<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 27, 2000
i2 Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-28030 75-2294945
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
One i2 Place, 11701 Luna Road, Dallas, Texas 75234
(Address of Principal Executive Offices) (Zip Code)
Company's telephone number, including area code: (469) 357-1000
Not Applicable.
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 27, 2000, i2 Technologies, Inc. completed the purchase of certain
of International Business Machines Corporation software for planning, retail
merchandising and replenishment, including INFOREM(R) and Makoro for Merchandise
Planning(R). In addition, i2 and IBM entered into a five-year cross-license of
patent rights, under which i2 received a broad license to IBM's patent
portfolio, with certain exclusions, for use with programs designed to improve or
enhance process efficiency, and IBM received a broad license to i2's patent
portfolio for use with information handling systems. In addition, i2 also
acquired a license to IBM's internally developed procurement software.
On the date of the acquisition, i2 issued 1,295,875 shares of its common
stock to IBM. In addition, i2 will issue to IBM up to an additional $250 million
worth of i2 common stock, valued based on a trading average prior to the date of
such issuance. i2 will be obligated to issue some or all of these additional
shares in the future based on the amount of the revenues it derives from or
through IBM during four annual periods, with the first annual period ending
December 31, 2000. The consideration for there transactions was determined by
arm's-length negotiations between i2 and IBM.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Pro forma financial information.
(b) Financial Statements of Registrant's December 31, 1999 Form 10-K
incorporated by reference.
(c) Financial Statements of Registrant's March 31, 2000 Form 10-Q
incorporated by reference.
(d) Exhibits.
+2.1 Common Stock Purchase Agreement, dated March 7, 2000, by and between
i2 Technologies, Inc. and International Business Machines Corporation,
including Exhibits A and B thereto. The remaining exhibits and other
attachments to such document have not been filed because, in the
registrant's judgment, they do not contain information that is
material to an investment decision and that is not otherwise disclosed
in the Common Stock Purchase Agreement or this Current Report on Form
8-K. The contents of such omitted exhibits and other attachments are
briefly identified in the Common Stock Purchase Agreement, and the
registrant agrees to furnish supplementally a copy of any omitted
exhibit or other attachment to the Securities and Exchange Commission
upon request. Portions of this exhibit have been omitted pursuant to a
request for confidential treatment.
23.1 Consent of Arthur Andersen LLP with respect to the registrant's
financial statements.
+99.1 Press Release of i2 Technologies, Inc. dated April 4, 2000,
announcing the completion of the asset purchase.
+ Previously filed.
2
<PAGE> 3
i2 TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On March 27, 2000, i2 purchased from IBM various software assets, cross
patent rights and software licenses with an aggregate value of approximately
$233 million in exchange for approximately 1.3 million shares of i2 common
stock. As part of the IBM asset purchase agreement, i2 has agreed to issue
additional shares to IBM if IBM achieves certain performance measures related to
a marketing agreement. i2 has determined that issuance of such shares is not a
component of the asset purchase price and will be expensed in future periods as
earned by IBM.
The following unaudited pro forma consolidated financial statements of
i2 give effect to i2's purchase of the IBM assets. This information is based on
an independent valuation of the fair market value of the assets acquired and
the estimated usefulness of the intangible assets acquired.
The unaudited pro forma consolidated balance sheet of i2 as of December
31, 1999 assumes that i2's purchase of the IBM assets took place on December 31,
1999, and shows the effect of i2's historical consolidated balance sheet with
the pro forma adjustments for the IBM assets. The historical balance sheet for
i2 as of March 31, 2000 includes the assets as purchased from IBM and is
incorporated herein by reference. The unaudited pro forma consolidated
statements of operations for the period ended December 31, 1999 and the three
months ended March 31, 2000 assumes that i2's purchase of the IBM assets took
place as of January 1, 1999 and January 1, 2000, respectively, and show the
effect of i2's historical consolidated income statement with the pro forma
adjustment for the IBM assets.
The unaudited pro forma consolidated financial statements are presented
for illustrative purposes only and are not necessarily indicative of the
combined financial position or results of operations of future periods or the
results that actually would have been realized had the acquired assets been
owned during the period presented. The pro forma adjustments are based on
estimates, available information and various assumptions and may be revised as
additional information becomes available. The unaudited pro forma combined
financial statements as of and for the year ended December 31, 1999 and three
months ended March 31, 2000 should be read in conjunction with the other
financial statements and notes thereto incorporated by reference.
<PAGE> 4
i2 TECHNOLOGIES, INC.
