20,720) (5,091)
Other current assets................................... (2,023) 54 (449)
Other noncurrent assets................................ (503) 94 24
Accounts payable and accrued expenses.................. 5,777 (157) 2,888
Accrued compensation................................... 6,016 4,878 (534)
Deferred revenue....................................... 2,470 7,128 1,052
Income taxes payable................................... (716) 1,198 373
-------- -------- -------
Net cash provided by operating activities............ 30,092 13,668 10,347
-------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (Note 4)..................................... (9,637) (3,582) (1,068)
Sale of marketable securities............................. 46,865 7,933 5,570
Purchase of marketable securities and long-term
investments............................................ (96,347) (3,006) (3,662)
Purchase of property and equipment........................ (16,011) (7,284) (5,333)
Capitalization of software development costs.............. (10,274) (6,843) (4,915)
Purchase of software licenses............................. (816) (878) (382)
-------- -------- -------
Net cash used in investing activities................ (86,220) (13,660) (9,790)
-------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payments) under long-term obligations........... 58 (273) (187)
Net proceeds from sale of common stock.................... 63,770 735 378
Proceeds from exercise of stock options................... 3,334 1,907 538
-------- -------- -------
Net cash provided by financing activities............ 67,162 2,369 729
-------- -------- -------
EFFECTS OF EXCHANGE RATES ON CASH BALANCES.................. 23 574 (246)
-------- -------- -------
NET INCREASE IN CASH........................................ 11,057 2,951 1,040
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................ 8,834 5,883 4,843
-------- -------- -------
CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 19,891 $ 8,834 $ 5,883
======== ======== =======
</TABLE>

See notes to supplemental consolidated financial statements.
F-6
<PAGE> 35

MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED FEBRUARY 28, 1998

Manugistics Group, Inc. (the "Company") develops, markets and supports
software products for synchronized supply chain management(TM) and provides
related services. Synchronized supply chain management refers to managing the
complex interactions involved in the flows of products through the supply chain.
It involves forecasting product demand and coordinating the timing of
distribution, manufacturing, procurement, and transportation activities to meet
this demand, not only across an entire enterprise, but also among an enterprise
and its suppliers and customers. The Company provides an integrated suite of
strategic, tactical and operational supply chain software planning products,
including a high-level optimizer, that address the four key operational areas of
supply chain management: demand planning, supply planning, manufacturing
scheduling and transportation management.

In June, 1998, the Company acquired TYECIN Systems, Inc. ("TYECIN"), a
provider of advanced planning and scheduling supply chain management software
for the semiconductor industry (see Note 13).

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation -- The supplemental consolidated financial statements
have been prepared to give retroactive effect to the acquisition of TYECIN
Systems, Inc. on June 1, 1998, which has been accounted for as a pooling of
interests ("pooling"). Generally accepted accounting principles proscribe giving
effect to a merger or business combination accounted for as a pooling in
financial statements that do not include the date of consummation. Although,
these supplemental consolidated financial statements do not extend through the
date of consummation, they will become the Company's historical consolidated
financial statements after financial statements including the consummation date
are issued.

Principles of Consolidation -- The supplemental consolidated financial
statements include the accounts of Manugistics Group, Inc., its wholly-owned
subsidiaries, and its 60% owned subsidiary TYECIN-INNOTECH, a Japanese
corporation. All significant intercompany transactions and balances have been
eliminated. The Company's fiscal year ends on the last day of February. The
supplemental consolidated financial statements combine the Company's fiscal
years which end in February with TYECIN's fiscal years which end in December.

Use of Estimates -- The preparation of supplemental consolidated financial
statements in conformity with generally accepted accounting principles (GAAP)
requires management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the supplemental
consolidated financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results may differ from these
estimates.

Revenue Recognition -- The Company's revenues consist primarily of software
license revenues, consulting service revenues and maintenance revenues. The
Company recognizes revenues in accordance with the provisions of the American
Institute of Certified Public Accountants ("AICPA") Statement of Position
("SOP") 91-1, "Software Revenue Recognition." Software license revenues from
supply chain management products are recognized upon the customer's execution of
a noncancellable license agreement and shipment of the software, provided that
no significant vendor obligations remain outstanding, the license fee is fixed
and amounts are due within one year and collection is considered probable by
management. Software license revenues from the sale of personal systems products
are recognized upon the Company's shipment of the software.

Consulting service revenues are recognized when the services are provided,
generally on a time and materials basis. Consulting service revenues consist
primarily of implementation and training services related to the installation of
the Company's products and do not include significant customization to or
development of the underlying software code. Maintenance revenues are deferred
and recognized ratably over the term of the maintenance contract, typically 12
months.
F-7
<PAGE> 36
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Amounts received in advance of revenue recognition are classified as
deferred revenues.

In October 1997, the AICPA issued SOP 97-2, "Software Revenue Recognition,"
which provides guidance in applying generally accepted accounting principles in
recognizing revenues on software transactions and supercedes SOP 91-1. The
provisions of SOP 97-2 are effective for the Company for transactions entered
into after February 28, 1998. SOP 97-2 requires revenues earned on software
arrangements involving multiple elements to be allocated to each element based
on vendor specific objective evidence of the relative fair values of the
elements. If a vendor does not have evidence of the fair value for all elements
in a multiple-element arrangement, all revenue from the arrangement is deferred
until such evidence exists or until all elements are delivered. In addition, SOP
97-2 requires that the Company have an executed software license agreement, the
license fee be fixed and determinable and collection deemed probable by
management in order to record software license revenue. The Company currently
believes the adoption of SOP 97-2 will not have a material impact on its
consolidated results of operations or financial position; however, because
implementation guidelines for this standard have not yet been issued and a wide
range of potential interpretations are being discussed by the accounting
profession, there can be no assurance that SOP 97-2 will not have a material
impact on the Company's consolidated results of operations or financial
position. In March 1998, the AICPA issued SOP 98-4 which defers the effective
date of a provision of SOP 97-2. This provision currently has no impact to the
Company.

Cash and Cash Equivalents -- The Company considers cash on hand, deposits
in banks, and highly liquid overnight investments as cash and cash equivalents.

Marketable Securities -- The Company has classified its short-term
marketable securities as "available-for-sale." These securities are recorded at
fair value, with gross unrealized gains and losses reported as a component of
stockholders' equity. At February 28, 1998 and 1997, marketable securities
consisted of investments in municipal bonds and other short-term investments
which generally mature in one year or less.

