i2 Announces First Quarter 2002 Results; Management of Costs Produces Bottom-line Improvement in a Difficult Market Environment
DALLAS--(BUSINESS WIRE)--April 16, 2002--i2 Technologies, Inc.
(Nasdaq:ITWO), the leading provider of dynamic value chain management
solutions, today announced final results for the first quarter of
2002.
On a pro forma basis, the loss per share was $0.07 in the first
quarter of 2002, compared to a loss of $0.08 per share in the previous
quarter and earnings of $0.02 per share in the first quarter of 2001.
Pro forma reporting excludes the accounting impact of amortization of
intangibles and acquired technology, write-offs of acquired in-process
research and development, certain non-recurring items, employer taxes
on stock option exercises, and net gains and losses realized on equity
investments. Under generally accepted accounting principals (GAAP), i2
reported a loss per share of $0.08 in the first quarter of 2002,
compared to losses of $1.40 per share in the previous quarter and
$1.90 per share in the first quarter of 2001.
"The last 12 months have been extremely challenging for i2. Based
on changing economic conditions, we saw a shift in customer IT buying
patterns from large enterprise-wide projects to smaller, tactical
solutions. In addition, our restructuring caused the company to become
very internally focused. This had a negative impact on our sales
execution," said Sanjiv Sidhu, i2's chairman and CEO. "But our vision
and strategy remain sound, and there is a tremendous market
opportunity in front of us. We are taking steps to improve our
execution and strengthen the company for the long term. However, it
may take more than a couple of quarters for these changes to drive
improved top- and bottom-line results."
Total revenues for the first quarter of 2002 were $168 million,
compared to $198 million in the previous quarter and $364 million in
the first quarter of 2001. License revenues for the first quarter
2002, were $59 million, down from $73 million in the previous quarter
and $211 million in the first quarter of 2001.
"Due to continued economic and execution issues, our revenues for
the first quarter fell short of plan," said Bill Beecher, i2's chief
financial officer. "However, we effectively managed costs and were
able to exceed our expectations for total expense reduction. Pro forma
operating expenses decreased by nearly $37 million from last quarter,
and by 40 percent from the first quarter of 2001. With new management,
we believe that for now we must stabilize the organization, improve
execution and focus on reestablishing top-line growth."
During the quarter, i2 won various deals against its competitors
in several industries and geographies. The company achieved wins with
customers such as LG, Mitsubishi Electric, NEC and Nokia in high-tech;
Dillard's, PepsiCo and Shaw's Supermarkets in consumer goods and
retail; and Methanex Corp., Occidental Petroleum and Potash Corp. in
process and chemicals. The company also announced a collaborative
project with Shell Global Solutions to assess the development of a
fully integrated supply chain software package for the downstream oil
industry.
"While the economy as a whole, particularly technology spending,
has yet to show marked signs of improvement, our high-value,
bottom-line enhancing solutions continue to make the short-list of
customer priorities," added Sidhu. "i2 is the recognized leader in the
industry and a trusted partner to our customers who rely on us to help
them solve some of their most challenging problems. Our goal is to
help our customers achieve the highest returns at the lowest risk, in
the shortest amount of time possible."
i2's commitment to customer success remains the company's top
priority. With 77 go-lives in the first quarter of 2002, the company
continues to demonstrate its focus on meeting customer project
commitments. Companies going live on i2 solutions in the quarter
included Bell Helicopter, Bethlehem Steel, Con-Way Logistics,
Motorola, Samsung and Texas Instruments.
First Quarter Highlights
-- Executive Appointments
The executive staff has added three key executives to the team
including Sam Nakane, Ray Greer and Dr. Berhnard Schwister.
Sam Nakane, most recently president of i2 Japan, was promoted
to the position of chief operating officer earlier this month.
Ray Greer joined i2 as executive vice president and president
of Global Network Solutions and Services. As previously
announced, i2 will bolster its management strength in Europe
with the appointment of Dr. Berhnard Schwister as i2's vice
president of Central Europe, effective July 1, 2002.
-- Partnerships
i2 announced its alliance with Telcordia Technologies, the
leading provider of operations support systems and consulting
and engineering services to the telecommunications industry.