TABLE OF CONTENTS FOR UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1999 F-1
Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1999 F-2
Unaudited Pro Forma Consolidated Statement of Operations for the three months ended March 31, 2000 F-3
Notes to Unaudited Pro Forma Consolidated Financial Statements F-4
</TABLE>
<PAGE> 5
i2 TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
i2 FOR IBM ASSETS COMBINED
------------ -------------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 454,585 $ -- $ 454,585
Short-term investments ............................... 124,806 -- 124,806
Accounts receivable, net ............................. 157,586 -- 157,586
Prepaids and other current assets .................... 10,607 -- 10,607
Deferred income taxes ................................ 15,868 -- 15,868
------------ ------------ ------------
Total current assets ........................ 763,452 -- 763,452
Furniture and equipment, net ............................... 50,483 -- 50,483
Other assets ............................................... -- -- --
Goodwill and intangible assets ............................. 47,614 224,803(a) 272,417
------------ ------------ ------------
Total assets ................................ $ 861,549 $ 224,803 $ 1,086,352
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ..................................... $ 20,039 $ -- $ 20,039
Accrued liabilities .................................. 40,803 -- 40,803
Accrued compensation and related expenses ............ 40,443 -- 40,443
Deferred revenue ..................................... 72,617 -- 72,617
Income taxes payable ................................. 4,511 -- 4,511
------------ ------------ ------------
Total current liabilities ................... 178,413 -- 178,413
Deferred income taxes ...................................... 968 -- 968
Long-term debt ............................................. 350,000 -- 350,000
------------ ------------ ------------
Total liabilities ........................... 529,381 -- 529,381
------------ ------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock ...................................... -- -- --
Common stock ......................................... 39 -- 39
Additional paid-in capital ........................... 297,879 233,703(b) 531,582
Accumulated other comprehensive income (loss) ........ (4,126) -- (4,126)
Retained earnings(deficit) ........................... 38,376 (8,900)(C) 29,476
------------ ------------ ------------
Total stockholders' equity .................. 332,168 224,803 556,971
------------ ------------ ------------
Total liabilities and stockholders' equity .. $ 861,549 $ 224,803 $ 1,086,352
============ ============ ============
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
F-1
<PAGE> 6
i2 TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
i2 FOR IBM ASSETS COMBINED
---------- -------------- ---------
<S> <C> <C> <C>
Revenues:
Software licenses ......................................... $ 352,597 $ -- $ 352,597
Services .................................................. 147,893 -- 147,893
Maintenance ............................................... 70,620 -- 70,620
--------- --------- ---------
Total revenues .................................... 571,110 -- 571,110
Costs and expenses:
Cost of software licenses ................................. 17,981 -- 17,981
Cost of services and maintenance .......................... 125,934 -- 125,934
Sales and marketing ....................................... 194,752 -- 194,752
Research and development .................................. 132,278 -- 132,278
General and administrative ................................ 53,188 -- 53,188
Amortization of intangible assets ......................... -- 47,388(d) 47,388
In-process research and development and acquisition-related
expenses ............................................... 6,552 6,552
--------- --------- ---------
Total costs and expenses .......................... 530,685 47,388 578,073
--------- --------- ---------
Operating income ................................................ 40,425 (47,388) (6,963)
Other income, net ............................................... 7,642 -- 7,642
--------- --------- ---------
Income (loss) before income taxes ............................... 48,067 (47,388) 679
Provision (benefit) for income taxes ............................ 24,552 (17,770)(e) 6,782
--------- --------- ---------
Net income (loss) ............................................... $ 23,515 $ (29,618) $ (6,103)
========= ========= =========
Net income (loss) per share ..................................... $ 0.16 $ (0.04)
========= ========= =========
Net income (loss) per share, assuming dilution .................. $ 0.14 $ (0.04)
========= ========= =========
Weighted average common shares outstanding ...................... 150,419 151,715
Weighted average common shares outstanding, assuming dilution ... 167,839 151,715
Comprehensive income:
Net income ................................................ $ 23,515 $ (29,618) $ (6,103)
Foreign currency translation adjustments,
net of income tax ...................................... (3,293) -- (3,293)
--------- --------- ---------
Total comprehensive income ...................................... $ 20,222 $ (29,618) $ (9,396)
========= ========= =========
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
F-2
<PAGE> 7
i2 TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
i2 FOR IBM ASSETS COMBINED
---------- -------------- ---------
<S> <C> <C> <C>
Revenues:
Software licenses ......................................... $ 113,584 $ -- $ 113,584
Services .................................................. 46,870 -- 46,870
Maintenance ............................................... 25,826 -- 25,826
--------- --------- ---------
Total revenues .................................... 186,280 -- 186,280
Costs and expenses:
Cost of software licenses ................................. 5,366 -- 5,366
Cost of services and maintenance .......................... 41,072 -- 41,072
Sales and marketing ....................................... 66,210 -- 66,210
Research and development .................................. 39,846 -- 39,846
General and administrative ................................ 16,607 -- 16,607
Amortization of intangible assets ......................... -- 11,847(f) 11,847