Concentration of Credit Risk -- Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of
investments in marketable securities and accounts receivable. The Company has
policies that limit investments to investment grade securities and that limit
the amount of credit exposure to any one issuer. The Company performs ongoing
credit evaluations of its customers and maintains an allowance for potential
losses, but does not require collateral. The Company's credit risk is also
further mitigated as its customer base is diversified, geographically and by
industry.

Fair Values of Financial Instruments -- The carrying values of cash and
cash equivalents, marketable securities, accounts receivable, and accounts
payable approximate fair value due to the short maturities of such instruments.
The carrying value of long-term debt approximates fair value based on current
rates offered to the Company for debt with similar collateral and guarantees, if
any, and maturities.

Property and Equipment -- Property and equipment is stated at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, ranging from two to ten years. Leasehold
improvements are amortized over the shorter of the lease term or the useful life
of the asset.

Intangibles -- Intangibles include intellectual property, customer lists
and goodwill. Intellectual property and goodwill are amortized on a
straight-line basis and customer lists are amortized using the double declining
balance method. The amortization period for these assets is five years or less,
commencing on the date of acquisition (see Note 4).

Impairment of Long-Lived Assets -- The Company reviews its long-lived
assets, including property and equipment and intangibles, for impairment
whenever events or changes in circumstances indicate that the carrying amount of
the assets may not be fully recoverable. In performing an evaluation of

F-8
<PAGE> 37
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

recoverability, the estimated future undiscounted net cash flows of the assets
are compared to the assets' carrying amount to determine if a write down is
required.

Income Taxes -- The provision for income taxes is based on income
recognized for financial reporting purposes and includes the effects of
temporary differences between such income and income recognized for income tax
purposes. Deferred income taxes reflect the net tax effects of temporary
differences between carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.

Foreign Currency Translation -- Assets and liabilities denominated in
foreign currencies are translated at the exchange rate on the balance sheet
date. The related revenues and expenses are translated at the prevailing
exchange rate during the reporting period. Translation adjustments related to
this process are charged to stockholders' equity.

Net (Loss) Income Per Share -- As of February 28, 1998, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." SFAS No. 128 requires the presentation of basic income per share and,
for companies with potentially dilutive securities, such as options, diluted
income per share. Basic income per share is computed using the weighted average
number of shares of common stock outstanding. Diluted income per share is
computed using the weighted average number of shares of common stock and, when
dilutive, common equivalent shares from options to purchase common stock using
the treasury stock method. The following table sets forth the computation of
basic and diluted income per share:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
----------------------------------------
1998 1997 1996
---------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Weighted average common shares........... 23,484 21,657 20,909
Dilutive potential common shares......... -- 1,502 1,026
-------- ------- -------
Shares used in diluted share
computation............................ 23,484 23,159 21,935
======== ======= =======
Net (loss) income........................ $(13,165) $ 4,657 $ 5,075
======== ======= =======
Basic (loss) income per share............ $ (0.56) $ 0.22 $ 0.24
======== ======= =======
Diluted (loss) income per share.......... $ (0.56) $ 0.20 $ 0.23
======== ======= =======
</TABLE>

The dilutive effect of options for approximately 3.8 million shares has not
been considered in the computation of diluted loss per share in fiscal 1998
because such shares would be anti-dilutive.

Stock-Based Compensation Plans -- The Company accounts for its stock-based
compensation plans in accordance with Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees" and has made the pro
forma disclosures required by SFAS 123, "Accounting for Stock-Based
Compensation" in Note 6.

New Accounting Pronouncements -- In June 1997, SFAS No. 130, "Reporting
Comprehensive Income" was issued and requires that all items which meet the
definition of comprehensive income be reported for the period in which they are
recognized. Comprehensive income includes changes in the balances of items that
are reported directly in a separate component of stockholders' equity on the
consolidated balance sheets, such as foreign currency translation adjustments
and unrealized gains or losses on available-for-sale securities. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997 and the Company
will make the disclosures required by SFAS No. 130 in the first quarter of
fiscal 1999.

In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information" was issued and requires that a public business
enterprise report financial and descriptive information about

F-9
<PAGE> 38
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

its reportable operating segments. Generally, financial information is required
to be reported on the basis used internally for evaluating segment performance
and resource allocation. SFAS No. 131 is effective for fiscal years beginning
after December 15, 1997; however, disclosure is not required in interim
financial statements in the initial year of adoption. Accordingly, the Company
will make the required disclosures for the fiscal year ending February 28, 1999.
The Company is still determining the effect of adopting SFAS No. 131; however,
management does not anticipate that it will have a material impact.

In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." The provisions of SOP
98-1 require that certain costs to develop or obtain internal use software be
capitalized. SOP 98-1 is effective for fiscal years beginning after December
1998 and will be effective for the Company beginning March 1999. The Company is
still determining the effect of adopting SOP 98-1; however, management does not
anticipate that it will have a material impact on the Company's consolidated
results of operations or financial position.

Reclassification of Account Balances -- Certain prior year amounts have
been reclassified for comparability with the current year's financial statement
presentation.

2. FINANCIAL STATEMENT DETAILS

Property and Equipment -- Property and equipment consists of the following:

<TABLE>
<CAPTION>
FEBRUARY 28,
-------------------
1998 1997
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Computer equipment and software............................. $ 22,130 $12,698
Office furniture and equipment.............................. 6,585 4,181
Leasehold improvements...................................... 6,877 2,192
-------- -------
Total............................................. 35,592 19,071
Less accumulated depreciation and amortization.............. (14,450) (8,463)
-------- -------
Property and equipment -- net............................... $ 21,142 $10,608
======== =======
</TABLE>

Other Income -- Net -- Other income -- net, consisted of the following:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-----------------------------
1998 1997 1996
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest Income......................................... $2,774 $1,232 $1,251
Interest Expense........................................ (110) (58) (91)
Other................................................... 199 (127) (16)
------ ------ ------
Other income -- Net..................................... $2,863 $1,047 $1,144
====== ====== ======
</TABLE>

Other includes minority interest related to the Company's 60% owned
subsidiary in fiscal 1998.

3. SOFTWARE DEVELOPMENT COSTS

The Company capitalizes costs incurred in the development of its software
products. Software development costs include certain internally developed costs,
software costs purchased from third parties in connection with acquisitions if
the related software product under development has reached technological
feasibility or if there are alternative future uses for the purchased software,
provided the capitalized amounts will be realized over a period not exceeding
five years, and purchased software license costs for products used in the
development of the Company's products. Costs incurred prior to establishing

F-10
<PAGE> 39
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

technological feasibility are charged to product development expense as
incurred. Software development costs are amortized on a straight line basis over
the estimated economic life of the product, generally two to five years,
commencing with the date the product is first available for general release.

