1
Filed by i2 Technologies, Inc. and RightWorks Corporation
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: RightWorks Corporation
Commission File Number of i2 Technologies, Inc.: 000-28030
THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER OR SALE OF SECURITIES.
INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE
PROSPECTUS REGARDING THE BUSINESS COMBINATION TRANSACTION REFERENCED
HEREIN WHEN IT IS FILED BY I2 TECHNOLOGIES AND BECOMES AVAILABLE. THE
PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT I2 TECHNOLOGIES,
RIGHTWORKS, THE BUSINESS COMBINATION AND RELATED MATTERS. INVESTORS
AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF THE
PROSPECTUS AND OTHER DOCUMENTS FILED BY I2 TECHNOLOGIES AND
RIGHTWORKS WHEN THEY BECOME AVAILABLE THROUGH THE WEBSITE MAINTAINED
BY THE U.S. SECURITIES AND EXCHANGE COMMISSION AT
http://www.sec.gov. THE PROSPECTUS AND SUCH OTHER DOCUMENTS MAY ALSO
BE OBTAINED WITHOUT CHARGE:
o FROM I2 TECHNOLOGIES BY DIRECTING YOUR REQUEST THROUGH THE
INVESTORS PORTION OF I2'S WEBSITE AT http://www.i2.com OR BY
MAIL TO I2 TECHNOLOGIES, INC., ONE I2 PLACE, 11701 LUNA ROAD,
DALLAS, TX 75234, ATTENTION: INVESTOR RELATIONS, TELEPHONE:
(469) 357-1000.
o FROM RIGHTWORKS BY DIRECTING YOUR REQUEST BY MAIL TO RIGHTWORKS
CORPORATION, 1075 EAST BROKAW ROAD, SAN JOSE, CA, ATTENTION:
MELINDA WILKEN, TELEPHONE: (408) 579-4008.
In addition to the Prospectus, and the Registration Statement of
which the Prospectus is a part, i2 Technologies files annual,
quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may
read and copy any reports, statements or other information filed by
i2 at the SEC public reference rooms at 450 Fifth Street, N.W.,
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rooms in New York, New York and Chicago, Illinois. Please call the
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reference rooms. i2's filings with the SEC are also available to the
public from commercial document-retrieval services and at the
website maintained by the SEC at http://www.sec.gov.
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I2 TECHNOLOGY, INC.
HOST: BRENT ANDERSON
MARCH 9, 2001/8:00 A.M. CST
PAGE 1
i2 TECHNOLOGIES, INC.
MARCH 9, 2001
8:00 A.M. CST
Moderator Ladies and gentlemen, thank you for standing by and
welcome to the i2 Technologies conference call. At
this time, all participant lines are in a listen-only
mode. Later, we will conduct a question and answer
session. Instructions will be given to you at that
time. As a reminder, today's conference call is being
recorded for replay. Replay information will be given
at the end of today's conference call. As well,
today's conference call is being broadcast via
StreetEvents at i2's Internet site. It will also be
recorded and available after the call through AT&T's
Encore Service. I would now like to turn the
conference over to your host, Mr. Brent Anderson.
Please go ahead, sir.
B. Anderson Thank you, Leah. Good morning, everyone. Thank you
for joining us on the call. I'm Brent Anderson,
Director of Investor Relations for i2 Technologies.
With me this morning on the call are Dr. Romesh
Wadhwani, i2's Vice Chairman; Bill Beecher, i2's
Chief Financial
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PAGE 2
Officer; Sanjiv Sidhu, i2's CEO; and Mary Coleman,
CEO of RightWorks.
We'd like to brief you on the acquisition
announcement made by i2 after the market yesterday.
We'll have some introductory comments made by Bill,
Romesh and Mary and then we'll open it up for
questions, where Sanjiv will join us.