Together, the companies plan to deliver an integrated supply
chain solution designed to allow communications service
providers and suppliers to benefit from reduced inventories,
accelerated cost savings, improved customer service and
tighter links with business partners. i2 also recently
recognized the one-year anniversary of its successful
partnership with webMethods. i2 partners with webMethods to
provide integration capabilities to assist companies in
cross-enterprise collaboration enabled by i2's market-leading
dynamic value chain management solutions.
-- Solution Enhancements and Technology Standards
i2 announced the availability of inventory visibility and
exception management capabilities within its i2 Five.Two
collaboration solution. The i2 solution is designed to enable
companies to quickly act on accurate and up-to-date order,
inventory and shipment information, leading to improved
responsiveness. The company also recently affirmed its
commitment to open standards by adopting J2EE standards for
inter-application integration and Java(TM) Authentication and
Authorization Service.
-- i2 PLANET Las Vegas
The company will host i2 PLANET May 13-16 at the Venetian
Hotel in Las Vegas. Executives from world-class companies such
as DaimlerChrysler, IBM, Shell, Sprint, Sun Microsystems,
TaylorMade-adidas Golf and VF Corporation will address General
Session attendees. More than 125 breakout sessions will
feature customer presentations in vertical markets such as
aerospace and defense, automotive and industrial, high-tech,
process and utilities, retail and consumer goods, and
transportation and distribution. For more information visit
planet.i2.com.
Earnings Call Information
Company management will host a conference call today, April 16,
with analysts and investors. The call is scheduled for 4:00 p.m. CST
and will be open to the public via the company's Web site at
i2.com.
A conference call replay will be available following the
conference call for approximately 24 hours. To access the replay, dial
800/475-6701, and enter passcode 631225. The replay will also be
available via the company's Web site at i2.com.
About i2
For more than a decade, i2 has been a leader in supply chain
management. i2 has extended its technology and expertise to Dynamic
Value Chain Management--solutions to help companies collaborate on
decision-making processes not only across functions within a single
company, but across multiple companies. i2 solutions span the value
chain interactions, including customer relationship management, supply
chain management and supplier relationship management. Established in
1988, i2 is the only software solutions provider that measures,
audits, and reports total value provided to its customers, with a
mission to deliver $75 billion in value by 2005. Learn more at
www.i2.com.
i2 Cautionary Language
This press release may contain forward-looking statements that are
indicative of i2 management's belief and opinion at the time of
issuance. These statements are typically indicated by such terms as
"plans to," "will," "believe," "being," "are," and other similar
expressions as they relate to i2, including statements regarding
expectations of future financial and operating results and our ability
to return to profitability, continued demand for our solutions,
improved execution, and our customers' ability to achieve expected
benefits of our software. Such forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ
materially from these expectations. Factors that could cause actual
results to differ include but are not limited to: continued reduction
in the pace of IT spending, general economic conditions, competition,
the failure of our customers to successfully implement our solutions
or to achieve benefits attributable to our products, increased length
of sales cycles, revenue stream volatility as a result of our reliance
on large transactions, decreased visibility into future revenues
growth or weakness, unforeseen expenses we may incur in future
quarters, or the inability to identify expenses that can be
eliminated. In addition, please refer to i2's filings with the
Securities and Exchange Commission (SEC), including the sections
captioned "Forward-Looking Statements" and "Factors That May Affect
Future Results" in Management's Discussion and Analysis of Financial
Condition and Results of Operations, Item 7 of our Form 10-K filed
with the SEC on April 1, 2002 for a more complete discussion of these
risks and uncertainties. i2 assumes no obligation to update the
forward-looking information contained in this news release.
i2 is a registered trademark of i2 Technologies, Inc. and its
subsidiaries.