The Company capitalized internally developed software costs of $10,274,000,
$6,843,000, and $4,915,000, and recorded amortization expense of $7,560,000,
$3,543,000, and $2,228,000 for fiscal 1998, 1997, and 1996, respectively. Fiscal
1998 balances reflect $9,940,000 in purchased software development costs
capitalized in connection with the acquisition of ProMIRA Software Inc. (see
Note 4). The Company capitalized approximately $1,116,000, $878,000 and $382,000
and recorded amortization expense of $717,000, $331,000 and $51,000 in fiscal
1998, 1997 and 1996, respectively, relating to purchased software license
product costs.

The amortization expense amounts for fiscal 1998 and 1997 include
write-offs totaling approximately $1,897,000 and $312,000, respectively, of
previously capitalized internal software development costs. These capitalized
costs were deemed to exceed their future net realizable value as a result of new
technologies developed by the Company and acquired in connection with
acquisitions.

4. ACQUISITIONS

Purchases

During fiscal 1998 and 1997, the Company made three acquisitions which have
been accounted for under the purchase method. Accordingly, the purchase prices
were allocated to certain assets and liabilities based on their respective fair
market values. The excess of the purchase price over the estimated fair market
value of the net assets acquired under each transaction was accounted for as
goodwill. Amounts allocated to certain intangibles, including goodwill, are
being amortized on a straight-line basis over five years. The supplemental
consolidated financial statements include the operating results of each
acquisition from the date of the acquisition.

Fiscal 1998 acquisitions

In February 1998, the Company acquired ProMIRA Software, Inc. ("ProMIRA"),
a provider of supply chain planning software for manufacturers of complex
products in industries such as high technology, electronics and motor vehicles
and parts. The total purchase price was approximately $64,500,000, comprised of
cash, 1,550,000 shares of common stock and options to purchase 78,379 shares of
common stock valued at $57.8 million, and acquisition costs. The purchase price
was allocated based on a fair value appraisal obtained from a nationally
recognized independent appraisal firm, and included allocations to certain
intangible assets, such as existing software products which had reached
technological feasibility, and in-process software development efforts which had
not reached technological feasibility ("purchased research and development").
The write-off of purchased research and development resulted in a non-recurring
charge to the Company's operating results, and reduced net income for fiscal
1998 by $28,653,000 ($47,340,000, inclusive of income tax benefits of
$18,687,000), or $1.22 basic and $1.09 diluted income per share.

In June 1997, the Company acquired Synchronology Group Limited, a
closely-held company which provides manufacturing planning and scheduling
consulting services. In March 1997, the Company entered into a definitive
agreement to acquire certain assets of Information Resources, Inc. ("IRI"). The
total purchase prices of these acquisitions were approximately $3,200,000 and
$1,900,000, respectively, and consisted primarily of cash, assumed liabilities,
and acquisition costs.

F-11
<PAGE> 40
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Had the acquisitions made in fiscal 1998 been completed as of March 1,
1996, unaudited pro forma results would have been as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY
--------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Revenues.................................................... $188,893 $103,872
Net loss.................................................... (18,328) (29,025)
Basic and diluted loss per share............................ (0.78) (1.34)
</TABLE>

Such unaudited pro forma amounts are not necessarily indicative of what the
actual consolidated results of operations might have been had the acquisitions
been effective at the beginning of each period presented.

Fiscal 1997 acquisition

In fiscal 1997, the Company acquired Avyx, Inc. ("Avyx"), a custom
developer and services provider of manufacturing scheduling software. The total
purchase price was approximately $3,799,000, primarily comprised of cash,
assumed liabilities and acquisition costs. The purchase price allocation
included allocations to certain intangible assets, such as existing software
products and in-process software development efforts which had not reached
technological feasibility. The Company's write-off of the purchased research and
development resulted in a non-recurring charge to the Company's operating
results, and reduced net income for fiscal 1997 by $3,697,000, or $0.17 basic
and $0.16 diluted income per share. The fiscal 1997 supplemental consolidated
financial statements include the operating results of Avyx from the date of the
acquisition. The results of operations of Avyx prior to the acquisition were not
material to the supplemental consolidated financial statements.

In addition, the Company entered into a three-year non-compete agreement
with two of the principals of Avyx, who did not become employees of the Company,
in exchange for an option to purchase 60,000 shares of the Company's common
stock. The agreement was valued at $217,000, which represented the estimated
fair value of the stock options issued, and is being amortized over the life of
the agreement, which is three years.

5. DEBT AND LONG-TERM LIABILITIES

Long-term obligations consisted of the following:

<TABLE>
<CAPTION>
FEBRUARY 28,
--------------
1998 1997
----- -----
(IN THOUSANDS)
<S> <C> <C>
Notes payable............................................... $ 499 $ 182
Capital lease obligations (see Note 8)...................... 230 229
----- -----
Total............................................. 729 411
Less -- current portion..................................... (494) (191)
----- -----
Subtotal.................................................... 235 220
Other long-term liabilities................................. 277 --
----- -----
Total............................................. $ 512 $ 220
===== =====
</TABLE>

Other long-term liabilities includes minority interest related to the
Company's 60% owned subsidiary in fiscal 1998.

F-12
<PAGE> 41
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Notes Payable -- The Company has several outstanding notes payable which
accrue interest at rates ranging from 1.93% to 7.0% at February 28, 1998.
Principal repayment requirements for each of the five succeeding years beginning
March 1, 1998 are as follows: $494,000 for 1998, $187,000 for 1999, $32,000 for
2000, $9,000 for 2001 and $7,000 for 2002.

Line of Credit -- The Company has an unsecured committed revolving credit
facility with a commercial bank. Under the terms of the facility, the Company
may request advances in an aggregate amount of up to $10,000,000. The Company
may make borrowings under the facility for short-term working capital purposes
or for acquisitions. (Acquisition-related borrowings are limited to $7,500,000
per acquisition). For the interest rate on borrowings, the Company may select
either the prime rate of the lender or either the three-month or six-month
London Interbank Offered Rate (LIBOR) plus one and one-half percent. The
facility contains certain financial covenants that the Company believes are
typical for a facility of this nature and amount, including a covenant not to
pay or declare cash dividends. This facility will expire in September 1998,
unless renewed. There were no outstanding amounts under the credit facility at
February 28, 1998.

6. STOCKHOLDERS' EQUITY

Preferred Stock -- The Company has authorized 4,620,253 shares of $.01 par
value preferred stock. As of February 28, 1998, no preferred shares were
outstanding.