Before I turn the call over to Bill, I want to remind
you that the statements made on this call are made
under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. During our
presentation and Q&A session, our statements will
include projections or forward-looking comments,
including but not limited to, completion of this
acquisition, financial and operating targets and the
integration of our products. We give no assurances
regarding the achievement of these statements. These
forward-looking statements are management's current
estimates or beliefs and the actual outcomes could be
significantly different, due to risk factors such as
changing market conditions, changing technologies,
competition and our own ability to execute, to list
just a few. For a more complete discussion of the
risk factors that could impact our results, please
refer to the latest filings with the SEC, including
our most recent 10-Q. You can
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HOST: BRENT ANDERSON
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PAGE 3
find these either on our Web site,
www.i2.com/investors, or directly through the SEC's
EDGAR site.
I'd like to now turn the call over to Bill Beecher,
i2's CFO.
B. Beecher Thanks, Brent, and good morning. We're very pleased
to announce that i2 has come to an agreement to
acquire RightWorks. As you can see by the press
release, which was issued yesterday evening,
RightWorks provides e-procurement and commerce
solutions that are complementary to i2's extended
supply chain management solutions. I'll let Romesh
describe the company for you in much more detail, but
first, I'll review the transaction and why I think
it's good for i2.
i2 has an agreement to acquire RightWorks for
approximately 5.3 million shares, with a value of
approximately $114 million, based upon i2's closing
share price yesterday. That represents approximately
1.3% of i2's outstanding common shares. i2 and ICG --
that would be the group that owns the majority of
RightWorks -- have agreed to jointly fund operations
for RightWorks until the close of the transaction.
The acquisition has already been approved by the
respective Boards of both companies and we are
seeking final approval from RightWorks' shareholders,
as well as
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MARCH 9, 2001/8:00 A.M. CST
PAGE 4
necessary regulatory entities. We are optimistic that
we will close the transaction during the second
quarter. We plan to account for the transaction as a
purchase and expect that it will be treated as a
tax-free reorganization for shareholders.
This is a good transaction for i2, because RightWorks
provides us with state-of-the-art technology for
collaborative e-commerce, replacing what we were
previously offering through our partnership with
Ariba, but without the requirement to split revenues
on these sales since all will be i2 products. In
addition, by leveraging i2's top-ranked sales force,
we could reasonably expect the RightWorks acquisition
to generate license revenues in the second half of
this year that not only exceed what we've generated
through our partnership with Ariba, but could
approach, or even exceed, RightWorks' license
revenues for the full calendar year 2000, which
amounted to roughly $22 million -- that's license
revenue. We expect this transaction to be accretive
to i2's earnings by early next year.
So we're excited to finally be able to announce this
acquisition to you today. I'd like to turn it over to
Romesh, who was instrumental in putting this together
and will be overseeing its completion and operations.
Romesh.
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MARCH 9, 2001/8:00 A.M. CST
PAGE 5
R. Wadhwani Thanks, Bill. I'd like to start by expressing our
appreciation to everyone within both i2 and
RightWorks, who worked so hard to bring this
transaction to fruition. We're very excited about
this development and what it means to the customers,
partners and shareholders of i2 and RightWorks. As
Bill described, we will be giving up a little over 1%
of i2 to acquire RightWorks--and we believe it's a
great deal for both companies and our customers. Why?
Well, today i2 offers the industry's most
comprehensive solutions for e-business transformation
and e-market success, including solution suites for
supplier relationship management, supply chain
management, customer relationship management, and
content solutions, as well as our industry-leading
TradeMatrix platform.
For several months now, our marketplace customers
have been telling us that they want a procurement
solution that can aggregate and manage procurement
across multiple enterprises, for both direct and
indirect materials. They've told us they want a
solution that supports all types of buying models,
from negotiated procurements for direct materials, to
auctions for indirect materials. Similarly, i2's
e-business customers asked for a multi-enterprise
procurement solution that enables collaborative
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MARCH 9, 2001/8:00 A.M. CST
PAGE 6
procurement across the entire supply chain and
supports spend aggregation and leverages across all
procurement partners.
After a detailed assessment of various
make-versus-buy alternatives, we concluded that
RightWorks had by far the best technology in this
area and was the only company with this technology
actually working at customer sites today. We had a
previous marketing partnership with them and knew
that we could quickly upgrade our existing
integration to bring a new joint offering to market
very quickly. By extending i2's solutions with the
RightWorks technology, we will offer the only
integrated collaborative e-procurement solution
available to any business or e-market that leverages
knowledge from the entire extended supply chain.
