Amid Delisting Warning, i2 CEO UpbeatBy Tom Steinert-Threlkeld | Posted 2003-04-16 Print
i2 Technologies has a "huge opportunity to be a $1 billion company," said Sanjiv Sidhu, one week after the NASDAQ announced its intent to delist the company's stock.DALLAS, Texas - Supply chain "improvement company" i2 Technologies has a "huge opportunity to be a $1 billion company," its chairman and chief executive officer Sanjiv Sidhu said Tuesday, one week after the NASDAQ announced its intent to delist the company's stock.
Sidhu said the enterprise software and services firm needs only to generate $2 million a year in revenue from 500 customers, to hit the number. Currently, the company generates somewhat more than $400 million a year in revenue, from 1,000 customers.
He cited Matsushita Electric Industrial Co., maker of Panasonic brand electronics; General Motors; Dell Computer, and snack food maker Frito-Lay as evidence that large companies are still supporters of his company's products, which help corporations maximize revenue and minimize costs of working with suppliers to move goods and services to market.
"I could reel (off) those names for an hour more," he said.
Sidhu's assessment of the company's growth possibilities comes as the company is unable to account for just how much revenue it has produced in the last four years. The company was notified of the intent to delist Monday, April 7 by the NASDAQ exchange for its failure to deliver its 2002 annual financial report to the Securities and Exchange Commission on time.
The filing has been delayed because the company is in the process of restating its revenue and income for every year since 1999. Sidhu said he hopes the review, by accountant Deloitte & Touche, will be completed by June 15.
Sidhu said much of the restatement centers on how the company accounted for the revenue of large contracts; and whether the revenue should be counted upfront, when the sale is made, or over a longer period of time, as the product is used.
The company is not going to disclose any debts from off-balance sheet entities, like those that undid energy trader Enron Corp.; and will still have strong working capital, he said. The company will still show approximately $457 million in cash on its balance sheet.
"The cash is not affected and there are no hidden liabilities," he said.
But Sidhu also was unable to state whether the company's backlog of pending orders had increased or decreased in the past year.
"I don't think it is materially different," he said. But he also said he had "no clear data" on the company's pipeline of sales that would generate more revenue in future years.
The 15-year-old supply chain management pioneer is facing numerous shareholder suits over the pending restatement of its last four years' worth of financial results. Its stock has fallen under $1 a share; and its bottom line is mired in red ink.
But he said no matter what happens to i2 as a company, outside vendors will step in to maintain and support its software, if there is demand. Customers, he said, recognize that the company has strong intellectual property; and that the accounting issues are largely "an irritation."
The notice of intent to delist came three weeks after i2 released the sixth version of its flagship supply chain software. On April 7, i2 executives said they would ask Nasdaq for a hearing to appeal the delisting notice and would seek additional time to re-audit the company's financial statements. While i2 executives also said the hearing is typically held within 30 days from the date of a company's request, there is no assurance the Nasdaq hearing panel will grant i2 the time it needs to update the financial statements.
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