Common Stock -- The Company has authorized 100,000,000 shares of $.002 par
value common stock. No cash dividends on common stock have been declared or paid
in fiscal 1998, 1997, or 1996. On August 18, 1997, the Company completed an
underwritten offering of 1,600,000 newly issued shares of common stock. The
proceeds to the Company were approximately $61,985,000, net of related offering
expenses.

Stock Split -- On May 9, 1997, the Board of Directors of the Company
declared a two-for-one stock split on the Company's common stock, which was paid
in the form of a 100% stock dividend on June 11, 1997 to shareholders of record
as of May 23, 1997. The shares outstanding, weighted average shares, amounts per
share, and all other references to shares of common stock reported have been
restated to give effect to the stock dividend.

Employee Stock Purchase Plan -- In October 1994, the Company adopted an
employee stock purchase plan ("ESPP") that authorizes the Company to sell up to
500,000 shares of common stock to employees through voluntary payroll
withholdings. The stock price to employees is equal to 85% or 95% of the market
price on the lower of either the first or last day of each six-month withholding
period. Payroll deductions may not exceed the lesser of 10% of a participant's
compensation or $25,000 per year. The number of shares purchased under this plan
by employees totaled 69,113 shares, 100,818 shares, and 84,404 shares in fiscal
1998, 1997, and 1996, respectively. The weighted average fair value of shares
purchased in fiscal 1998, 1997, and 1996 was $44.88, $14.09, and $7.13,
respectively.

Stock Options

The Company has an employee stock option plan under which non-qualified
options of up to 6,564,238 shares may be granted to employees to purchase common
stock at prices not less than the fair market value at the time of grant. Under
the plan, prior to 1994, options vested and became exercisable four years from
the date of grant. In 1994, the Company amended the plan such that options
granted after the amendment vest and become exercisable ratably over a four-year
period from the date of grant. The right to exercise the vested options expires
upon the earlier of either ten years (or for options granted prior to 1994,
eleven years) from the date of grant, or within thirty days of termination of
employment. As of February 28, 1998, the Company has granted options on
5,969,260 shares.

F-13
<PAGE> 42
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In 1994, the Company adopted the 1994 Outside Directors Non-Qualified Stock
Option Plan, which provides for the grant of stock options of up to 280,000
shares to the Company's non-employee directors. Under this plan, non-qualified
options are granted annually at the fair market value of the Company's common
stock on the date of grant. The number of options granted annually to each
non-employee director is fixed by the plan. Options become fully exercisable on
the first anniversary of the date of grant. Under this plan, options may be
granted over a ten year period through May 23, 2004. As of February 28, 1998,
the Company has granted options on 192,500 shares.

In January 1996, the Company amended its Employee Incentive Stock Option
Plan, whereby the Company may grant options up to 1,805,950 shares to certain
key executive employees. Options are granted at an exercise price equal to or
greater than the fair market value of the stock on the date of grant and expire
ten years from the date of grant. All options granted vest in accordance with
plan terms. As of February 28, 1998, the Company has granted options on
1,650,000 shares.

In 1994, the Company adopted the 1994 Executive Incentive Stock Option
Plan, whereby the Company may grant options to certain key executive officers of
the Company up to 1,750,000 shares. Options are granted at an exercise price
equal to or greater than the fair market value of the stock on the date of grant
and expire ten years from the date of grant. Options will vest ratably over a
four-year period. As of February 28, 1998, the Company has granted options on
145,750 shares.

TYECIN stock option plans. TYECIN's Board of Directors adopted and the
shareholders approved incentive stock option plans for employees and
nonqualified stock option plans for employees and consultants. Under these
plans, options have been granted at prices not less than 85% of the estimated
fair market value of TYECIN's common stock (not less than 100% for incentive
stock options) at the date of grant. The options generally vest over a four year
period. In connection with the acquisition of TYECIN, all options were assumed
by the Company.

A summary of the status of the Company's stock option plans, including
TYECIN's stock option plans, and changes during the fiscal years is presented
below:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
------------------------------------------------------------------------
1998 1997 1996
---------------------- ---------------------- ----------------------
OPTIONS TO OPTIONS TO OPTIONS TO
PURCHASE WTD. AVG. PURCHASE WTD. AVG. PURCHASE WTD. AVG.
SHARES EX. PRICE SHARES EX. PRICE SHARES EX. PRICE
---------- --------- ---------- --------- ---------- ---------
(SHARE AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Outstanding at Beginning of
Year............................ 3,824 $ 6.78 3,353 $ 4.20 2,876 $2.56
Options Granted at Fair Value..... 1,503 36.64 1,324 11.54 1,185 6.67
Options Granted Greater Than Fair
Value........................... 45 26.47 24 8.01 -- --
Exercised......................... (777) 4.34 (653) 3.00 (555) 1.00
Cancelled......................... (174) 16.85 (224) 5.19 (153) 4.45
----- ----- -----
Outstanding at end of year........ 4,421 $16.77 3,824 $ 6.78 3,353 $4.20
===== ===== =====
Exercisable at end of year........ 1,357 1,119 971
===== ===== =====
</TABLE>

F-14
<PAGE> 43
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The weighted average fair value of options granted in fiscal 1998, 1997,
and 1996 was $16.48, $5.19, and $3.51 per share, respectively. A summary of the
weighted average remaining contractual life and the weighted average exercise
price of options outstanding as of February 28, 1998 is presented below:

<TABLE>
<CAPTION>
NUMBER WEIGHTED AVG. NUMBER WEIGHTED
RANGE OF OUTSTANDING REMAINING WEIGHTED AVG. EXERCISABLE AVG. EXERCISE
EXERCISE PRICES AT 2/28/98 CONTRACTUAL LIFE EXERCISE PRICE AT 2/28/98 PRICE
- --------------- ----------- ---------------- -------------- ----------- -------------
(SHARE AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
$ 0.52-$ 4.50 926 5.34 $ 2.84 793 $ 2.60
4.63- 7.56 1,030 7.53 6.53 319 6.74
7.63- 17.53 922 8.44 10.82 211 10.36
17.69- 42.31 1,335 9.19 33.65 34 21.83
42.63- 47.13 208 9.71 44.10 -- --
------------- ----- ---- ------ ----- ------
$ 0.52-$47.13 4,421 7.89 $16.77 1,357 $ 5.37
===== =====
</TABLE>

Stock-Based Compensation

As permitted under SFAS No. 123, the Company continues to account for
stock-based compensation to employees in accordance with APB Opinion No. 25,
under which no compensation expense is recognized, since the exercise price of
options granted is equal to or greater than the fair market value of the
underlying security on the grant date. Pro forma information regarding net
income and income per share is required by SFAS No. 123, which uses the fair
value method. The fair value of the Company's stock-based awards to employees
was estimated as of the date of grant using the Black-Scholes option pricing
model. Limitations on the effectiveness of the Black-Scholes option valuation
model include that it was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable and
that the model requires the use of highly subjective assumptions including
expected stock price volatility. Because the Company's stock-based awards to
employees have characteristics significantly different from those of traded
options and because changes in the subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of its
stock-based awards.