As Bill mentioned, we believe that when we make this
solution available to the market in the latter half
of this year, our world-class Global Sales
Organization should be able to exceed the revenues
generated to date from our Ariba partnership and
perhaps even exceed RightWorks' license revenue for
the entire year 2000 in just the second half of this
year alone. In addition, we believe this is a
collaborative e-procurement solution that is
tailor-made for the non-manufacturing verticals, such
as financial
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PAGE 7
services, insurance and healthcare, further
strengthening our market opportunities.
This acquisition also provides several additional
benefits to i2 customers. For example, RightWorks'
world-class collaborative e-procurement technology
will be added to our industry-leading Supplier
Relationship Management suite, creating a complete
solution that spans everything from strategic design,
strategic sourcing, to collaborative design and
manufacturing, with collaborative e-procurement now
being added for both direct and in-direct materials.
It also strengthens the commerce and transaction
management capabilities of i2's industry-leading
TradeMatrix platform for collaboration, content and
commerce. This joint solution also provides the only
collaborative e-procurement solution that can support
multi-company, real-time pricing and availability,
and order brokering. It provides the only truly
global collaborative e-procurement solution that
simultaneously supports more than a dozen languages
and multiple currencies, as well as multi-enterprise
capabilities.
Adding these transaction capabilities of the
RightWorks technology to our SRM solution also
creates a complete and powerful solution for
mission-critical MRO. We will integrate RightWorks'
Open Commerce Network
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MARCH 9, 2001/8:00 A.M. CST
PAGE 8
into the i2 TradeMatrix Network, significantly
expanding the supplier enablement capabilities and
services that we provide and extending i2's lead in
content management and reference data solutions, now
with well over 100,000 participating suppliers.
Finally, it adds some very talented and passionate
software and marketing professionals, who are
particularly skilled in this area of collaborative
e-procurement to i2's organization.
We are targeting introduction of our first integrated
offering by early this summer. We will bring
RightWorks Release 7.0 Commerce Platform capabilities
into i2's Supplier Relationship Management Solution
during this time frame. These technologies will also
be used as the basis for a collaborative
e-procurement solution for smaller customers and for
those interested in taking their first steps in
e-business transformation.
You may be asking what this deal means for i2's
relationship with Ariba and subsequently IBM. With
i2's acquisition of RightWorks, we will have
effectively vertically integrated our procurement
capabilities, which will negate our need for
additional external partnerships in this area. We
currently have more than a dozen joint customers with
Ariba. Each of these customers remains an extremely
high priority for i2. We will
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MARCH 9, 2001/8:00 A.M. CST
PAGE 9
absolutely continue to support them and to enhance
our joint solutions with Ariba for our mutual
customers today and in the future. As a
customer-focused company, we will also continue to
honor our joint customers with the highest level of
service and support and we will continue to offer
this joint solution to any future customers who may
want it. At the same time, if customers want this
kind of collaborative e-procurement capability that
is only available from i2 today, we will of course be
happy to provide that.
IBM and i2 continue to be very closely aligned and we
don't expect this acquisition to affect our
relationship with IBM in any way. IBM continues to be
one of i2's most important partners. In keeping with
our commitment to open integration, we will continue
to create our entire product line with the ability to
easily integrate with existing legacy systems and
partner products and we will continue to support IBM
as a strong partner in this and other respects.
Finally, I wanted to comment on our plans for
integrating RightWorks into the i2 organization.
There are approximately 420 employees worldwide at
RightWorks today, including those at the headquarters
in San Jose, California. RightWorks will expand our
existing base of operations in
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MARCH 9, 2001/8:00 A.M. CST
PAGE 10
Silicon Valley. We look forward to the addition of
RightWorks' expertise, particularly in product
development, marketing and in senior management. As
we go forward, we will identify areas of redundancy
and take actions in those areas as appropriate. Mary
Coleman, RightWorks' CEO, has spent a significant
amount of time working on this acquisition with me.
