Results demonstrate strong sales execution and accelerated achievement of cost targets
Dallas, TX
January 24, 2002
i2 Technologies, Inc. (Nasdaq: ITWO), the leading provider of dynamic value chain management solutions, today announced results for the fourth quarter and full year 2001. Sequential growth in both license revenues and unit sales and effective cost control combined to improve the company’s net results, reporting a pro forma loss of $0.08 per share for the fourth quarter compared to a loss of $0.13 per share in the previous quarter and down from a $0.09 pro forma profit per share in the fourth quarter last year. For the full year 2001, i2 reported a pro forma loss per share of $0.36, compared to pro forma earnings per share of $0.26 last year. Pro forma adjustments are listed on the attached Pro Forma Condensed Consolidated Statements of Operations – Unaudited.
Under GAAP (Generally Accepted Accounting Principles) reporting standards, the company reported a net loss of $590 million, or $1.40 loss per share for the fourth quarter. This compares to a net loss of $727 million, or $1.80 loss per share, for the same period last year. For the full year 2001, the company reported a net loss of $7.75 billion, or $18.68 loss per share for 2001 with 97 percent of this reported net loss resulting from the amortization and write-down of intangible assets largely associated with the 2000 acquisition of Aspect Development. This compared to a net loss of $1.75 billion, or $4.83 loss per share, for 2000.
License and Total Revenue
i2 achieved a 7 percent sequential increase in license revenues from third quarter results to $73 million, down from $244 million in the fourth quarter of 2000. Total fourth quarter revenues of $194 million were on par with third quarter results and down from $378 million in the same period last year. License revenues for the fiscal year 2001 were $458 million, down 35 percent from the prior year. Total revenues for 2001 were $986 million, down 12 percent from 2000 results, a year in which the company reported 97 percent growth.
Highlights for the fourth quarter, and full year, include:
Solidified position as the market share leader in SCM. i2, the pioneer of Supply Chain Management (SCM) software, extended its overall lead in the SCM software category with sequential license revenue growth in the fourth quarter and was recognized in 2001 by industry analysts as the market share leader. New customers for fourth quarter include prominent companies such Celestica, Michaels, Nippon Steel and Payless ShoeSource.
Established SRM market. Recognizing the market need for more collaborative offerings across the extended value chain, i2 created the category known as Supplier Relationship Management in January 2001 – with competitors following its lead throughout the year. In doing so, i2 continued its tradition of recognizing market direction well in advance of the competition and delivering tailored offerings to target customers. i2 added DaimlerChrysler, Dole and IBM as customers in the fourth quarter and Toshiba Semiconductor, TV New Zealand and Toronto Hydro during the year.
Demonstrated strong momentum in CRM. With the delivery of distributed order management solutions in the third quarter, i2 continued to demonstrate early understanding of technology trends and customer needs. i2 exited the year as the leader in distributed order management solutions with significant customer wins at British American Tobacco, Corporate Express, Cypress Semiconductor and UPM-Kymmene.
Customer Implementations. Customers continue to recognize i2’s software superiority. The company completed 116 software installations or go-lives in the fourth quarter, for a total of 480 over the course of the year. Customers implementing i2 solutions include Best Buy, Caterpillar, Ford and NEC.
Delivery of Customer ROI. Delivering on its commitment to drive quantifiable return on investment to its customers, i2 announced in October 2001 that the value it has delivered to customers to-date has reached nearly $30 billion, according to independent value auditor Miller-Williams.
Technology Advancements. Also in October 2001, the company introduced i2 Five.Two, a highly scalable business platform designed to enable companies to quickly and dramatically improve key business metrics such as sales, inventory turns, gross and net margin, and concept-to-cash within their enterprise and across their value chain. i2 Five.Two also serves as the enabling platform for Dynamic Value Chain Management – a business methodology that drives collaboration within, and across, companies in the value chain at the rate of business.
Strengthened Board of Directors. i2 announced the following additions to its Board of Directors: Robert L. Crandall, former AMR chairman and CEO in May 2001; and Michael H. Jordan, general partner at Global Asset Capital, LLC and former chairman and CEO of CBS Corporation and Westinghouse in the first quarter of 2002.
“We are encouraged by our solid performance in the fourth quarter. We believe business conditions are beginning to improve and that the company is on track to return to operating profitability in the second half of 2002,” said Greg Brady, i2’s chief executive officer. “While we still face execution challenges and the economy remains difficult, we have worked aggressively to bolster our operating infrastructure with a leaner, smarter cost structure; a more productive, focused sales force; and products that implement faster, integrate more easily, and deliver more value than the competition.”
Pro forma operating expenses for the fourth quarter were $248 million including a $5.7 million accrual related to the consolidation of worldwide development resources. The company is rapidly moving toward a goal of having 50 percent of development resources located in India and intends to reduce the number of its development locations by half. These initiatives allow i2 to significantly reduce development expense while protecting development capacity.
“Pro forma operating expenses in the fourth quarter were down 12 percent from the prior quarter and down nearly 30 percent, or over $100 million per quarter, since the first quarter of 2001,” said Bill Beecher, i2’s chief financial officer. “We are pleased with the progress of our cost cutting initiatives and believe we have approached this difficult task methodically. We have identified additional opportunities that should remove another 10 percent from quarterly operating expenses over the next quarter or two. A significant piece of this will come from our operational move to India. This should ease our intended return to profitability and get us to a leveragable expense structure for the future.”
“i2 is well positioned for 2002 and beyond. We want to thank our customers, partners and employees for their support during the past year. We are now more than ever committed to delivering technology solutions that help our customers find value and improve efficiencies in their business operations,” said Brady.
Earnings Call Information
Company management will host a conference call today, January 24, with analysts and investors. The call is scheduled for 4:00 p.m. CDT and will be open to the public via the company`s Web site at http://www.i2.com/investor.
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 616657. The replay will also be available via the company`s Web site at http://www.i2.com/investor.
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 contains forward-looking statements that are indicative of some member’s of i2 managements beliefs and opinions at the time of issuance. These statements are indicated by such terms as “plans to”, “will”, “believe”, “being”, and “are”, relating to expectations of future financial and operating results, continued demand for our solutions, our 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 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/A filed with the SEC on August 7, 2001, and Item 2 of our Form 10-Q filed with the SEC on November 14, 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 is a registered trademark of i2 Technologies, Inc. and its subsidiaries.
Contact:
Sue LaDow, Media Relations, 469-357-3027, susan_ladow@i2.com
Brent Anderson, Investor Relations, 469-357-6012, brent_anderson@i2.com
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