Had compensation cost for these plans been recorded, the Company's net
income and income per share amounts would have been as follows:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
----------------------------------------
1998 1997 1996
---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Net (loss) income............................... $(19,250) $2,912 $4,412
Basic (loss) income per share................... $ (0.82) $ 0.13 $ 0.21
Diluted (loss) income per share................. $ (0.82) $ 0.13 $ 0.20
</TABLE>

The increase in the fair value of stock options granted in 1998 resulted
primarily from a significant increase in the price of the Company's common stock
during fiscal 1998 from fiscal 1997. Because the SFAS No. 123 method of
accounting has not been applied to options granted prior to March 1, 1995, the
resulting pro forma compensation cost may not be representative of that to be
expected in future years. Additionally, the fiscal 1998, 1997, and 1996 pro
forma amounts include $435,000, and $279,000, and $173,000, respectively,
related to the purchase discount offered under the employee stock purchase plan.

F-15
<PAGE> 44
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The fair value of options granted was estimated assuming no dividends and
using the following weighted-average assumptions:

<TABLE>
<CAPTION>
OPTIONS ESPP
---------------------------------------------- ----------------------
1998 1997 1996 1998 1997 1996
-------------- -------------- -------------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Risk-free interest rates... 6.20-6.59% 5.44-5.73% 6.68-7.08% 5.65% 5.67% 6.44%
Expected term.............. 2.62-7.69 yrs 1.54-4.51 yrs 1.54-4.77 yrs 6 mos 6 mos 6 mos
Volatility................. 0.6038 0.6358 0.6910 0.6044 0.6562 0.6910
</TABLE>

7. RETIREMENT PLANS

The Company has two defined contribution retirement savings plans (one in
the U.S. and another in the U.K.) under the terms of which the Company matches a
percentage of the employees' qualified contributions. New employees are eligible
to participate in the plans upon completing one month of service. The Company's
contribution to the plans totaled $1,045,000, $535,000 and $337,000 for fiscal
1998, 1997 and 1996, respectively.

The Company is not obligated under any other post-retirement benefit plans.

8. COMMITMENTS AND CONTINGENCIES

Commitments -- The Company leases office space, office equipment, and
automobiles under operating leases and various computer and other equipment
under capital leases. Property acquired through capital leases amounted to
$884,000 and $830,000 at February 28, 1998 and 1997, respectively, and has been
included in computer equipment and software (Note 2). Total accumulated
amortization relating to these leases was $716,000 and $576,000 as of February
28, 1998 and 1997, respectively.

Rent expense for operating leases for fiscal 1998, 1997 and 1996 was
approximately $7,754,000, $4,723,000, and $3,894,000, respectively. The future
minimum lease payments under these capital and operating leases for each of the
succeeding years beginning March 1, 1998 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
(IN THOUSANDS)
<S> <C> <C>
1999........................................................ $195 $ 8,025
2000........................................................ 32 6,061
2001........................................................ 9 4,158
2002........................................................ 9 3,415
2003........................................................ 7 840
---- -------
Total minimum lease payments...................... $252 $22,499
==== =======
Less amount representing interest........................... (22)
----
Present value of net minimum lease payments................. $230
====
</TABLE>

The Company has collaborative arrangements with various parties relating to
product development and joint marketing programs. The Company has also entered
into an agreement with a third party under which the Company has guaranteed
certain revenue levels to the third party in the aggregate amount of $16,500,000
over several years. In the event that the activities performed by the Company do
not meet the minimum amounts, the Company may be obligated to pay the
difference. Certain issues have arisen between the Company and the third party
relating to the satisfaction of these contingencies. The Company

F-16
<PAGE> 45
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

anticipates satisfactory resolution of these issues and believes it will be able
to meet the revenue levels. Accordingly, the Company does not expect to be
obligated to make such payments.

Contingencies -- In the ordinary course of business, the Company may be a
party to legal proceedings and claims. In addition, from time to time, the
Company may have contractual disagreements with certain customers concerning the
Company's products and services. The Company has established accruals related to
such matters that are probable and reasonably estimable. In management's
opinion, any liability that may ultimately result from the resolution of these
matters in excess of amounts provided will not have a material adverse effect on
the results of operations, financial condition or cash flows of the Company. The
Company has been in discussions with a customer to resolve a certain claim under
an agreement. While the Company believes there is no merit to such claim, this
matter is subject to various uncertainties and may be resolved unfavorably to
the Company.

9. INCOME TAXES

Income Tax Provision -- The components of the (benefit) provision for
income taxes are as follows:

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
--------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal............................................. $ 7,522 $3,518 $1,558
State............................................... 2,069 375 400
Foreign............................................. 710 1,063 760
-------- ------ ------
Total current provision..................... 10,301 4,956 2,718
-------- ------ ------
Deferred:
Federal............................................. (18,891) (419) 850
State............................................... 18 521 (46)
Foreign............................................. (453) 19 (458)
-------- ------ ------
Total deferred (benefit) provision.......... (19,326) 121 346
-------- ------ ------
Total (benefit) provision for income
taxes..................................... $ (9,025) $5,077 $3,064
======== ====== ======
</TABLE>

The income tax benefits related to the exercise of stock options reduce
taxes currently payable and are credited to additional paid-in capital. Such
amounts were approximately $7,731,000, $2,571,000, and $1,056,000, for fiscal
1998, 1997, and 1996, respectively.