She will conclude our presentation this morning with
a few comments. Mary.
M. Coleman Thanks, Romesh. It's a pleasure to be here with the
i2 team this morning announcing this acquisition. I
wanted to take just a minute to talk about what this
acquisition means to RightWorks and our customers.
Several months ago, as we surveyed what was happening
in the market, where companies were turning for
answers and what executives cared about, it was clear
to us that while we have by far the best
e-procurement technology in the industry, we needed a
strong partner to help bring that technology to the
market. Several companies were candidates - companies
that we had been partnering with in one way or
another over the past several years. From the outset,
we believed that the best fit for us was to align
with i2. This conclusion was shared by Internet
Capital Group, our largest shareholder.
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MARCH 9, 2001/8:00 A.M. CST
PAGE 11
The obvious reason to any market observer is i2's
leadership in the market. No company today can
evaluate e-business solutions without talking to i2,
and most select them as the provider of choice. But
even more important to our team is i2's laser focus
on creating value for their customers. It's more than
just a marketing ploy. They track it, they help
customers estimate it, they have it independently
audited, and they pay bonuses based on it. It's
deeply engrained in how they do business. We wanted
that same kind of devotion to value in our partner.
Our customers can be assured that we will use that
devotion to continue to provide you with the best
possible solutions and that i2 will live up to every
obligation we've made to you.
Romesh has explained how our technology will fit so
seamlessly into i2. We're merging our respective
strengths in e-business and the end result is a
company that will deliver a powerful, integrated and
fully Internet-enabled solution that we believe is
unmatched in the industry. We are pleased and proud
to become a member of the i2 family.
I know many of you will ask of my future plans. We
have agreed that I will remain through the transition
to make sure that the acquisition goes as smoothly as
possible. However, I've decided not to remain in an
on-going
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MARCH 9, 2001/8:00 A.M. CST
PAGE 12
role within i2's senior management team. Romesh and
his team are exceptional business people and I have
every confidence that the transition will be a smooth
one.
With that, I believe Romesh and Bill are ready to
take your questions.
B. Anderson Operator, this is Brent. I'd like to just state that
we'd like to keep this fairly short, so if you can
limit your questions to one each, please.
Moderator Thank you for standing by. Our first question will
come from Jim Pickrel from JP Morgan. Please go
ahead.
J. Pickrel Hi, thanks very much. Just a quick clarification and
then a question. Bill, you mentioned a license
revenue number from RightWorks for last year. I just
couldn't hear that figure.
B. Beecher Twenty-two Million.
J. Pickrel Twenty-two, thanks. I know, towards the end of last
year, RightWorks had entered into a reselling
agreement with Manugistics and probably
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MARCH 9, 2001/8:00 A.M. CST
PAGE 13
some others. Are those still going to be standing
obligations or can those agreements effectively be
ended at this point?
R. Wadhwani It's highly unlikely that Manugistics would want to
continue the agreement with RightWorks at this point.
So we would obviously have to find ways of bringing
closure to them.
J. Pickrel Okay, thanks very much.
Moderator Our next question will come from the line of Tom
Berquist from Goldman Sachs. Please go ahead.
T. Berquist Congratulations, everyone. A quick question on the
technology integration. I understand the timeframes
that you mentioned, Romesh, and I'm just curious, can
you talk a little bit more about how you'll look at
integration? Is this going to be API level
integration? Is it going to a shared set of modules?
Could you just talk a little bit more about how deep
the integrations will go?
R. Wadhwani Yes, the integrations will be fairly deep, certainly
at the levels of common work flows, an easy way to
navigate from one set of solutions to the
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MARCH 9, 2001/8:00 A.M. CST
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RightWorks technology. Both sets of solutions, the
SRM solution from i2 and the Collaborative
e-Procurement solution from RightWorks, are based on
very similar architectures, using off-the-shelf
application server technology, so we also expect
application server to application server XML
integration.
Moderator Our next question comes from Chuck Phillips from
Morgan Stanley. Please go ahead.
C. Phillips I didn't get the figure on the license revenue
number.
B. Beecher RightWorks, last year, did roughly $22 million of
license revenue.
