>> I've triple checked it. That's exactly what it says.
I think they've mucked it up. Here's itwo's last earnings report, as reported on their website.
DALLAS--(BUSINESS WIRE)--April 18, 2001--i2 Technologies, Inc. (Nasdaq:ITWO), the leading
provider of supply chain and marketplace solutions, announced today its full results for the first
quarter of 2001. License revenues grew 86 percent over the first quarter of 2000 to $211 million
from $114 million, and first quarter 2001 total revenues grew 91 percent to $357 million from $186
million in 2000. Financial results for the first quarter of 2000 do not include the results of Aspect
Development, the acquisition of which was completed on June 9, 2000 and accounted for as a
purchase.
"i2 performed well this quarter despite the beginning of a down cycle in the economy," said Sanjiv
Sidhu, i2 chairman and CEO. "In this slowing economy, where companies are more focused on
bottom-line results and profitability, our customers are realizing the value and efficiencies i2
solutions can create for themselves and their trading partners."
i2 recognized strong license revenues from existing customers in the quarter, especially in the
high-tech sector where companies such as Lucent, Sun Microsystems, Matsushita Electric and
Applied Materials made additional purchases -- a strong sign of continued commitment and
recognition of the value that i2 solutions deliver.
Diluted earnings per share on a pro forma basis were $.02 for the first quarter of 2001, compared
to $.04 in the same period last year. Pro forma earnings exclude amortization of intangibles,
write-off of in-process R&D and acquisition-related expenses, non-recurring items, employer taxes
on stock option exercises and net losses realized on minority investments.
Pro forma operating margin for the first quarter of 2001 was 2 percent as compared to 10 percent
for the same period last year. Pro forma net income for the first quarter of 2001 was $7.5 million,
down from $13 million in the same period last year. As growth continually exceeded expectations
in 2000, the company continued to expand to address anticipated strong demand in 2001. A
sudden and severe decline in market conditions, coupled with this increased cost structure,
caused the company to fall short of its profitability goals for the first quarter.
"It is obvious that the business climate has changed for the worse," said Bill Beecher, i2 CFO.
"On April 2, we announced plans to reduce our workforce by about 10 percent, as part of an effort
to bring our total expenses in line with our current business outlook. We acted swiftly and have
already reduced our staff by over 600. We continue to work throughout the company to reduce
costs as part of our overall restructuring."
Looking Forward
"The company is not changing its business model. We will continue to focus on our fundamental
strategy of offering an integrated one-stop shop for the most comprehensive e-business solutions,
based on an open technology platform and network to support collaboration, commerce and
content," said Sidhu. "We will continue to take calculated risks in order to capitalize on the
strategic opportunities that we face."
"We remain focused on maximizing long-term earnings and cash flow and are very proud that in
our five years as a public company we have never operated at a loss on a pro forma basis.
However, in the short-term, while we are making adjustments to our cost structure and positioning
for an economic upturn, we are expecting a pro forma loss over the next couple of quarters," said
Beecher.
The company believes that revenue for the second quarter of 2001 will be sequentially down. While
the economy remains uncertain and could cause results to vary materially, the company now
expects growth in total revenues this year between 15-20 percent.
Company management will further discuss expectations for future revenue and earnings on the
company's conference call with investors and analysts available at www.i2.com/investors.
"i2 is uniquely positioned in the market as the recognized leader in supply chain management and
the dominant solution provider in supplier relationship management," commented Greg Brady, i2
president. "The company has a commanding lead in order management, content and marketplace
solutions, enabling us to deliver value to our customers today and well into the future. We are
positioning the company to emerge from the current economic down cycle stronger than our
competitors with the best software and e-business solutions to meet our customers' critical
business needs."
Other Highlights
Alliances/partners
i2 announced new or expanded relationships with the following partners this quarter:
IBM, expanding to offer Internet-based order fulfillment platform for large-scale e-business
environments
webMethods, Inc., for an integration platform within the TradeMatrix Network(TM)
Intel Corporation, to accelerate deployment of i2's e-marketplace and supply chain
management applications powered by Intel-based servers
BroadVision, Inc., for a partnership in EMEA (Europe, Middle East and Africa) to deliver
comprehensive e-commerce solutions
Vitalz, to deliver a web-based resource management solution for the health care industry
Furndex, to offer the suite of i2 TradeMatrix(TM) Solutions to the furniture industry
UPS Logistics Technologies, to allow i2 to resell UPS Logistics Technologies' local routing
and route planning solutions
QRS Corporation, to integrate i2 TradeMatrix Solutions with QRS' Tradeweave Retail
Network
The New Health Exchange, to develop a comprehensive online product catalog and content
solution to serve the United States health care supply market
Acquisitions
On March 8, 2001, i2 signed a definitive agreement to acquire RightWorks Corporation, a partner
company in the Internet Capital Group network. RightWorks provides e-procurement and
commerce solutions that will strengthen the i2 TradeMatrix Solutions and i2 TradeMatrix
Platform(TM), enabling i2 to offer the industry's most comprehensive solutions for e-business
transformation.
