EXHIBIT 99.1
| Press Release | [i2 Logo] |
i2 Announces Third Quarter 2003 Results
DALLAS—October 21, 2003, i2 Technologies, Inc. (OTC: ITWO) today announced its results for the third quarter ended September 30, 2003. The Company reported earnings of $0.02 per share for the third quarter of 2003, as compared to breakeven results in the second quarter of 2003 and earnings of $0.07 per share in the third quarter of 2002.
“Across many of the key metrics we track, there are signs that the market for our products and services is beginning to strengthen,” said Sanjiv Sidhu, i2 chairman and CEO. “These signs indicate that the fourth quarter may be a turning point for i2.”
i2 reported total revenues of $117 million in the third quarter of 2003, compared to $122 million in the second quarter of 2003 and $374 million in the third quarter of 2002. Software license revenues totaled $14 million for the third quarter of 2003, compared to $17 million in the second quarter of 2003 and $21 million in the third quarter of 2002.
Total revenues for the third quarter also included $36 million in contract revenue consisting of $31 million in revenue deferred from earlier periods as a result of the Company’s recent restatement and $5 million in revenue attributable to development services projects.
Total costs and operating expenses for the third quarter of 2003 were $103 million, including approximately $4 million of expenses related to contract revenue which were deferred from prior periods as a result of the Company’s recent restatement. This compares to $119 million in total costs and operating expenses in the second quarter of 2003 and $331 million in the third quarter of 2002, which included an $89 million restructuring charge. Operating income for the third quarter of 2003 totaled $14 million.
The Company ended the quarter with $337 million in total cash and investments, a decrease of $18 million from the prior quarter.
Management will host a conference call with investors to discuss third quarter results at 4 p.m. Central today. The call is available via webcast at http://www.i2.com/investors.
About i2
A leading provider of end-to-end supply chain management solutions, i2 designs and delivers software that helps customers optimize and synchronize activities involved in successfully managing supply and demand. i2 has more than 1,000 customers worldwide—many of which are market leaders—including seven of theFortuneglobal top 10. Founded in 1988 with a commitment to customer success, i2 remains focused on delivering value by implementing solutions designed to provide a rapid return on investment. Learn more atwww.i2.com.
i2 is a registered trademark of i2 Technologies US, Inc. and i2 Technologies, Inc.
i2 Cautionary Language
This press release contains forward-looking statements that involve risks and uncertainties, including forward-looking statements regarding our prospects, customer interest in our products and the effectiveness of certain of our organizational improvements. These forward-looking statements involve risks and uncertainties that may cause actual results to differ from these expectations. Factors that could cause actual results to differ could include: the effects of competition; lack of improvement in the pace of IT spending; general economic conditions; and the failure of our customers to successfully implement our solutions or to achieve benefits
attributable to our products. For a discussion of factors which could cause actual results to differ materially from those projected in forward-looking statements, please refer to i2’s recent filings with the SEC, particularly the Annual Report on Form 10-K filed July 21, 2003 and the Quarterly Reports on Form 10-Q filed on August 12, 2003 and August 14, 2003. i2 assumes no obligation to update the forward-looking information contained in this news release.