In-process research and development and acquisition-related
expenses ............................................... 557 557
--------- --------- ---------
Total costs and expenses .......................... 169,658 11,847 181,505
--------- --------- ---------
Operating income ................................................ 16,622 (11,847) 4,775
Other income, net ............................................... 2,499 -- 2,499
--------- --------- ---------
Income (loss) before income taxes ............................... 19,121 (11,847) 7,274
Provision (benefit) for income taxes ............................ 7,380 (4,443)(e) 2,937
--------- --------- ---------
Net income (loss) ............................................... $ 11,741 $ (7,404) $ 4,337
========= ========= =========
Net income (loss) per share ..................................... $ 0.08 $ 0.03
========= ========= =========
Net income (loss) per share, assuming dilution .................. $ 0.06 $ 0.02
========= ========= =========
Weighted average common shares outstanding ...................... 156,500 157,796
Weighted average common shares outstanding, assuming dilution ... 183,025 184,321
Comprehensive income:
Net income ................................................ $ 11,741 $ (7,404) $ 4,337
Foreign currency translation adjustments,
net of income tax ...................................... 83 -- 83
--------- --------- ---------
Total comprehensive income ...................................... $ 11,824 $ (7,404) $ 4,420
========= ========= =========
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
F-3
<PAGE> 8
i2 TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The total purchase price of the IBM assets reflects the issuance of
approximately 1.3 million shares of i2 common stock. The estimated fair value of
the common stock to be issued is based on the average closing price of i2's
stock on the three days prior and subsequent to the day the transaction was
announced. The total purchase price was determined as follows ( in thousands):
<TABLE>
<S> <C>
Number of shares of i2 common stock .............. 1,296
Value of i2 common stock ......................... $ 233,703
</TABLE>
The total purchase price of the asset purchase has been allocated to acquired
assets based on estimates of their fair value. The combined purchase price of
approximately $ 234 million has been assigned to the assets acquired as follows
(in thousands):
<TABLE>
<S> <C>
Acquired in-process R&D........................... $ 8,900
Acquired developed technology..................... 18,200
Cross patent rights and software license.......... 206,603
----------
$ 233,703
==========
</TABLE>
PRO FORMA CONSOLIDATED BALANCE SHEET
(a) To reflect the allocation of the purchase price to intangible assets
excluding the amount for in-process research and development and to record the
common stock issued to IBM. (see total purchase price above.)
(b) To record the additional paid-in capital from the IBM asset purchase.
(c) i2 expects to allocate approximately $8.9 million of the purchase price to
in-process research and development, which will be expensed in the second
quarter of 2000, as it has not reached technological feasibility and, in the
opinion of management, has no alternative future use. This amount has not been
reflected in the accompanying pro forma combined statement of operations as it
is a non-recurring charge, but has been reflected as an adjustment to
accumulated deficit in the accompanying pro forma balance sheet.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(d) The adjustment to the pro forma consolidated statement of operations for the
year ended December 31, 1999 assumes the acquisition occurred as of January 1,
1999, and reflects the $47 million amortization of intangible assets for the
period ended December 31, 1999. The intangible assets will be amortized ratably
over the estimated life of the asset, ranging from three to five years. The
assets were amortized as follows:
<TABLE>
<CAPTION>
Life AMORTIZATION
---- -------------
<S> <C> <C>
Acquired developed technology..................... 3 $ 6,067
Cross patent rights and software license.......... 5 41,321
-------------
$ 47,388
=============
</TABLE>
(e) To record the tax benefit on the amortization of the tax deductible
intangibles acquired based on a tax rate of 37.5%.
(f) The adjustment to the pro forma combined condensed statement of operations
for the three months ended March 31, 2000 assumes the acquisition occurred as of
January 1, 2000, and reflects the $11.8 million amortization of intangible
assets for the three months ended March 31, 2000. The assets were amortized as
follows:
<TABLE>
<CAPTION>
Life AMORTIZATION
---- -------------
<S> <C> <C>
Acquired developed technology..................... 3 $ 1,517
Cross patent rights and software licenses......... 5 10,330
-------------
$11,847
=============
</TABLE>
F-4
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
i2 TECHNOLOGIES, INC.
Dated: June 1, 2000 By: /s/ WILLIAM M. BEECHER
-----------------------
William M. Beecher
Executive Vice President and
Chief Financial Officer
3
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number
--------------
<S> <C>
+2.1 Common Stock Purchase Agreement, dated March 7, 2000, by and
between i2 Technologies, Inc. and International Business
Machines Corporation, including Exhibits A and B thereto. The
remaining exhibits and other attachments to such document have
not been filed because, in the registrant's judgment, they do
not contain information that is material to an investment
decision and that is not otherwise disclosed in the agreement
or this Current Report on Form 8-K. The contents of such
omitted exhibits and other attachments are briefly identified
in the Common Stock Purchase Agreement, and the registrant
agrees to furnish supplementally a copy of any omitted exhibit
or other attachment to the Securities and Exchange Commission
upon request. Portions of this exhibit have been omitted
pursuant to a request for confidential treatment.
23.1 Consent of Arthur Andersen LLP with respect to the
registrant's financial statements.
+99.1 Press Release of i2 Technologies, Inc. dated April 4, 2000,
announcing the completion of the asset purchase.
</TABLE>
+ Previously Filed.
4
