First Half 2001 Total Revenues Grow 39% to $598 Million
DALLAS, July 18, 2001 --
i2 Technologies, Inc. (Nasdaq: ITWO), the leading provider of dynamic value chain solutions, announced today its full results for the second quarter of 2001. Total revenues were $241 million, including license revenues of $106 million, compared to total revenues of $243 million, including license revenues of $150 million in the same period a year ago. Financial results for the second quarter of 2000 include the results of operations of Aspect Development from the date of acquisition, June 9, 2000.
“Our results reflect the very difficult market conditions we faced in the second quarter, and we have initiated plans to help us deal with these conditions more effectively,” said Greg Brady, chief executive officer of i2. “We are the market leader – we have the best solutions, the best customers, a great track record, the best team and the vision to win. We are focused on executing and positioning i2 for success in the future, such that we make the most of our opportunities when market conditions eventually improve.”
The company reported a loss per share of $.16 on a pro forma basis for the second quarter of 2001, compared to diluted earnings of $.05 per share on a pro forma basis for the second quarter of 2000. This quarter’s results include the effects of a $26 million special bad debt charge taken primarily as a result of conditions surrounding public marketplace and dot-com customers. Excluding this charge from the pro forma results, the second quarter 2001 loss per share is $.12.
Pro forma results exclude amortization of intangibles and acquired technology, write-off of in-process R&D; and acquisition-related expenses, employer taxes on stock option exercises, restructuring charges and net losses realized on minority investments. The restructuring charge of $33 million for the second quarter of 2001 principally relates to reductions in headcount and facilities. Loss per share on a GAAP basis for the second quarter of 2001 was $2.08 compared to a loss of $.83 for the second quarter of 2000. The year-to-date loss per share on a GAAP basis was $3.99 for 2001 compared to a loss of $.83 for the first six months of 2000.
For the six months ended June 30, 2001, license and total revenues were $317 million and $598 million respectively, compared to license and total revenues of $264 million and $429 million in the first half of 2000.
Brady was promoted to CEO on May 2, 2001. Shortly after his appointment, he unveiled his 120-Day Plan to strengthen i2’s operations. Throughout the remainder of the second quarter, the company worked toward the realization of this plan. The seven components of the plan, along with the company’s second quarter results and performance relative to the 120-Day Plan, are detailed below:
Achieve Organizational Alignment
i2 has already executed on several organizational changes to realign the company around its business objectives. The company will continue to make changes as necessary.
Create a Sustainable Cost Structure
Cost control initiatives brought total pro forma costs and expenses down to $322 million, excluding the special charge for bad debt, from $350 million in the first quarter. These initiatives include virtually every function and group of the i2 global organization.
“We are pleased with the early progress of our cost-control initiatives and we are continuing to look for ways to run the business more efficiently,” stated Bill Beecher, chief financial officer. “Faced with continued market weakness and an expected operating loss in our third quarter, we will be forced to make difficult decisions regarding further reductions in our workforce and expense structure.”
Realign the Sales Force around Highest-Value Products
“Our Supply Chain Management (SCM) solutions and Supplier Relationship Management (SRM) solutions have created tremendous value for our customers and we are focusing our sales efforts around them,” said Brady. “As a result, this quarter we announced recent sales to customers such as Ontario Power in utilities, Argos in retail, Kraft Foods in consumer packaged goods, and Mitsubishi Electric in high-tech.”
By focusing i2’s efforts around its highest-value solutions, customers can be more assured of achieving the greatest returns from proven solutions in the shortest amount of time.
Increase Demand Generation Programs
i2 recently announced the creation of the i2 Value Delivery Series, consisting of 75 worldwide half-day seminars, Webinars and executive events featuring some of the world’s leading e-business professionals and industry experts sharing their experiences and best practices for gaining a competitive advantage through dynamic value chain creation. The series’ debut event was held in Chicago today and was co-sponsored by Sun Microsystems.
Focus on Marketing Customer Successes
“We recognize that the faster we get a customer live and realizing value, the more likely they are to purchase additional solutions from us, and the more likely they will be a reference for new customers,” said Hiten Varia, chief delivery officer. “By utilizing our templatized solutions and business release implementation strategies, we’re focused on reducing the implementation times for our solutions.”
i2 has a long history of customer successes through value delivery. During the second quarter of 2001, 120 customers went into production with i2 solutions. Go-lives announced this quarter include Fujitsu HDD in high-tech, VF Corporation in softgoods, Nucor Steel in metals, DaimlerChrysler in automotive, Barnes & Noble in retail and Josef L. Meyer GmbH in shipbuilding.
Additionally, at i2’s Planet2001 High-Tech Industry Conference, i2 awarded Value Chain Management Best Practices Awards to Altera, Applied Materials, Cypress Semiconductor, Dell, ON Semiconductor, Siemens, Sun Microsystems, Texas Instruments, and Toshiba, recognizing them for their forward-thinking vision and honoring them as examples of what is possible through value chain management. i2 is committed to continuing to work with its customers to help them achieve excellence in value chain management.
Utilize Partners that Create More Demand for i2, Creating an “i2 Ecosystem”