C. Phillips Any idea how much of that came through the
Manugistics partnership?
B. Beecher I'm not aware of that. Romesh, do you know?
M. Coleman It was zero. This is Mary, Chuck.
Moderator Our next question comes from Brent Thill from Credit
Suisse First Boston. Please go ahead.
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MARCH 9, 2001/8:00 A.M. CST
PAGE 15
B. Thill Of the number of customers that RightWorks has, can
you talk about the overlap with i2's customer base
and are any of the customers integrated today?
R. Wadhwani RightWorks has a total of about 50 customers, if I
remember this correctly. There is relatively little
overlap right now between the two customer bases.
Certainly, one of the benefits that we expect to get
out of this acquisition is that it will extend our
capabilities into verticals such as financial
services and public services. So we will not only get
benefits from the technology in what has been our
traditional verticals, but also in some new verticals
as well.
Moderator Our next question comes from Chris Shilakes from
Merrill Lynch. Please go ahead.
C. Shilakes Great, thanks very much; congratulations as well.
Could you give us a little extra color on the
RightWorks split of business, kind of direct/indirect
materials, procurement, maybe a geographic split, and
kind of mid-market vs. Fortune 500? You mentioned a
few larger customers,
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are those recent adds or have those customers been in
place for multiple quarters?
M. Coleman Romesh, do you want me to take that one?
R. Wadhwani Yes.
M. Coleman I would say that, primarily during last year, our
revenues have been split roughly about 50/50 between
e-procurement applications and trading exchange
applications. We have started to move more into the
direct procurement area with the release of our 7.0
release of software, which we just started using at
the end of February. We added a lot of direct
procurement specific functionality. We have numerous
customers within our customer base that are in the
process of beta testing that code and are quite
interested in moving in that direction. Obviously,
with the relationship with i2 on the supply chain
side bodes very well for us in moving more into that
direct procurement space.
In terms of international split of revenues, the bulk
of our revenues had really been coming from the North
American market. Last fall, we really started to
expand into Europe as well into Asia Pacific, but it
was a
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PAGE 17
nominal amount of international contribution at this
point in time. In terms of large corporate deals, we
have obviously sold mainly into mid-market companies.
But we have also been successful in selling some very
large corporate deals over the last four- to
six-months, as we've really directed the company to
focus on Global 2000 accounts, both for sales of
e-procurement software, as well as for private
exchanges.
Moderator Our next question comes from Tim Klein from U.S.
Bancorp Piper Jaffray. Please go ahead.
T. Klein I understand the Web-based technology, but could you
please highlight, in the competitive landscape today,
what are the key differentiators in the RightWorks
solution set versus your most direct competitors
today? Then, kind of as a follow-on, what are the
most popular or highest demand elements of your
solution set?
R. Wadhwani If I could address that, because it really goes to
the heart of one of the reasons why this acquisition
was so important to us. As I mentioned earlier, our
customers have come to the conclusion that the first
generation of e-procurement solutions that have been
offered by many companies for the last couple of
years have really not delivered a very high value
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PAGE 18
proposition. The reason is because they can only be
used behind the four walls of an enterprise and are
typically used for indirect materials only. Even in
that, typically just for the purchase of office
supplies, using simple requisitioning or auctioning
type processes.
The conclusion, which is our customers' conclusion,
has been that they need to be able to do
multi-enterprise buying in a public or private
marketplace. That means the ability to combine the
buying, combine the spending and combine the
procurement across multiple buying organizations,
often organizations that share the same supply chain.
In addition, they want a solution that is global in
nature. We were really impressed with the fact that
RightWorks technology simultaneously supports 13
different languages and multiple currencies, which
means that any global marketplace that wants to
support collaborative e-procurement would have an
immediate answer to their problems. We also
identified from our customers, a need to support the
procurement of both direct and indirect materials and
to support multiple buying processes all on one
platform with one common technology, one user
interface, one set of work flows, one data model.
Again, we felt that RightWorks provided us with this
technology.
