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10/29/2004
06:23 PM
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New Customers Boost I2's License Revenue

The supply-chain app vendor is improving its profitability with sales to new customers and by cutting its expenses.

The dot-com-bust survivor i2 Technologies Inc. is making further improvements to its financial standing, and Sanjiv Sidhu, chairman, CEO, and founder, says the software company's initiatives to acquire new customers this quarter have paid off.

In the third quarter, ended Sept. 30, i2 gained a number of new customers, including General Motors and Kia Motors America in the automotive industry, South Africa's AngloGold and China's BAO Steel in the metals industry, Avnet in the high-tech industry, Italian aerospace and defense company Galileo Avionica, and Mexico's manufacturer of casual footwear, Distribuidora Flexi, in the consumer-goods and retail industry.

Existing i2 customers Payless Shoes and Best Buy also purchased additional Master Data Management and Supply Chain Event Management software last quarter. The increased number of i2 customers resulted in $17 million in license revenue in the quarter, up from $14 million in the same quarter last year.

"Customers are becoming cautious on spending dollars and they want to do business with an experienced company, with a company that is an expert in supply-chain management, and a company that has the best solutions," Sidhu says.

The supply-chain software vendor Wednesday reported revenue of $111 million for the third quarter, compared with $117 million for the same quarter in 2003. Net income for the third quarter totaled $17 million, up from $7 million for the same quarter one year ago. The company cut its total costs and expenses in the quarter to $90.2 million from $103.3 million one year ago.

Even though revenue is still down compared with a year ago, Sidhu says i2 continues to make progress toward its goal of improving its profitability and long-term growth prospects. "Our customers see that a dollar spent with i2 saves them more than a dollar spent with our competitors, and this is because of our closed-loop technology based on new-generation Web-services architecture," Sidhu says.

The company is still in the process of seeking a new CEO to take over from Sidhu, who is relinquishing that post but will remain as chairman. "We announced this last quarter and we're 90 days into our search," Sidhu says. "We have been talking to several candidates, and we do have a sense of urgency."

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