i2 Restates Four Years Worth of Earnings

By Renee Boucher Ferguson  |  Posted 2003-07-25 Print this article Print

i2's total revenue increased in 2002 and decreased for the three years preceding that; earnings for the two most recent quarters were also down.

Earlier this week supply chain management software maker i2 Technologies Inc. announced the completion of a company audit that resulted in the restatement of company finances for the past four years. The net effect detailed in i2s audit is the companys total revenue increased in 2002 and decreased for the three years preceding that. In 2002, i2s revenue increased by $386 million. In 2001, 2000 and 1999 the Dallas-based company saw total revenue decreases of $138 million, $477 million and $131 million, respectively.
The company also did some financial wrangling in other areas, including an increase in expenses by $46 million in 2002, and decreases in expenses of $196 million, $35 million and $5 million in 2001, 2000 and 1999, respectively.
The bottom line, however, is shareholders are impacted: Over the same four-year period, shareholders equity was reduced by about $910 million. Sanjiv Sidhu, i2s chairman and CEO, said in a statement that the examination was thorough and complete and "it has led us to take actions that we believe will improve our processes." This is not the first sign of trouble for the ailing software company. In April of 2002 the companys then CEO Greg Brady resigned after an already rough 18 months of declining market share and profits. The following July, amidst ever decreasing revenues, i2 implemented a major restructuring that included a 30 percent reduction of its 4,800 employees. Four months later, in November, the company laid off another 50 percent of its remaining employees. As part of that restructuring product development and sales efforts were focused on the companys major solution suites—supply chain management, supplier relationship management and demand planning. On Monday, i2 also announced its first-quarter 2003 results and preliminary second-quarter results. For the first quarter, ended March 31, i2 reported total revenues of $158 million, compared with $203 million for the same quarter a year ago. License revenues were reported to be $19 million for the quarter, versus $26 million for the first quarter in 2002. Preliminary results for the second quarter, ended June 30, are total revenues between $114 million and $122 million, compared with $162 million in the second quarter of 2002. Preliminary software license revenues are expected to be between $14 million and $17 million, as compared with $19 million for the same year-ago quarter.

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