i2 TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31,
--------------------------
2002 2001
---------- ----------
(Unaudited) (Unaudited)
Revenues:
Software licenses $58,615 $211,132
Services 60,853 100,887
Maintenance 48,946 52,203
---------- ----------
Total revenues 168,414 364,222
Costs and expenses:
Cost of revenues:
Cost of software licenses 16,257 21,811
Amortization of acquired technology 7,722 12,258
Cost of services and maintenance 59,978 90,749
Sales and marketing 62,897 140,629
Research and development 56,005 75,236
General and administrative 20,343 29,699
Amortization of intangibles 3,232 756,700
Write-off of acquired in-process research and
development -- 4,700
Adjustment to prior restructuring charges (257) --
---------- ----------
Total costs and expenses 226,177 1,131,782
---------- ----------
Operating loss (57,763) (767,560)
Other income (expense), net 3,452 (13,537)
---------- ----------
Loss before income taxes (54,311) (781,097)
Income tax benefit (19,552) (6,946)
---------- ----------
Net loss $(34,759) $(774,151)
========== ==========
Loss per common share:
Basic $(0.08) $(1.90)
Diluted $(0.08) $(1.90)
Weighted-average common shares outstanding:
Basic 424,916 408,074
Diluted 424,916 408,074
i2 TECHNOLOGIES, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31,
------------------------
2002 2001
--------- ---------
(Unaudited) (Unaudited)
Revenues:
Software licenses $58,615 $211,132
Services 60,853 100,887
Maintenance 48,946 52,203
--------- ---------
Total revenues 168,414 364,222
Costs and expenses:
Cost of revenues:
Cost of software licenses 16,257 21,811
Amortization of acquired technology -- --
Cost of services and maintenance 59,978 91,086
Sales and marketing 62,897 140,092
Research and development 56,005 75,042
General and administrative 20,343 29,199
Amortization of intangibles -- --
Write-off of acquired in-process research and
development -- --
Adjustment to prior restructuring charges -- --
--------- ---------
Total costs and expenses 215,480 357,230
--------- ---------
Operating income (loss) (47,066) 6,992
Other income (expense), net (2,080) 4,692
--------- ---------
Income (loss) before income taxes (49,146) 11,684
Provision (benefit) for income taxes (17,693) 4,206
--------- ---------
Net income (loss) $(31,453) $7,478
========= =========
Earnings (loss) per common share:
Basic $(0.07) $0.02
Diluted $(0.07) $0.02
Weighted-average common shares outstanding:
Basic 424,916 408,074
Diluted 424,916 451,467
The above pro forma amounts have been adjusted
to exclude the following items:
Amortization of acquired technology $7,722 $12,258
Amortization of intangibles 3,232 756,700
Write-off of acquired in-process research and
development -- 4,700
Employer taxes on stock option exercises -- 894
Adjustment to prior restructuring charges (257) --
Net (gains) losses realized on equity
investments (5,532) 18,229
Income tax effect (1,859) (11,152)
--------- ---------
Net effect of pro forma adjustments $3,306 $781,629
========= =========
i2 TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
March 31, December 31,
2002 2001
---------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $473,443 $538,218
Short-term investments, at fair value 143,597 187,977
Accounts receivable, net 103,361 140,246
Deferred income taxes, prepaids and other
current assets 91,232 95,373
---------- ----------
Total current assets 811,633 961,814
Premises and equipment, net 109,921 129,475
Long-term investments, at fair value 76,072 28,209
Deferred income taxes and other assets 606,647 564,768
Intangibles and goodwill, net 95,453 106,771
---------- ----------
Total assets $1,699,726 $1,791,037
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $43,511 $43,681
Accrued liabilities 193,880 230,037
Accrued compensation and related expenses 57,044 62,176
Deferred revenue 140,268 151,624
---------- ----------
Total current liabilities 434,703 487,518
Other long-term liabilities 459 345
Long-term debt 410,930 410,930
---------- ----------
Total liabilities 846,092 898,793
---------- ----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000
shares authorized, none issued -- --
Series A junior participating preferred
stock, $0.001 par value, 2,000 shares
authorized, none issued -- --
Common stock, $0.00025 par value,
2,000,000 shares authorized, 425,746 and
424,253 shares issued and outstanding 106 106
Additional paid-in capital 10,360,048 10,353,602
Accumulated other comprehensive income
(loss) (6,540) 3,757
Accumulated deficit (9,499,980) (9,465,221)
---------- ----------
Total stockholders' equity 853,634 892,244
---------- ----------
Total liabilities and stockholders'
equity $1,699,726 $1,791,037
=========== ==========
CONTACT:
i2 Technologies, Inc., Dallas
Media Relations
Sue LaDow, 469/357-3027
susan-ladow@i2.com
or
Investor Relations
Brent Anderson, 469/357-6012
brent-anderson@i2.com
SOURCE: i2 Technologies, Inc. |
