U.S. marketing and data services revenue up 4 percent
LITTLE ROCK, Ark.--(BUSINESS WIRE)--
Acxiom®
Corporation (Nasdaq: ACXM), a recognized leader in marketing
services and technology, today announced financial results for its third
quarter ended December 31, 2012.
Revenue from continuing operations was $273 million, down 3 percent
compared to $281 million for the prior-year period. Income from
continuing operations increased 73 percent to $27 million in the current
quarter, compared to $16 million in the prior year. Excluding unusual
items, operating income for the quarter decreased 13 percent as compared
to $31 million in the prior year. Marketing and data services revenue
increased slightly to $190 million, compared to $187 million; U.S.
marketing and data services revenue increased 4 percent to $160 million,
compared to $155 million. As expected, IT infrastructure management
revenue decreased 9 percent to $70 million in the current quarter
compared to $77 million. Earnings per diluted share attributable to
Acxiom stockholders were up 90 percent in the current quarter to $0.19,
compared to diluted earnings per share in the prior-year quarter of
$0.10. Diluted earnings per share decreased 14 percent as compared to
$0.22, excluding unusual items in the prior-year quarter.
Operating cash flow was $132 million for the trailing twelve months,
compared to $215 million for the comparable period a year ago. Free cash
flow to equity increased slightly to $117 million for the trailing
twelve months, compared to $115 million for the comparable period. Free
cash flow to equity for the trailing twelve months included $73 million
in proceeds from the sale of the company’s background screening
business. Both operating cash flow and free cash flow to equity were
down as a result of higher working capital and increased tax payments.
Free cash flow available to equity is a non-GAAP financial measure. A
reconciliation to the comparable GAAP measure, operating cash flow, is
attached.
“Revenue from our top 100 U.S. marketing and data services customers was
up over 7 percent this quarter and up over 9 percent year to date,” said
Acxiom CEO Scott Howe. “While we are pleased with this performance, we
also recognize we have work to do in order to further expand our client
base and reignite growth with our small and mid-tier customers.”
Third Quarter Highlights:
Acxiom continues to invest in its new digital products suite. During
the quarter, the company released the following new products: InfoBase
data for major ad platforms and over 1,500 predictive models for 10
major industry verticals. The company intends to hold a product
briefing with investors on March 6 in New York City. The briefing will
be presented by Dr. Phil Mui, key members of the engineering team and
Nada Stirratt, the company’s Chief Revenue Officer.
Acxiom repurchased 1,040,000 shares for $18.3 million during the
quarter. Since inception of the share repurchase program in August
2011, the company has repurchased 9.9 million shares, or approximately
12 percent of the outstanding common stock, for $131 million. The
company has remaining capacity of approximately $19 million out of the
total stock repurchase authorization of $150 million.
Acxiom announced its annual invitation-only client forum known as
Engageto be heldon March 6-8 in New York City. Over
200 top clients and prospects are registered to attend the conference
which provides the opportunity for the world’s largest marketers to
discuss case studies and new technologies. President Bill Clinton will
deliver the keynote address and statistician Nate Silver will also be
featured.
Acxiom appointed Dana Hayes, Jr. as Group VP of Partner
Development. Hayes will lead efforts to build strategic
partnerships and distribution relationships for global data driven
marketing and advertising. He has more than 15 years of experience in
digital media and marketing in leadership roles with companies such as
weather.com and Tribune Company.
Segment Results:
Marketing and Data Services: Revenue for the third quarter
increased slightly to $190 million, as compared to $187 million for
the same period a year ago. U.S. revenue of $160 million increased 4
percent but was offset by declines internationally. Income from
operations for the third quarter was $18 million, compared to $21
million in the prior period. Operating margin was 10 percent, compared
to 11 percent in the previous year.
IT Infrastructure Management: Revenue for the third quarter
decreased 9 percent to $70 million, compared to $77 million for the
same period a year ago. Income from operations for the quarter was
roughly flat at $10 million. Operating margin was approximately 14
percent, compared to 13 percent a year ago.
Other Services: Revenue was $13 million as compared to $16
million in the prior year. Loss from operations was roughly flat at $1
million.