F-17
<PAGE> 46
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred Income Taxes -- The components of the Company's deferred tax
assets and liabilities are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
------------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Uncollectible receivables and sales returns............... $ 813 $ 499
Rent accruals............................................. 205 207
Operating loss carryforwards:
Domestic............................................... 617 672
Foreign................................................ 2,507 1,353
Software revenue recognition.............................. 41 183
Depreciation and amortization............................. 1,345 697
Accrued commissions....................................... 723 --
Purchased research and development write-off.............. 18,774 --
Other temporary differences............................... 552 237
------- -------
Total deferred tax assets.............................. 25,577 3,848
Less: valuation allowance.............................. (1,786) (734)
------- -------
Total deferred tax assets.............................. 23,791 3,114
Deferred tax liabilities:
Software development costs................................ (4,154) (3,313)
Deferred revenue.......................................... (321) --
Other temporary differences............................... (30) (89)
------- -------
Total deferred tax liabilities......................... (4,505) (3,402)
------- -------
Net deferred tax assets (liabilities).................. $19,286 $ (288)
======= =======
</TABLE>

At February 28, 1998, the Company had $1,340,400 of federal, $879,700 of
state and $8,120,000 of foreign net operating loss carry-forwards ("NOLs")
available to offset future taxable income in those respective taxing
jurisdictions. Federal and state NOLs arose from acquisitions and are subject to
limitations. The federal NOLs expire in the years 2006 and 2011 while the state
NOLs expire during fiscal 1999. Approximately $3,467,100 of the foreign NOLs
expire during the fiscal years 2000 to 2003 while the remaining NOLs are
available in perpetuity. The Company considers the earnings of foreign
subsidiaries to be permanently reinvested outside the United States.
Accordingly, no United States income tax on these earnings has been provided.

F-18
<PAGE> 47
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective and Statutory Rate Reconciliation -- The difference between the
income tax provision and the amount computed by applying the federal statutory
income tax rate to pretax accounting income is summarized as follows:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
-------------------------
1998 1997 1996
------- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
(Benefit) provision computed at federal statutory rate... $(7,767) $3,310 $2,767
Increase (reduction) in taxes resulting from:
State and foreign taxes, net of federal benefit........ (1,450) 411 417
Change in valuation allowance.......................... 1,052 291 (31)
Benefit of net operating loss carry forwards and tax
credits............................................. (1,255) -- (55)
Foreign items.......................................... 529 -- --
Purchased research and development write-off........... -- 1,257 --
Tax exempt income...................................... (349) (163) (257)
Other.................................................. 215 (29) 223
------- ------ ------
(Benefit) Provision for income taxes..................... $(9,025) $5,077 $3,064
======= ====== ======
</TABLE>

10. SEGMENT INFORMATION

The Company operates in two industry segments. The Company develops,
markets, and supports software products for synchronized supply chain
management(TM) and provides related services. The Company also markets and
supports the STATGRAPHICS product within its personal systems segment, which
provides statistical tools for quality management in manufacturing companies.

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
INDUSTRY SEGMENTS
Revenues:
Supply chain management.......................... $176,763 $ 96,427 $61,353
Personal systems................................. 3,500 3,780 5,623
-------- -------- -------
$180,263 $100,207 $66,976
======== ======== =======
(Loss) Income from operations:(1)
Supply chain management.......................... 466 15,557 11,489
Personal systems................................. 1,778 1,032 1,184
Corporate........................................ (27,297) (7,902) (5,678)
-------- -------- -------
$(25,053) $ 8,687 $ 6,995
======== ======== =======
Identifiable assets:
Supply chain management.......................... $135,165 $ 60,035 $34,210
Personal systems................................. 848 1,014 1,375
Corporate........................................ 89,202 25,257 26,912
-------- -------- -------
$225,215 $ 86,306 $62,497
======== ======== =======
</TABLE>

F-19
<PAGE> 48
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Capital expenditures:
Supply chain management.......................... $ 10,539 $ 6,682 $ 2,963
Personal systems................................. 19 24 172
Corporate........................................ 6,269 1,456 2,580
-------- -------- -------
$ 16,827 $ 8,162 $ 5,715
======== ======== =======
Depreciation and amortization:
Supply chain management.......................... $ 14,275 $ 7,201 $ 3,713
Personal systems................................. 16 24 426
Corporate........................................ 1,859 885 471
-------- -------- -------
$ 16,150 $ 8,110 $ 4,610
======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
-------------------------------
1998 1997 1996
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
GEOGRAPHIC AREAS
Revenues:
Americas......................................... $152,572 $ 87,969 $61,055
Europe........................................... 35,708 18,273 7,625
Asia............................................. 5,890 -- --
Eliminations..................................... (13,907) (6,035) (1,704)
-------- -------- -------
$180,263 $100,207 $66,976
======== ======== =======
(Loss) income from operations:(1)
Americas......................................... $(23,148) $ 8,067 $ 9,982
Europe........................................... 9,595 6,655 (1,283)
Asia............................................. 2,407 -- --
Eliminations..................................... (13,907) (6,035) (1,704)
-------- -------- -------
$(25,053) $ 8,687 $ 6,995
======== ======== =======
Identifiable assets:
Americas......................................... $289,701 $ 88,212 $58,977
Europe........................................... 22,932 12,161 7,421
Asia............................................. 3,195 -- --
Eliminations..................................... (90,613) (14,067) (3,901)
-------- -------- -------
$225,215 $ 86,306 $62,497
======== ======== =======
</TABLE>

- ---------------
(1) (Loss) income from operations includes non-recurring write-offs of purchased
research and development of $47,340,000 and $3,697,000 in fiscal 1998 and
1997, respectively. Such amounts relate to the supply chain management
segment in the Americas.

F-20
<PAGE> 49
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Domestic and export sales for fiscal 1998, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28 OR 29,
--------------------------------
1998 1997 1996
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
United States..................................... $121,456 $ 71,055 $ 48,484
Europe............................................ 36,322 20,088 9,907
Pacific Rim....................................... 7,247 2,405 1,053
Japan............................................. 6,769 1,726 1,459
Canada............................................ 4,682 3,905 4,056
South America..................................... 3,537 -- --
Other............................................. 250 1,028 2,017
-------- -------- --------
$180,263 $100,207 $ 66,976
======== ======== ========
</TABLE>

No customer accounted for 10% or more of the Company's net sales in fiscal
1998, 1997 or 1996.

11. SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest amounted to approximately $110,000, $55,000 and
$78,000 in fiscal 1998, 1997 and 1996, respectively. Cash paid for income taxes
amounted to approximately $3,478,000, $1,489,000, and $1,016,000 in fiscal 1998,
1997 and 1996, respectively.

Supplemental information of non-cash investing and financing activities is
as follows:

During fiscal 1998, 1997 and 1996, the Company received income tax benefits
of $7,731,000, $2,571,000, and $1,056,000, respectively, relating to the
exercise of stock options. The benefits were recorded as an increase to
additional paid-in capital. During fiscal 1997, the fair value of treasury stock
issued was $238,000. Also during fiscal 1997, options valued at $217,000 were
granted under a non-compete agreement and $345,000 relating to a leased asset
and obligation was capitalized. During fiscal 1996, a $294,000 note receivable
was recorded relating to an asset divestiture, a $714,000 liability was recorded
related to the fair value of stock to be issued, and the fair value of treasury
stock issued was $238,000.

