i2 Reports Third Quarter 2009 Results

i2 Technologies, Inc. (NASDAQ: ITWO) today announced the following results for the third quarter of 2009:

* Total revenue was $54.6 million
* Total costs and expenses were $42.4 million
* Net income applicable to common stockholders was $10.0 million
* Diluted earnings per share (GAAP) were $0.36
* Non-GAAP diluted earnings per share were $0.39 (excluding stock option expense)
* Cash flow from operations was $4.5 million
* Total bookings of $53.8 million, including $8.2 million in software solutions bookings (total bookings includes $7.5 million in multi-year agreements with an average term of 2.5 years)

“We are pleased with our operating and financial results in what is typically a seasonally low quarter,” stated i2 Chief Executive Officer Jackson L. Wilson, Jr. “We recorded more than $53 million in total bookings, with year-over-year growth in each of our bookings categories, including significant wins from our transportation and channel management solutions. The relationship between branded manufacturers and retailers continues to evolve and our channel management solutions address the challenges presented as a result of multi-enterprise collaboration.”

“We are reporting solid financial results for the third quarter, highlighted by continued aggressive cost management, strong earnings per share and cash flow from operations that exceeded our expectations,” stated i2 Executive Vice President and Chief Financial Officer Mike Berry. “We continue to manage the business very efficiently and are pleased with our strong profitability and growing cash position,” concluded Berry.

Third Quarter Results

Revenue Detail
Total revenue for the third quarter was $54.6 million as compared to $64.8 million in the third quarter of 2008, a decrease of $10.1 million or 16 percent.

i2 had total third quarter software solutions revenue, which includes core and recurring license revenue and revenue to develop the licensed functionality, of $15.2 million. This compares to $10.6 million of software solutions revenue in the third quarter of 2008, an increase of $4.7 million or 44 percent year-over-year.

Services revenue in the third quarter was $21.0 million, a decrease of $12.3 million or 37 percent compared to the $33.3 million of services revenue in the third quarter of 2008. Services revenue includes fees received from consulting and training services and arrangements to customize or enhance previously purchased licensed software as well as reimbursable expenses.

Third quarter maintenance revenue was $18.4 million, a decrease of 12 percent from $20.9 million in the comparable prior year quarter.

Costs and Expenses
Costs and expenses, subtotal, excludes amounts related to the company’s intellectual property patent infringement lawsuit (external litigation expenses in the 2009 period related to the Oracle litigation). Costs and expenses, subtotal for the third quarter of 2009 were $42.1 million, a 22 percent decrease compared to $54.2 million in the third quarter of 2008. Costs and expenses in the third quarter of 2009 included $2.1 million in stock-based compensation expense, which includes $1.0 million in expense related to stock options and $1.1 million in expense related to restricted stock units.

Total costs and expenses for the third quarter of 2009 were $42.4 million as compared to $54.2 million in the same period in 2008.

Net Income
The company reported third quarter 2009 net income applicable to common stockholders of $10.0 million, or $0.36 per diluted share. This compares to $1.4 million, or $0.05 per diluted share, in net income applicable to common stockholders in the third quarter of 2008.

Nine Month Results
For the nine months ended September 30, 2009, total revenues were $168.1 million, a decrease of 12 percent as compared to $192.1 million for the same period in 2008.

Software solutions revenue increased 17 percent to $40.7 million for the nine months ended September 30, 2009 compared to $34.8 million for the nine months ended September 30, 2008. Services revenue was $71.4 million for the nine months ended September 30, 2009 compared to $92.7 million in the same period in 2008, a decrease of 23 percent. Maintenance revenue decreased 13 percent to $56.0 million in the nine months ended September 30, 2009 compared to $64.6 million in the comparable period in 2008.

Costs and expenses, subtotal (excludes external litigation expenses in the 2009 period related to the Oracle litigation and external litigation expenses and settlement benefit in the 2008 period related to the SAP litigation), for the nine months ended September 30, 2009 decreased 21 percent to $136.6 million as compared to $172.0 million in the comparable period of 2008. Costs and expenses for the nine months ended September 30, 2009 included $7.2 million in stock-based compensation expense, which includes $3.9 million in expense related to stock options and $3.3 million in expense related to restricted stock units.

Total costs and expenses for the nine months ended September 30, 2009 were $137.2 million as compared to $92.1 million in the same period in 2008. The nine months ended September 30, 2008 amount reflects a benefit of $79.9 million, net of external patent litigation expenses, related to the company’s intellectual property settlement with SAP.