Financial Guidance
The following projections are forward looking and are subject to certain
risks and uncertainties that could cause actual results to differ
materially as detailed in the Forward Looking Statements section of this
press release. Our guidance does not take into account any unusual
charges. Acxiom’s estimates for fiscal 2013 are as follows:
We expect revenue for the fiscal year to be down approximately 2.5
percent as compared to $1.131 billion in the prior year. The decline
is projected primarily as a result of decreases in IT infrastructure
management and international operations.
We now expect earnings per diluted share of up to $. 73 as compared to
our previous guidance of roughly $. 70.
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CST today to further
discuss this information. Interested parties are invited to listen to
the call, which will be broadcast via the Internet at www.acxiom.com.
A slide presentation will be referenced during the call and can be
accessed here.
Acxiom is a recognized leader in marketing services and technology that
enable marketers to successfully manage audiences, personalize consumer
experiences and create profitable customer relationships. Our superior
industry-focused, consultative approach combines consumer data and
analytics, databases, data integration and consulting solutions for
personalized, multichannel marketing strategies. Acxiom leverages over
40 years of experience in data management to deliver high-performance,
highly secure, reliable information management services. Founded in
1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves
clients around the world from locations in the United States, Europe,
Asia-Pacific, and South America. For more information about Acxiom,
visit Acxiom.com.
Forward Looking Statements
This release and today’s conference call may contain forward-looking
statements including, without limitation, statements regarding expected
levels of revenue from continuing operations and earnings per share as
well as statements regarding new product launches. Such forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially. The following are factors,
among others, that could cause actual results to differ materially from
these forward-looking statements: the possibility that certain contracts
may not generate the anticipated revenue or profitability or may not be
closed within the anticipated time frames; the possibility that
significant customers may experience extreme, severe economic difficulty
or otherwise reduce the amount of business they do with us; the
possibility that we will not successfully complete customer contract
requirements on time or meet the service levels specified in the
contracts, which may result in contract penalties or lost revenue; the
possibility that data suppliers might withdraw data from us, leading to
our inability to provide certain products and services to our clients,
which could lead to decreases in our operating results; the possibility
that we may not be able to attract, retain or motivate qualified
technical, sales and leadership associates, or that we may lose key
associates; the possibility that we may not be able to adequately adapt
to rapidly changing computing environments, technologies and marketing
practices; the possibility that we will not be able to continue to
receive credit upon satisfactory terms and conditions; the possibility
that negative changes in economic conditions in general or other
conditions might lead to a reduction in demand for our products and
services; the possibility that there will be changes in consumer or
business information industries and markets that negatively impact the
company; the possibility that the historical seasonality of our business
may change; the possibility that we will not be able to achieve cost
reductions and avoid unanticipated costs; the possibility that the fair
value of certain of our assets may not be equal to the carrying value of
those assets now or in future time periods; the possibility that unusual
charges may be incurred; the possibility that changes in accounting
pronouncements may occur and may impact these forward-looking
statements; the possibility that we may encounter difficulties when
entering new markets or industries; the possibility that we could
experience loss of data center capacity or interruption of
telecommunication links; the possibility that new laws may be enacted
which limit our ability to provide services to our clients and/or which
limit the use of data; and other risks and uncertainties, including
those detailed from time to time in our periodic reports filed with the
Securities and Exchange Commission, including our current reports on
Form 8-K, quarterly reports on Form 10-Q and annual reports on Form
10-K, particularly the discussion under the caption “Item 1A, RISK
FACTORS” in our Annual Report on Form 10-K for the year ended March 31,
2012, which was filed with the Securities and Exchange Commission on May
25, 2012.
With respect to the provision of products or services outside our
primary base of operations in the United States, all of the above
factors apply, along with the difficulty of doing business in numerous
sovereign jurisdictions due to differences in scale, competition,
culture, laws and regulations.
