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i2 Technologies makes losses in second quarter

Ela Dutt
India Abroad Correspondent in New York

Dallas-based i2 Technologies, Inc (NASDAQ: ITWO) founded by billionaire Sanjiv Sidhu, has announced losses for the second quarter ended June 30, 2001.

The company said on Tuesday that it expects to report total revenues of $235-240 million, including licence revenues of $103-107 million.

The announcement comes a month after Sidhu replaced himself with Greg Brady as chief executive officer and cut the company's work force by 10 per cent.

A company official told India Abroad that i2 still expects to meet its stated objective of saving its customers $75 billion by the year 2000.

Based on the estimated revenues, the company expects to report a pro forma net loss of approximately $0.16 per share for the quarter, which includes a special charge for bad debt expense of approximately $25-27 million, or $0.04 per share.

Excluding this special charge would reduce the pro forma loss to approximately $0.12 per share.

The special charge was taken primarily as a result of conditions surrounding dotcom and public marketplace customers, the company clarified.

The pro forma net loss excludes a restructuring charge of approximately $33-35 million, or $.05 per share, and other pro forma adjustments such as amortization of intangible assets, equity investment gains and losses, and employer taxes on stock option exercises.

Without the pro forma adjustments, the company expects to report a net loss per share of approximately $2.10-2.12 per share when final results are reported on July 18, 2001.

"Market conditions were much more difficult than we had anticipated this quarter -- even more difficult than we experienced in the first quarter," said Brady. "These conditions prevented us from achieving what we believed were conservative estimates for the quarter."

"One positive spot this quarter was expense control," said Bill Beecher, chief financial officer of i2. "We made better than expected progress at reducing our operating cost structure. Total estimated operating expenses, exclusive of the special charge for bad debt and other pro forma adjustments this quarter, are expected to be less than $325 million -- under the low end of our guidance. We are focused on further reducing our operating cost structure."

Sidhu, who founded the company in 1988, has always proclaimed that i2 is creating real value for its global e-business customers through its i2 TradeMatrix(tm) solutions, content and marketplace platform.

Susan Ladow, the company's spokeswoman, confirmed that the $75 billion savings objective continues. "That [$75 billion] is not a saving for our company, it is in terms of the value we have delivered to our customers," she told India Abroad.

Earlier this year, one of its customers, Nike, alleged that i2's software solutions had some glitches that had affected the shoemaker's performance. First quarter estimates from i2 were already showing that the company had become a victim to the economic downturn.

Providing a variety of collaborative e-business services for both the early stages and next generation of e-business adoption, the company is headquartered in Dallas, Texas, has more than 5,700 employees and maintains offices worldwide.

It counts among its customers General Motors, Caterpillar, Visteon, Volvo Trucks as well as top clients in several sectors, including pharmaceuticals and health care, energy, consumer goods, and retail.

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