The company reported net income applicable to common stockholders of $21.7 million or $0.80 per diluted share for the nine months ended September 30, 2009. This compares to $83.7 million or $3.15 per diluted share in net income applicable to common stockholders in the comparable period in 2008. The nine months ended September 30, 2008 amount includes $78.4 million, net of external litigation expenses and applicable taxes, from the intellectual property settlement.

Non-GAAP Diluted Earnings Per Share

The company provides non-GAAP financial measures to assist stockholders with the analysis of financial and business trends related to the company’s operations. These calculations are not in accordance with, or an alternative for, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies.

Non-GAAP diluted earnings per share applicable to common stockholders in the third quarter of 2009 were $0.39, compared to $0.33 per diluted share in the comparable period last year on a
non-GAAP basis. Non-GAAP diluted earnings per share applicable to common stockholders for the nine months ended September 30, 2009 were $0.98, compared to $0.54 per diluted share in the comparable period in 2008 on a non-GAAP basis. Non-GAAP diluted earnings per share excludes stock option expense; the impact of ASC 470 adoption; the net loss on the repurchase of the company’s 5% senior convertible notes due to the write-off of unamortized discount and debt issuance costs partially offset by the repurchase of the notes below par value; the effect of the intellectual property settlement, net of the impact of taxes applicable to the settlement; and external expenses related to the company’s proposed and subsequently terminated merger agreement in 2008.

A full reconciliation of GAAP to non-GAAP financial measures can be found in Schedule A included with this release.

Other Financial Information

On September 30, 2009, i2’s total cash balance was $192.3 million (including restricted cash of $6.7 million), an increase of $10.7 million from June 30, 2009. The increase in the cash balance reflects the net proceeds from common stock issuance from exercised options as well as the positive cash flow from operations generated in the quarter.

The company generated cash flow from operations of $4.5 million in the third quarter of 2009, bringing the nine months ended September 30, 2009 cash flow from operations amount to $26.9 million.

The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be final until the company files its third quarter 2009 Form 10-Q.

i2 Supply Chain Leader Forum
In addition, on Nov 10, i2 will host the i2 Supply Chain Leader Forum, a one-day virtual event focusing on supply chain management trends and supply chain strategies for 2010 and beyond. The i2 Supply Chain Leader Forum is free, accessible to attendees around the world via webcast, and will feature virtual presentations, panel discussions, live chats and an exhibit hall with more than 200 collateral resources available for downloading.

The i2 Supply Chain Leader Forum agenda, including presentation abstracts and presenter biographies, is available online at www.i2.com/sclforum. Registration for the i2 Supply Chain Leader Forum is also available online. To secure an all-access pass, please go to www.i2.com/sclforum and click the registration button in the upper right corner.

Earnings Conference Call and Webcast Information

Due to the proposed merger with JDA Software Group, Inc. announced earlier today, the company has cancelled its previously announced conference call to discuss the third quarter 2009 financial results.

About i2

Throughout its more than 20-year history of innovation and value delivery, i2 has dedicated itself to building successful customer partnerships. As a full-service supply chain company, i2 is uniquely positioned to help its clients achieve world-class business results through a combination of consulting, technology, and managed services. i2 solutions are pervasive in a wide cross-section of industries. Learn more at www.i2.com.

i2 is a registered trademark of i2 Technologies US, Inc. and i2 Technologies, Inc.

i2 Cautionary Language
This press release contains forward-looking statements that involve risks and uncertainties, including forward-looking statements regarding i2’s ability to execute upon its internal plans and improve operational efficiencies. These forward-looking statements are based on current expectations for bookings, cash collections, revenue, expense, diluted shares outstanding and the company’s proposed merger with JDA Software Group, Inc., and involve risks and uncertainties that may cause actual results to differ from those projected, including, without limitation, the risk that (i) we may experience purchasing delays or a reduction in maintenance renewals as a result of the proposed merger with JDA Software Group, Inc., (ii) the merger with JDA Software Group, Inc., as currently proposed, may not be consummated, (iii) we will be unable to develop new products or develop and generate additional demand for our existing products, (iv) we will be unable to remain competitive, (v) our strategy to sell new software solutions may not be successful, (vi) product quality, performance claims and other litigation may have a material adverse effect on our relationships with customers and our business, and (vii) key personnel leave the company or the company is unable to attract, train and retain additional personnel. For a discussion of factors which could impact i2's financial results and cause actual results to differ materially from those in forward-looking statements, please refer to i2's recent filings with the SEC, particularly the Annual Report on Form 10-K for the year ended December 31, 2008. i2 expressly disclaims any current intention to update the forward-looking information contained in this news release.

For further information, please contact:

Tom Ward

i2 Investor Relations

469-357-3854
tom_ward@i2.com

Beth Elkin

i2 Corporate Communications

469-357-4225

beth_elkin@i2.com