We undertake no obligation to update the information contained in this
press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
December 31,
$
%
2012
2011
Variance
Variance
Revenue:
Marketing and data services
190,138
187,461
2,677
1.4
%
IT Infrastructure management services
69,916
77,173
(7,257
)
(9.4
%)
Other services
13,048
16,259
(3,211
)
(19.7
%)
Total revenue
273,102
280,893
(7,791
)
(2.8
%)
Operating costs and expenses:
Cost of revenue
209,027
213,925
4,898
2.3
%
Selling, general and administrative
37,303
36,318
(985
)
(2.7
%)
Impairment of goodwill and other intangibles
-
17,803
17,803
100.0
%
Gains, losses and other items, net
(126
)
(2,671
)
2,545
95.3
%
Total operating costs and expenses
246,204
265,375
19,171
7.2
%
Income from operations
26,898
15,518
11,380
73.3
%
% Margin
9.8
%
5.5
%
Other income (expense):
Interest expense
(3,178
)
(3,883
)
705
18.2
%
Other, net
565
(98
)
663
676.5
%
Total other income (expense)
(2,613
)
(3,981
)
1,368
34.4
%
Earnings from continuing operations before income taxes
24,285
11,537
12,748
110.5
%
Income taxes
9,836
9,700
(136
)
(1.4
%)
Net earnings from continuing operations
14,449
1,837
12,612
686.6
%
Earnings from discontinued operations, net of tax
-
814
(814
)
(100.0
%)
Net earnings
14,449
2,651
11,798
445.0
%
Less: Net loss attributable to noncontrolling interest
(76
)
(5,279
)
5,203
98.6
%
Net earnings attributable to Acxiom
14,525
7,930
6,595
83.2
%
Basic earnings per share:
Net earnings from continuing operations
0.19
0.02
0.17
850.0
%
Earnings from discontinued operations
0.00
0.01
(0.01
)
(100.0
%)
Net earnings
0.19
0.03
0.16
533.3
%
Net earnings attributable to Acxiom stockholders
0.20
0.10
0.10
100.0
%
Diluted earnings per share:
Net earnings from continuing operations
0.19
0.02
0.17
850.0
%
Earnings from discontinued operations
0.00
0.01
(0.01
)
(100.0
%)
Net earnings
0.19
0.03
0.16
533.3
%
Net earnings attributable to Acxiom stockholders
0.19
0.10
0.09
90.0
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Nine Months Ended
December 31,
$
%
2012
2011
Variance
Variance
Revenue:
Marketing and data services
570,286
568,314
1,972
0.3
%
IT Infrastructure management services
210,267
223,935
(13,668
)
(6.1
%)
Other services
41,675
51,120
(9,445
)
(18.5
%)
Total revenue
822,228
843,369
(21,141
)
(2.5
%)
Operating costs and expenses:
Cost of revenue
628,239
649,701
21,462
3.3
%
Selling, general and administrative
111,393
112,554
1,161
1.0
%
Impairment of goodwill and other intangibles
-
17,803
17,803
100.0
%
Gains, losses and other items, net
66
38
(28
)
(73.7
%)
Total operating costs and expenses
739,698
780,096
40,398
5.2
%
Income from operations
82,530
63,273
19,257
30.4
%
% Margin
10.0
%
7.5
%
Other income (expense):
Interest expense
(9,735
)
(14,057
)
4,322
30.7
%
Other, net
(36
)
(1,150
)
1,114
96.9
%
Total other income (expense)
(9,771
)
(15,207
)
5,436
35.7
%
Earnings from continuing operations before income taxes
72,759
48,066
24,693
51.4
%
Income taxes
28,739
25,291
(3,448
)
(13.6
%)
Net earnings from continuing operations
44,020
22,775
21,245
93.3
%
Earnings from discontinued operations, net of tax
-
2,868
(2,868
)
(100.0
%)
Net earnings
44,020
25,643
18,377
71.7
%
Less: Net loss attributable to noncontrolling interest
(349
)
(5,554
)
5,205
93.7
%
Net earnings attributable to Acxiom
44,369
31,197
13,172
42.2
%
Basic earnings per share:
Net earnings from continuing operations
0.59
0.28
0.31
110.7
%
Earnings from discontinued operations
0.00
0.04
(0.04
)
(100.0
%)
Net earnings
0.59
0.32
0.27
84.4
%
Net earnings attributable to Acxiom stockholders
0.59
0.39
0.20
51.3
%
Diluted earnings per share:
Net earnings from continuing operations
