i2 Financials Remain in the Red

Supply chain software developer claims customer wins despite poor earnings.

Supply chain management software maker i2 Technologies Inc. announced another round of disappointing earnings for the third quarter, buffeted by a number of customer wins in key verticals for the company.

The Dallas-based company reported total revenues of $115 million, compared with $201 million for the third quarter in 2001. Total revenues included software license sales of $30 million, versus $68 million in licenses for the same quarter last year, and service revenues of $43 million, versus $82 million for last years third quarter.

i2s net loss for the quarter was about $199 million.

With dismal results in the second quarter of 2002, which resulted in a restructuring of the company, i2 focused heavily on customer satisfaction for this past quarter – amidst other goals.

"We made significant progress toward our goals in the third quarter," said Sanjiv Sidhu, i2s chairman and CEO. "i2 improved execution across many areas of the business including sales, consulting, product development, customer satisfaction, working with our partners and product quality."

Despite some issues with Home Depot, which i2 officials declined to elaborate on, the company reported a number of new wins for the quarter. Of the 65 customers that went live in the third quarter, new customer wins included Gap Inc., Airbus, Raymond Limited and AngloGold.

The areas where customers have expressed the most interest included spend optimization, fulfillment optimization and a new area of interest with revenue and profit optimization, according to Sidhu. He added that spend optimization was the companys hottest selling software for the quarter, despite some claims to the contrary.

"There have been all kinds of rumors floating around. These are dead wrong," said Sidhu. "We are very focused on spend optimization because our customers are focused on it."

Sidhu said the company will continue its restructuring plans and work towards meeting its goals.

i2 is not the only company with continued troubles in the supply chain automation software industry. Long-time competitor Manugistics Group Inc., which reported second quarter earnings late last month, saw a five percent revenue reduction from the prior year.

Manugistics, of Rockville, Md., reported $69.9 million in revenues for its fiscal second quarter, which ended Aug. 31, versus $73.8 million in sales for the same year-ago quarter. Software revenue decreased 27 percent to $18.1 million from $24.8 million for the same period in the prior year. As a result, Manugistics announced plans to further reduce expenses, including a workforce reduction of 10 to 12 percent.

Similar to i2, Manugistics bills itself as an Enterprise Profit Optimization software maker.