F-21
<PAGE> 50
MANUGISTICS GROUP, INC. AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly consolidated financial information for fiscal 1998 and
1997 follows:

<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1998
Total revenues............................ $35,616 $39,160 $42,159 $ 63,328
Purchased research and development
costs................................... -- -- -- 47,340
Operating income (loss)................... 3,114 4,076 5,114 (37,356)
Net income (loss)......................... 2,126 2,788 3,795 (21,875)
Basic income (loss) per share............. $ 0.10 $ 0.12 $ 0.16 $ (0.89)
Shares used in basic share computation.... 22,086 22,990 24,228 24,633
Dilutive income (loss) per share.......... $ 0.09 $ 0.11 $ 0.14 $ (0.89)
Shares used in diluted share
computation............................. 23,630 25,043 26,941 24,633
1997
Total revenues............................ $19,866 $22,308 $24,918 $ 33,115
Purchased research and development
costs................................... 3,697 -- -- --
Operating (loss) income................... (1,810) 2,157 2,971 5,369
Net (loss) income......................... (2,437) 1,457 1,967 3,670
Basic (loss) income per share............. $ (0.11) $ 0.07 $ 0.09 $ 0.17
Shares used in basic share computation.... 21,312 21,539 21,810 21,966
Diluted (loss) income per share........... $ (0.11) $ 0.06 $ 0.08 $ 0.15
Shares used in diluted share
computation............................. 21,312 22,711 23,514 23,683
</TABLE>

Included in the fourth quarter of fiscal 1998 and the first quarter of
fiscal 1997 are non-recurring charges of $47,340,000 and $3,697,000,
respectively, for write-offs of purchased research and development costs in
connection with acquisitions (see Note 4).

13. SUBSEQUENT EVENTS

(a) On March 26, 1998, the Company entered into a lease agreement with a
commercial real estate developer to lease a new office building that will
commence in fiscal 2001 with a lease term of 15 years.

(b) On June 1, 1998, the Company acquired TYECIN by merger for
approximately 333,000 shares of common stock and assumed options to purchase
shares totaling approximately 25,000 shares. The merger was accounted for as a
pooling of interests. Accordingly, the supplemental consolidated financial
statements give retroactive effect to the merger and include the combined
operations of the Company and TYECIN for all periods presented. The supplemental
consolidated financial statements combine the Company's fiscal years which end
in February with TYECIN's fiscal years which end in December. The effect of
excluding the two months is an increase of approximately $250,000 (unaudited) to
retained earnings.

(c) A number of shareholder class action lawsuits were filed against the
Company and certain of its executive officers and directors in June 1998
alleging certain disclosure violations under the federal securities laws. The
ultimate outcome of these lawsuits, as with litigation generally, is inherently
uncertain and it is possible that one or more of these matters may be resolved
adversely to the Company. The adverse resolution of one or more of these
lawsuits could have a material adverse effect on the Company's business,
operating results, financial condition and cash flows. Management believes that
the lawsuits are without merit and the Company and the other defendants intend
to defend against the lawsuits vigorously.

F-22
<PAGE> 51

================================================================================
No person has been authorized in connection with the offering made hereby to
give any information or to make any representations not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or the Selling
Stockholders. This Prospectus does not relate to any securities other than those
described herein or constitute an offer to sell, or the solicitation of an offer
to buy, securities in any jurisdiction where, or to any person to whom, it is
unlawful to make such an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that the information herein is correct as of any time subsequent to
the date hereof or that there has been no change in the affairs of the Company
since such date.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Certain Forward-Looking Statements.... 5
Risk Factors.......................... 7
Use of Proceeds....................... 11
Recent Development.................... 12
Selling Stockholders.................. 23
Plan of Distribution.................. 24
Description of Capital Stock.......... 24
Legal Matters......................... 26
Experts............................... 26
Index to Consolidated
Financial Statements................ F-1
</TABLE>

333,207 SHARES

[MANUGISTICS GROUP LOGO]

COMMON STOCK

------------------------

P R O S P E C T U S
------------------------

, 1998

================================================================================
<PAGE> 52

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the registration of the shares of Common Stock
being made hereby.

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 2,417
---------
Nasdaq National Market Listing Fee.......................... 6,664
---------
Printing Expenses........................................... 18,000*
---------
Legal Fees and Expenses..................................... 30,000*
---------
Accountants' Fees and Expenses.............................. 65,000*
---------
Transfer Agent.............................................. 10,000
---------
Miscellaneous............................................... 2,919*
---------
Total............................................. $ 135,000*
=========
</TABLE>

- ---------------
* Represents the Company's estimate of such expenses.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company has adopted the provisions of Section 102(b)(7) of the Delaware
General Corporation Law (the "Delaware GCL"), which eliminate or limit the
personal liability of a director to the Company or its stockholders for monetary
damages for breach of fiduciary duty under certain circumstances. Furthermore,
under Section 145 of the Delaware GCL, the Company shall indemnify each of its
directors and officers against expenses (including reasonable costs,
disbursements and counsel fees) in connection with any proceeding involving such
person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful. The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Board of Directors, independent legal counsel or
the stockholders of the Company.

The Company's Certificate of Incorporation states that a director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except that this
provision shall not eliminate or limit a director's liability for any breach of
the director's duty of loyalty to the Company or its stockholders, for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, under Section 174 of the Delaware GCL, or for any transaction
from which the director derived an improper personal benefit.

The Company's By-Laws further provide that the Company shall indemnify its
officers, directors and employees to the fullest extent permitted by law. The
By-Laws also permit the Company to purchase insurance on behalf of any such
person against any liability asserted against such person and incurred by such
person in any such capacity, or arising out of such person's status as such,
whether or not the Company would have the power to indemnify such person against
such liability under the foregoing provision of the By-Laws. The Company
maintains such insurance.

II-1
<PAGE> 53

ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1 Amended and Restated Certificate of Incorporation of the
Company(1)
4.1(a) Certificate of Retirement and Elimination (relating to the
Series A and Series B preferred stock of the Company)(2)
4.1(b) Certificate of Amendment to Amended and Restated Certificate
of Incorporation of the Company (effective July 29, 1997)(3)
4.2 Amended and Restated By-Laws of the Company(4)
4.3 Agreement and Plan of Merger dated as of June 1, 1998
5 Opinion of Dilworth Paxson LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Dilworth Paxson LLP(5)
24 Powers of Attorney of certain officers and directors of the
Company(6)
</TABLE>

--------------------
(1) Incorporated by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (Reg. No. 33-65312).
(2) Incorporated by reference to Exhibit 4.1(a) to the Company's
Registration Statement on Form S-3 (Reg. No. 333-31949).
(3) Incorporated by reference to Exhibit 4.1(b) to the Company's
Registration Statement on Form S-3 (Reg. No. 333-31949).
(4) Incorporated by reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (Reg. No. 33-65312).
(5) Included in Exhibit 5.
(6) Included in the signature page to this Registration Statement.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby further undertakes that:

(i) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby further undertakes that:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;

II-2
<PAGE> 54

(2) That, for the purpose of determining liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction, the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 55

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rockville, State of Maryland, on July 1, 1998.