0.57
0.28
0.29
103.6
%
Earnings from discontinued operations
0.00
0.04
(0.04
)
(100.0
%)
Net earnings
0.57
0.32
0.25
78.1
%
Net earnings attributable to Acxiom stockholders
0.58
0.39
0.19
48.7
%
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
For the Nine Months Ended
December 31,
December 31,
2012
2011
2012
2011
Earnings from continuing operations before income taxes
24,285
11,537
72,759
48,066
Income taxes
9,836
9,700
28,739
25,291
Net earnings from continuing operations
14,449
1,837
44,020
22,775
Earnings from discontinued operations, net of tax
-
814
-
2,868
Net earnings
14,449
2,651
44,020
25,643
Less: Net earnings (loss) attributable to noncontrolling interest
(76
)
(5,279
)
(349
)
(5,554
)
Net earnings attributable to Acxiom
14,525
7,930
44,369
31,197
Earnings per share attributable to Acxiom stockholders:
Basic
0.20
0.10
0.59
0.39
Diluted
0.19
0.10
0.58
0.39
Unusual items:
MENA disposal
-
-
-
2,512
Impairment of goodwill and other intangibles
-
17,803
-
17,803
Adjustment of earnout liability
-
(2,598
)
-
(2,598
)
Other adjustments
(126
)
(73
)
66
124
Total unusual items
(126
)
15,132
66
17,841
Earnings from continuing operations before income taxes
and excluding unusual items
24,159
26,669
72,825
65,907
Income taxes
9,760
10,649
28,764
26,341
Non-GAAP earnings from continuing operations
14,399
16,020
44,061
39,566
Earnings from discontinued operations, net of tax
-
814
-
2,868
Non-GAAP net earnings
14,399
16,834
44,061
42,434
Less: Net earnings (loss) attributable to noncontrolling interest
(76
)
(231
)
(349
)
(1,371
)
Non-GAAP Net earnings attributable to Acxiom
14,475
17,065
44,410
43,805
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic
0.20
0.22
0.59
0.55
Diluted
0.19
0.22
0.58
0.54
Diluted weighted average shares
75,878
79,020
76,987
80,877
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
For the Nine Months Ended
December 31,
December 31,
2012
2011
2012
2011
Income from operations
26,898
15,518
82,530
63,273
Unusual items
(126
)
15,132
66
17,841
Income from operations before unusual items
26,772
30,650
82,596
81,114
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
December 31,
December 31,
2012
2011
Basic earnings per share from continuing operations:
Numerator - net earnings
14,449
1,837
Denominator - weighted-average shares outstanding
74,103
78,189
Basic earnings per share
0.19
0.02
Basic earnings per share - net earnings attributable to Acxiom
stockholders:
Numerator - net earnings attributable to Acxiom
14,525
7,930
Denominator - weighted-average shares outstanding
74,103
78,189
Basic earnings per share - net earnings attributable to Acxiom
stockholders
0.20
0.10
Diluted earnings per share from continuing operations:
Numerator - net earnings
14,449
1,837
Denominator - weighted-average shares outstanding
74,103
78,189
Dilutive effect of common stock options, warrants and restricted
stock
1,775
831
75,878
79,020
Diluted earnings per share from continuing operations
0.19
0.02
Diluted earnings per share - net earnings attributable to Acxiom
stockholders:
Numerator - net earnings attributable to Acxiom
14,525
7,930
Denominator - weighted-average shares outstanding
74,103
78,189
Dilutive effect of common stock options, warrants, and restricted
stock
1,775
831
75,878
79,020
Diluted earnings per share - net earnings attributable to Acxiom
stockholders
0.19
0.10
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Nine Months Ended
December 31,
December 31,
2012
2011
Basic earnings per share from continuing operations:
Numerator - net earnings
44,020
22,775
Denominator - weighted-average shares outstanding
75,195
80,039
Basic earnings per share