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PAGE 19
One other interesting technical fact, by the way, is
that RightWorks is also the first company to have
what we call a `Zero Footprint Client.' That means
that you can have a marketplace with hundreds of
thousands of users and not have to download Java
clients, because that's technically very impractical.
So they also have the Zero Footprint Client that
allows us to support potentially hundreds of
thousands of users at any private or pubic
marketplace. All of these, by the way, are
significant differentiators from any other competitor
in this space.
Moderator Our next question is from Kash Rangan from Dain
Rauscher Wessels. Please go ahead.
K. Rangan Thank you, congratulations on the acquisition. I
wasn't sure what the revenue recognition at
RightWorks was. Is that perpetual or subscription
type accounting? Also, if you could comment on sales
first quarter. Within i2, how do you envision
quarters going up? If there is an existing pipeline
of e-procurement deals, perhaps through the Ariba
partnership, should we expect to see those deals
migrated away to the RightWorks technology? Thank
you.
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R. Wadhwani Let me come back to the first question last and let
Mary answer that one. I would say that the quotas of
the i2 sales force will not change as a result of
this deal. As I mentioned earlier, we intend to keep
a certain percentage of RightWorks sales organization
and to make them part of the i2 global sales
organization, both to expand our market opportunity
into new verticals like financial services and to
provide domain expertise on collaborative
e-procurement within our other verticals. In that
sense, we'll be expanding our capabilities, but not
changing the individual quotas on a per account rep
basis.
Relative to the Ariba opportunities, first of all,
you may recall that last year our focus with Ariba
was on public marketplaces where our partners wanted
to use Ariba for first-generation e-procurement
behind their firewalls. To the extent that there are
additional customers who like that combined solution,
and there are only a few of them, I should add, we
will continue to offer the combined solution to those
customers. To the extent that customers realize that
the full value proposition comes from collaborative
e-procurement, of course, i2 now has the only
technology and the only solution for that and we will
be delighted to upgrade them to this technology.
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Mary, do you want to answer the question on license?
M. Coleman Standard software revenue recognition of licenses. In
addition to that, we had hosting arrangements with
customers, where it was on a subscription, monthly
type of basis. Our Open Commerce Network is also on a
subscription type of a basis. I think that probably
pretty much covers it.
Moderator Next question comes from David Gremmels from Thomas
Weisel Partners. Please go ahead.
D. Gremmels Thank you. You mentioned that you expect to generate
as much or more revenue with RightWorks in the second
half of this year as you've done with Ariba today.
I'm just wondering if you can tell us what that
number is and is that i2's share of the total or is
that the total with joint customers?
R. Wadhwani The approximate numbers, and Bill can correct me
here, I think with Ariba, we've done something in the
range of around 15 deals jointly, representing
somewhere in the range of around $20 million to $25
million gross. Of course, we only get a portion of
that. So I think Bill's comment earlier was that we
should be able to do more than that gross number, and
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PAGE 22
that's in the second half of this year with the
RightWorks technology, if things go according to
plan.
Moderator Our next question is from Catherine Moore from
Unterberg Towbin. Please go ahead.
C. Moore I wanted to ask about the current quarter. Do you
think that the acquisition of RightWorks will mainly
impact the second half? Do you think it'll give you a
competitive advantage in closing deals this quarter?
If you can also touch on this quarter, how back-ended
it might be?
R. Wadhwani Let me answer the first half of that question and
turn the second half of the question over to Sanjiv.
The first half of the question, I wouldn't anticipate
this acquisition having a significant impact one way
or the other in this quarter. Over the long term,
which is of course the reason why we've made this
acquisition, we certainly believe it will be
extremely positive for i2.
For the second part of your question, Sanjiv.
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S. Sidhu I guess on the question relating to the quarter, it's
clear that the economic conditions have continued to
deteriorate, presenting a greater challenge for
everyone, particularly as indicated by several
companies in our industry. Oracle, Ariba and Commerce
One have all made more cautious statements regarding
market conditions.