For further information, please contact:
Melanie Ofenloch
i2 Corporate Communications
469-357-3027
melanie_ofenloch@i2.com
Barry Sievert
i2 Investor Relations
469-357-1000
investor@i2.com
I2 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Revenues: | ||||||||||||||||
Software licenses | $ | 14,199 | $ | 21,451 | $ | 50,619 | $ | 66,822 | ||||||||
Contract | 36,184 | 286,694 | 132,591 | 453,454 | ||||||||||||
Services | 31,820 | 33,059 | 109,998 | 110,081 | ||||||||||||
Maintenance | 35,116 | 33,263 | 104,054 | 109,130 | ||||||||||||
Total revenues | 117,319 | 374,467 | 397,262 | 739,487 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues: | ||||||||||||||||
Software licenses | (693 | ) | (516 | ) | 2,160 | 1,189 | ||||||||||
Contract | 9,775 | 65,271 | 28,638 | 133,191 | ||||||||||||
Amortization of acquired technology | 145 | 2,970 | 435 | 15,012 | ||||||||||||
Services and maintenance | 34,882 | 31,011 | 114,094 | 99,000 | ||||||||||||
Sales and marketing | 20,915 | 40,769 | 68,042 | 166,983 | ||||||||||||
Research and development | 20,318 | 45,680 | 62,676 | 149,749 | ||||||||||||
General and administrative | 12,708 | 16,256 | 50,703 | 54,765 | ||||||||||||
Amortization of intangibles | 39 | 3,569 | 501 | 10,801 | ||||||||||||
Impairment of intangibles | — | 37,660 | — | 37,660 | ||||||||||||
Restructuring charges and adjustments | 5,202 | 88,774 | 5,578 | 88,843 | ||||||||||||
Total costs and expenses | 103,291 | 331,444 | 332,827 | 757,193 | ||||||||||||
Operating income (loss) | 14,028 | 43,023 | 64,435 | (17,706 | ) | |||||||||||
Other income (expense), net: | ||||||||||||||||
Interest income | 920 | 2,919 | 4,055 | 11,710 | ||||||||||||
Interest expense | (4,715 | ) | (5,812 | ) | (15,955 | ) | (17,389 | ) | ||||||||
Realized gains (losses) on investments, net | (1 | ) | (2,485 | ) | (1 | ) | 1,777 | |||||||||
Foreign currency hedge and transaction gains (losses), net | 180 | (901 | ) | (413 | ) | (2,512 | ) | |||||||||
Gain on early repayment of debt obligation | — | — | 3,435 | — | ||||||||||||
Other | (510 | ) | (553 | ) | (1,772 | ) | (1,423 | ) | ||||||||
Total other income (expense), net | (4,126 | ) | (6,832 | ) | (10,651 | ) | (7,837 | ) | ||||||||
Income (loss) before income taxes | 9,902 | 36,191 | 53,784 | (25,543 | ) | |||||||||||
Income tax expense (benefit) | 2,765 | 2,125 | 4,301 | 889,209 | ||||||||||||
Net income (loss) | $ | 7,137 | $ | 34,066 | $ | 49,483 | $ | (914,752 | ) | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.08 | $ | 0.11 | $ | (2.14 | ) | |||||||
Diluted | $ | 0.02 | $ | 0.07 | $ | 0.11 | $ | (2.14 | ) | |||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 433,428 | 431,141 | 433,062 | 427,740 | ||||||||||||
Diluted | 436,417 | 470,622 | 451,739 | 427,740 | ||||||||||||
i2 TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)
| September 30, 2003 | December 31, 2002 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 320,456 | $ | 402,177 | ||||
Restricted cash | 11,535 | 12,052 | ||||||
Short-term investments, at fair value | 5,000 | 10,000 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $3,349 and $10,368 | 36,424 | 45,764 | ||||||
Deferred contract costs | 7,930 | 14,332 | ||||||
Other current assets | 21,280 | 32,721 | ||||||
Total current assets | 402,625 | 517,046 | ||||||
Long-term investments, at fair value | 6 | 33,016 | ||||||
Premises and equipment, net | 32,512 | 59,814 | ||||||
Intangible assets, net | 5,194 | 7,223 | ||||||
Goodwill | 16,566 | 15,854 | ||||||
Other assets | 19 | 270 | ||||||
Total assets | $ | 456,922 | $ | 633,223 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 21,444 | $ | 24,176 | ||||
Accrued liabilities | 76,379 | 137,931 | ||||||
Accrued compensation and related expenses | 28,209 | 40,663 | ||||||
Deferred tax liabilities | — | 2,246 | ||||||
Current portion of long-term debt | — | 60,930 | ||||||
Deferred revenue | 223,996 | 319,292 | ||||||
Total current liabilities | 350,028 | 585,238 | ||||||
Non-current deferred tax liabilities | 36 | 10 | ||||||
Long-term debt | 356,800 | 350,000 | ||||||
Total liabilities | 706,864 | 935,248 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity deficit: | ||||||||
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, 434,007 and 432,853 shares issued and outstanding | 108 | 108 | ||||||
Additional paid-in capital | 10,378,426 | 10,378,747 | ||||||
Deferred compensation | (2,165 | ) | (3,563 | ) | ||||
Accumulated other comprehensive income (loss) | (1,078 | ) | (2,601 | ) | ||||
Accumulated deficit | (10,625,233 | ) | (10,674,716 | ) | ||||
Net stockholders’ deficit | (249,942 | ) | (302,025 | ) | ||||
Total liabilities and stockholders' deficit | $ | 456,922 | $ | 633,223 | ||||