On March 23, 2001, i2 completed the acquisition of Trade Service Corporation, a leading provider
of maintenance, repair and content and its affiliate ec-Content, Inc., which develops and manages
content for digital marketplaces, e-procurement and syndication. This acquisition was accounted
for as a purchase; accordingly, the results of operations of Trade Service Corporation and
ec-Content have been included with i2's results of operations since March 23, 2001.
Marketplaces
Nine global airlines and three aerospace manufacturers united to form Cordiem, LLC, the aviation
industry's first business-to-business (B2B) exchange and application services provider jointly
owned by buyers and sellers. Cordiem builds on the previous efforts of AirNewco, an airline-led
B2B initiative, and MyAircraft.com, a manufacturer-led exchange. The company partnered with i2
and another provider to deploy its core e-business platform and related solutions, and selected
IBM as its hosting provider.
Technology and Products
i2 introduced an entire suite of solutions designed to optimize each phase of the supply chain to
transform the way companies do business in the new economy. i2's solution footprint enables
companies to streamline and transform all key business processes in their value chain and
includes three decision support solution suites (Supplier Relationship Management - SRM, Supply
Chain Management - SCM, and Customer Relationship Management - CRM), i2 TradeMatrix
Platform, content from i2's Infinite Content(TM), and TradeMatrix Network.
i2 developed an e-learning program to aid in the successful adoption of new e-business processes
and enabling technologies. i2's first e-learning course, titled "Intelligent Supply Chain
Management," provides an overview of the supply chain management process and describes the
individual functions within the SCM process, how they integrate with each other, the goals and
metrics to be defined, and the critical steps to optimize the end-to-end SCM process.
i2 features a value calculator on its web site aimed at helping prospective customers assess the
value their companies could realize using i2 TradeMatrix Solutions. The i2 value calculator
evaluates every implementation area for a company and then formulates ideas for customized
solutions within i2 TradeMatrix and in every portion of the value chain, SRM, SCM and CRM.
Customers
Dillard's Inc. purchased i2's e-business solutions to transform its forecasting processes and
replenishment of basic stock items. With best-in-class supply chain solutions from i2, Dillard's
plans to implement demand planning, retail replenishment planning, and business process
intelligence tools designed to improve its delivery of exceptional customer service.
Hitachi, Ltd. plans to implement i2 TradeMatrix Solutions at select Hitachi divisions to improve
supply chain processes. Experio Solutions, a unit of Hitachi, also plans to provide consulting
services to Hitachi and other leading companies to assist in the implementation of i2 solutions.
Also for first quarter 2001, i2 completed more than 120 go-live projects, spanning a total of 62
companies. These customers represent many vertical industries, including high-tech, consumer
goods, retail, automotive & industrial, metals, paper, oil & gas, chemical, and marketplaces. i2
partnered with several firms for project implementation including Accenture, Cap Gemini Ernst &
Young, IBM and PricewaterhouseCoopers.
Board Members
i2 and Tom Meredith have agreed that he will not seek re-election to the board of directors of i2
due to a conflict of interest with another board of which he is a member.
Conference Call
i2 will host a conference call to further discuss these results at 5:00 p.m. EDT on Wednesday,
April 18, 2001, available via web cast www.i2.com/investors.
About i2
i2 is creating real value for its global e-business customers through its i2 TradeMatrix Solutions,
content, and marketplace platforms. i2 TradeMatrix allows businesses to create both private and
public marketplaces, while improving the efficiencies of all participants. i2 provides a wide variety
of collaborative e-business services for both the early stages and next generation of e-business
adoption, with each service supported by decision optimization, transaction management and
content management solutions. Founded in 1988, i2's mission is to deliver $75 billion in value to
its customers by 2005. i2 is headquartered in Dallas, has more than 5,600 employees and
maintains offices worldwide. Visit i2's Web site at i2.com. i2 is a registered trademark
of i2 Technologies, Inc., as are i2 TradeMatrix, i2 TradeMatrix Solutions, i2 TradeMatrix Platform,
Infinite Content, TradeMatrix Network and the i2 logo design.