Our quarters are generally back-end loaded and this
quarter is back-end loaded too, but there are many
days remaining between now and the end of the
quarter. A lot can happen between now and the end of
the quarter. Overall, we are asking i2-ers to work
really hard to deliver on our plan, but we at i2 are
taking a longer-term approach. We continue to believe
that with this acquisition, we increase our market
opportunity. We continue to believe that times like
this allow i2, with a highly value-centric message,
to increase our competitive differentiation. So, i2
is continuing to execute, to differentiate now and to
be able to do things to differentiate for the future.
Moderator Our next question comes from Doug Augenthaler from
CIBC World Markets. Please go ahead.
D. Augenthaler My question has been answered. Thank you very much.
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HOST: BRENT ANDERSON
MARCH 9, 2001/8:00 A.M. CST
PAGE 24
B. Anderson Operator, this is Brent. I think we show one or two
more questions, so we could probably wrap it up after
another question or two.
Moderator Very good. Our next question comes from Ben Rose from
Adams Harkness & Hill. Please go ahead.
B. Rose Congratulations to all involved. A quick question for
Mary, which is how have the trends in average order
size been playing out for RightWorks over the last
couple of quarters and any distinction you can make
on the procurement side versus the trading exchange
side of the product line? Also, if Romesh or Sanjiv
can comment on how this impacts i2's relationships
with some of your other partners, including MRO
Software? Thanks.
M. Coleman I would say that as we've continued to broaden our
product line from base e-procurement software in the
Trading Exchange and then in December we introduced
our strategic source, our RFQ capabilities, then more
recently, in our 7.0 release, Forward Auction
Technology. We've had additional modules to be able
to sell our customers, so actually our ASP is
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I2 TECHNOLOGY, INC.
HOST: BRENT ANDERSON
MARCH 9, 2001/8:00 A.M. CST
PAGE 25
increasing and we would expect that that would
certainly increase with the acquisition of RightWorks
by i2.
In terms of the ASP as well, obviously last year,
there was a lot of activity with net market makers
and that has shifted, just given the change in the
marketplace and the investment climate. Most of our
focus has been on larger Global 2000 deals and just
given the nature and the size of those deals, you
would expect that the ASP would trend upward.
R. Wadhwani With respect to the other partnerships, we don't
anticipate any significant change in them. In
particular, our partnership with MRO.com continues to
be strong.
Moderator We will take our last question from David Garrity
from Dresdner Kleinwort Wasserstein. Please go ahead.
D. Garrity Thank you very much. Mary, can you give us an update
of what your backlog was at RightWorks in the
quarter? Also, can you give us a sense in terms of
your accounts receivable and how much exposure might
you have had to dot-com net market makers?
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HOST: BRENT ANDERSON
MARCH 9, 2001/8:00 A.M. CST
PAGE 26
M. Coleman On the accounts receivable side, we took pretty
aggressive action, basically to look at already
writing off any receivables that we were concerned
about and we will continue, obviously, to collect on
those. We also had changed our revenue recognition
policy earlier this year, to make sure that we only
booked revenue from net market makers where we
actually collected the cash up front or we would not
take that to our P&L. We think that our exposure
should be minimal on a go-forward type of basis.
In terms of revenue on the backlog, we have not
disclosed that. Obviously, there were some leaks in
the press prior to close of our quarter, which was a
February 28th quarter-end, because we're on a May
31st fiscal year. We did have a number of deals that
slipped, just given all of the press activity related
to the rumors around this acquisition. We do have
those prospects all still in our pipeline. We
actually view that the announcement with i2 will be
very, very positive, because obviously in the current
markets, private company viability tends to be an
issue with large corporate accounts. Certainly, given
the strength of i2 and our pending acquisition with
them, I think that will bode very, very well for our
sales force and for our prospects and customers.
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MARCH 9, 2001/8:00 A.M. CST
PAGE 27
B. Anderson Operator, I think we can wrap it up there. Thank you
all for joining us.
Moderator Ladies and gentlemen, as a reminder, this conference
has been recorded and will be available through
AT&T's Encore Service and on the Internet through
StreetEvents and i2.com. Instructions can be found on
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You may access the AT&T Executive Playback Service at
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That does conclude your conference for today. Thank
you for your participation and for using AT&T
Executive Teleconference. You may now disconnect.