MANUGISTICS GROUP, INC.

By: /s/ WILLIAM M. GIBSON

------------------------------------
WILLIAM M. GIBSON
President, Chief Executive Officer
and
Chairman of the Board of Directors

POWER OF ATTORNEY

Each of the undersigned officers and directors of Manugistics Group, Inc.
whose signature appears below hereby appoints William M. Gibson and Peter Q.
Repetti, jointly and individually, as attorneys-in-fact for the undersigned with
full power of substitution, to executive in his name and on behalf of such
person individually, and in each capacity stated below, one or more amendments
(including post-effective amendments) to this Registration Statement and any
related registration statement under Rule 462(b) as the attorney-in-fact shall
deem appropriate, and to file any such amendment (including exhibits thereto and
other documents in connection herewith) to this Registration Statement or Rule
462(b) registration statement with the Securities and Exchange Commission,
granting unto said attorneys-in-fact, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and conforming all that
said attorneys-in-fact, or either of them, may lawfully do or cause to be done
by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM M. GIBSON Chief Executive Officer, President and July 1, 1998
- --------------------------------------------- Chairman of the Board of Directors
WILLIAM M. GIBSON (Principal executive officer)

/s/ PETER Q. REPETTI Senior Vice President and Chief July 1, 1998
- --------------------------------------------- Financial Officer
PETER Q. REPETTI (Principal financial officer and
principal accounting officer)

/s/ JACK A. ARNOW Director July 1, 1998
- ---------------------------------------------
JACK A. ARNOW

/s/ J. MICHAEL CLINE Director July 1, 1998
- ---------------------------------------------
J. MICHAEL CLINE
</TABLE>

II-4
<PAGE> 56

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LYNN C. FRITZ Director July 1, 1998
- ---------------------------------------------
LYNN C. FRITZ

/s/ JOSEPH H. JACOVINI Director July 1, 1998
- ---------------------------------------------
JOSEPH H. JACOVINI

/s/ WILLIAM G. NELSON Director July 1, 1998
- ---------------------------------------------
WILLIAM G. NELSON

/s/ THOMAS A. SKELTON Director July 1, 1998
- ---------------------------------------------
THOMAS A. SKELTON
</TABLE>

II-5
<PAGE> 57

EXHIBIT INDEX

II-6

<PAGE> 1

EXHIBIT 5

[LETTERHEAD OF DILWORTH PAXSON LLP]

(215) 575-7000

July 1, 1998

The Board of Directors
Manugistics Group, Inc.
2115 East Jefferson Street
Rockville, Maryland 20852

Re: Shares of Common Stock to be
Registered on Form S-3

Dear Sirs:

We have acted as counsel for Manugistics Group, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 to be filed on or about the date hereof by
the Company with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, relating to the public offering of up to a
total of 333,207 shares (the "Shares") of the Company's common stock, par value
$.002 per share. (The form of said Registration Statement, including all
exhibits thereto and all documents incorporated therein by reference, is
referred to below as the "Registration Statement.")

The Shares may be offered and sold from time to time for the account of
certain stockholders of the Company who are referred to in the Registration
Statement as the "Selling Stockholders." The Company issued the Shares to the
Selling Stockholders pursuant to a certain Agreement and Plan of Merger dated as
of June 1, 1998, by and among Manugistics Group, Inc. ("Manugistics"), its
direct, wholly-owned subsidiary TYECIN Acquisition, Inc., Randall A. Hughes and
Richard A. Zuanich (the "Merger Agreement").

In this connection, we have examined: (i) the Company's Amended and
Restated Certificate of Incorporation and Amended and Restated By-laws; (ii) the
resolutions and related minutes of the Company's Board of Directors approving
the Merger Agreement and the transactions contemplated thereby, including the
issuance of the Shares to the Selling Stockholders, and approving the
preparation and filing of the Registration Statement; (iii) the Merger
Agreement; (iv) the Registration Statement; and (v) certain officers'
certificates and such other documents as we have deemed appropriate or necessary
for purposes of rendering the opinions hereinafter expressed.

In rendering the opinions expressed below, we have assumed the authenticity
of all documents and records examined, the conformity with the original
documents of all documents submitted to us as copies and the genuineness of all
signatures.

Based upon and subject to the foregoing, we are of the opinion that the
Shares were, upon delivery against payment therefor at closing under the Merger
Agreement, and are, duly authorized, legally issued, fully paid and
non-assessable.

We are admitted to practice in the Commonwealth of Pennsylvania. We have
made such investigation of the General Corporation Law of the State of Delaware
(the "Delaware GCL") as we have considered appropriate for the purpose of
rendering the opinions expressed above. This opinion is limited to the Federal
law of the United States and the Delaware GCL.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference made to this Firm under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement.

Sincerely,

/s/ DILWORTH PAXSON LLP
--------------------------------------
DILWORTH PAXSON LLP

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement on Form S-3 of our
report dated June 19, 1998 on the Company's supplemental consolidated financial
statements as of February 28, 1998 and 1997 and for each of the three years in
the period ended February 28, 1998 (which expresses an unqualified opinion and
includes an explanatory paragraph relating to the restatement of the historical
consolidated financial statements for a pooling of interests) appearing in the
Prospectus, which is a part of this Registration Statement.

We also consent to the incorporation by reference in this Registration
Statement of our reports dated March 24, 1998 (except Note 13 as to which the
date is March 26, 1998) on the historical consolidated financial statements
appearing in the Annual Report on Form 10-K of Manugistics Group, Inc. for the
year ended February 28, 1998.

We also consent to the references to us under the heading "Experts" in the
Prospectus, which is a part of this Registration Statement.

DELOITTE & TOUCHE LLP

Washington, D.C.
June 29, 1998

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS
FOR TYECIN SYSTEMS, INC.

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated March 6, 1998, except as
to Note 11, which is as of June 1, 1998, related to the consolidated financial
statements of TYECIN Systems, Inc. (not presented separately herein). We also
consent to the reference to us under the heading "Experts" in such prospectus.

Price Waterhouse LLP
San Jose, California
June 30, 1998