i2 Cautionary Language
This press release contains forward-looking statements including expectations of future financial
and operating results, continued demand for the Company's solutions, the Company's ability to
achieve anticipated cost reductions, 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, including but not limited to continued reduction in the pace of IT spending, general
economic conditions, competition, the failure of Company's customers to successfully implement
Company solutions or to achieve benefits attributable to Company products, increased length of
sales cycles, vulnerability to revenue stream volatility as a result of our reliance upon large
transactions, decreased visibility into future revenue growth or weakness, unforeseen expenses
the Company may incur in future quarters, or the inability to identify expenses that can be
eliminated. In addition, please refer to 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 the Form 10-K filed with the SEC on March 29,
2001, 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 TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
For the Three Months Ended
March 31,
------------------------------
2001 2000
------------ ------------
Revenues:
Software licenses $211,132 $113,584
Services 93,223 46,870
Maintenance 52,203 25,826
------------ ------------
Total revenues 356,558 186,280
Costs and expenses:
Cost of software licenses 21,811 5,366
Cost of services and maintenance 83,085 41,072
Sales and marketing 140,629 66,210
Research and development 75,236 39,846
General and administrative 29,699 16,607
Amortization of intangibles 768,958 --
In-process R&D and acquisition-related
expenses 4,700 557
------------ ------------
Total costs and expenses 1,124,118 169,658
------------ ------------
Operating income (loss) (767,560) 16,622
Other income (expense), net (13,537) 2,499
------------ ------------
Income (loss) before income taxes (781,097) 19,121
Provision for income taxes (6,946) 7,380
------------ ------------
Net income (loss) $(774,151) $ 11,741
============ ============
Basic and diluted earnings (loss) per
common share:
Basic earnings (loss) per common share $ (1.90) $ 0.04
Diluted earnings (loss) per common
share $ (1.90) $ 0.03
Weighted-average common shares
outstanding 408,074 313,000
Weighted-average diluted common shares
outstanding 408,074 366,050
i2 TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
EXCLUDING AMORTIZATION OF INTANGIBLES, WRITE-OFF OF IN-PROCESS R&D
AND ACQUISITION-RELATED EXPENSES, EMPLOYER TAXES ON STOCK OPTION
EXERCISES AND NET LOSSES REALIZED ON MINORITY INVESTMENTS
(In thousands, except per share data)
For the Three Months Ended
March 31,
------------------------------
2001 2000
------------ ------------
Revenues $356,558 $186,280
Costs and expenses 349,566 167,928
------------ ------------
Operating income 6,992 18,352
Other income, net 4,692 2,499
------------ ------------
Income before income taxes 11,684 20,851
Provision for income taxes 4,206 7,819
------------ ------------
Net income $ 7,478 $ 13,032
============ ============
Diluted earnings per common share $ 0.02 $ 0.04
Weighted-average diluted common shares
outstanding 451,467 366,050
The above pro forma amounts have been
adjusted to exclude the following items:
Amortization of intangibles $768,958 $ --
Write-off of in-process R&D and
acquisition-related expenses 4,700 557
Employer taxes on stock option
exercises 894 1,173
Net losses realized on minority
investments 18,229 --
Income tax effect (11,152) (439)
------------ ------------
Net effect of pro forma adjustments $781,629 $ 1,291
============ ============
i2 TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2001 2000
---------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 706,286 $ 739,241
Short-term investments 94,488 84,086
Accounts receivable, net 303,590 298,465
Prepaids and other current assets 122,202 76,989
------------ ------------
Total current assets 1,226,566 1,198,781
Premises and equipment, net 151,778 124,852
Deferred income taxes and other assets 435,517 410,026
Intangibles and goodwill, net 6,816,559 7,492,167
------------ ------------
Total assets $ 8,630,420 $ 9,225,826
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 50,745 $ 49,628
Accrued liabilities 138,283 111,739
Accrued compensation and related expenses 92,806 84,942
Deferred revenue 182,720 165,689
Income taxes payable 11,451 10,056
------------ ------------
Total current liabilities 476,005 422,054
Other long-term liabilities 288 325
Long-term debt 406,139 350,000
------------ ------------
Total liabilities 882,432 772,379
------------ ------------
Stockholders' equity:
Preferred Stock, $0.001 par value, 5,000
shares authorized, none issued -- --
Common Stock, $0.00025 par value,
2,000,000 shares authorized, 410,798
and 405,840 shares issued and
outstanding 103 102
Additional paid-in capital 10,251,049 10,174,012
Accumulated other comprehensive loss (15,028) (6,694)
Accumulated deficit (2,488,136) (1,713,973)
------------ ------------
Total stockholders' equity 7,747,988 8,453,447
------------ ------------
Total liabilities and stockholders'
equity $ 8,630,420 $ 9,225,826
============ ============ |
