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To: Lizzie Tudor who wrote (12543)	7/2/2002 9:19:39 PM
From: stockman_scott	Respond to of 57684

I2 Tech Sees 75% Drop In 2nd Quarter Software Revenue, Plans Layoffs By: Marcelo Prince, Of DOW JONES NEWSWIRES Tuesday July 2, 6:52 pm Eastern Time NEW YORK -(Dow Jones)- I2 Technologies Inc. warned Tuesday of a deep second-quarter loss and another restructuring amid a 75% drop in sales of its supply-chain software as demand has all but evaporated. The Dallas company, which thrived on mega-sized contracts in the boom times, is now struggling to close business - big or small. Software licenses were $25 million to $26 million in the June quarter, down from $105.8 million a year ago. Analysts, who had tempered their expectations following cautious comments from i2's chief financial officer on June 11 , were forecasting quarterly license revenue of about $45 million to $50 million. "This is a company that's still trying to find its way in the post-Internet boom," said Brad Reback, analyst at CIBC World Markets, who has a hold rating. " I2 is still too heavily dependent on the high-tech sector, which is unlikely to come back any time soon." Sanjiv Sidhu, i2's chairman and chief executive, said on a teleconference that the company signed just one deal worth more than $1 million and the 45 other deals that it did close were smaller than expected. The average sales price was $240,000 in the June quarter, compared with $558,000 in the March quarter. In order to stem its losses, the company plans another restructuring and will lay off an undisclosed number of employees starting this month. I2 has about 4, 800 workers, down from 6,300 at the beginning of last year. "The turnaround will take time," Sidhu said. He said it would take three to four quarters for the company to close the gap between its expenses and revenue, which analysts estimate is about $90 million. Analysts, some of whom had previously speculated the company would lay off 15% of its staff, now suggest even more people could be let go. The company has consumed about $200 million of its cash and investment hoard in the past twelve months and had about $615 million left in its coffers at the end of June. I2 also had $410.9 million in long-term debt at the end of March. Bill Beecher, i2's chief financial officer, said in an interview that the company has sufficient cash to orchestrate its restructuring plans. He declined to provide specifics, but said "We are not taking small steps here, these are significant steps."