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Supply chain management software developer i2 Technologies Inc. announced only preliminary fourth-quarter 2002 results Monday because of accounting questions.
The Dallas-based company said it will re-audit financial statements for fiscal years 2000 and 2001, based on an internal investigation of revenue recognition of customer contracts.
The company retained its current external auditors, Deloitte & Touche LLP, to do the re-audit. That company replaced i2s former external auditors, Arthur Andersen LLP, in May 2002.
As a result of the re-audit, i2 officials said the Securities and Exchange Commission has opened an informal investigation.
At the same time, i2 announced it has made the decision to move to the Nasdaq Small Cap Market on January 30, 2003. The move is expected to provide i2 more time to address non-compliance with the Nasdaq National Market stockholders equity listing requirements—possibly by seeking stockholder approval for a reverse stock split.
Based on preliminary results, i2 reported a fourth-quarter net loss of $12.4 million, or 3 cents a share. Due to the re-audit—which officials said will have no impact on the companys cash position in either 2000 or 2001—these fourth quarter results may be modified.
Preliminary fourth-quarter revenues were reported at $120 million, with operating expenses of $128 million. i2 also booked a $23 million restructuring charge for the quarter.
Excluding the restructuring charge, i2 announced preliminary earnings of 2 cents per share.
Despite its current struggles, i2s chairman and CEO, Sanjiv Sidhu, said in a press release that he is satisfied with the companys preliminary results.
“I believe we have turned the corner on a very difficult period. By focusing on customer satisfaction—which has improved significantly—and by removing a number of operating inefficiencies, we have been able to move more rapidly towards profitability than most thought possible.”