0.59
0.28
Basic earnings per share - net earnings attributable to Acxiom
stockholders:
Numerator - net earnings attributable to Acxiom
44,369
31,197
Denominator - weighted-average shares outstanding
75,195
80,039
Basic earnings per share - net earnings attributable to Acxiom
stockholders
0.59
0.39
Diluted earnings per share from continuing operations:
Numerator - net earnings
44,020
22,775
Denominator - weighted-average shares outstanding
75,195
80,039
Dilutive effect of common stock options, warrants and restricted
stock
1,792
838
76,987
80,877
Diluted earnings per share from continuing operations
0.57
0.28
Diluted earnings per share - net earnings attributable to Acxiom
stockholders:
Numerator - net earnings attributable to Acxiom
44,369
31,197
Denominator - weighted-average shares outstanding
75,195
80,039
Dilutive effect of common stock options, warrants, and restricted
stock
1,792
838
76,987
80,877
Diluted earnings per share - net earnings attributable to Acxiom
stockholders
0.58
0.39
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
December 31,
Revenue:
2012
2011
Marketing and data services
190,138
187,461
IT Infrastructure management services
69,916
77,173
Other services
13,048
16,259
Total revenue
273,102
280,893
Income from continuing operations:
Marketing and data services
17,971
21,388
IT Infrastructure management services
9,622
9,795
Other services
(821
)
(533
)
Corporate
126
(15,132
)
Total income from continuing operations
26,898
15,518
Margin:
Marketing and data services
9.5
%
11.4
%
IT Infrastructure management services
13.8
%
12.7
%
Other services
-6.3
%
-3.3
%
Total margin
9.8
%
5.5
%
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Nine Months Ended
December 31,
December 31,
Revenue:
2012
2011
Marketing and data services
570,286
568,314
IT Infrastructure management services
210,267
223,935
Other services
41,675
51,120
Total revenue
822,228
843,369
Income from operations:
Marketing and data services
59,277
65,726
IT Infrastructure management services
26,973
19,133
Other services
(3,654
)
(3,745
)
Corporate
(66
)
(17,841
)
Total income from operations
82,530
63,273
Margin:
Marketing and data services
10.4
%
11.6
%
IT Infrastructure management services
12.8
%
8.5
%
Other services
-8.8
%
-7.3
%
Total margin
10.0
%
7.5
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
December 31,
March 31,
$
%
2012
2012
Variance
Variance
Assets
Current assets:
Cash and cash equivalents
186,220
229,648
(43,428
)
(18.9
%)
Trade accounts receivable, net
182,457
169,446
13,011
7.7
%
Deferred income taxes
15,082
15,107
(25
)
(0.2
%)
Other current assets
52,750
57,804
(5,054
)
100.0
%
Total current assets
436,509
472,005
(35,496
)
(7.5
%)
Property and equipment
811,416
913,073
(101,657
)
(11.1
%)
Less - accumulated depreciation and amortization
579,642
659,700
(80,058
)
(12.1
%)
Property and equipment, net
231,774
253,373
(21,599
)
(8.5
%)
Software, net of accumulated amortization
19,491
13,211
6,280
47.5
%
Goodwill
382,704
382,285
419
0.1
%
Purchased software licenses, net of accumulated amortization
21,583
25,294
(3,711
)
(14.7
%)
Deferred costs, net
47,211
61,977
(14,766
)
(23.8
%)
Data acquisition costs
11,540
15,009
(3,469
)
(23.1
%)
Other assets, net
2,831
3,697
(866
)
(23.4
%)
1,153,643
1,226,851
(73,208
)
(6.0
%)
Liabilities and Stockholders’ Equity
Current liabilities:
Current installments of long-term debt
19,814
26,336
6,522
24.8
%
Trade accounts payable
19,873
31,030
11,157
36.0
%
Accrued payroll and related expenses
47,041
54,839
7,798
14.2
%
Other accrued expenses
73,696
77,062
3,366
4.4
%
Deferred revenue
47,389
59,949
12,560
21.0
%
Income taxes
3,229
16,400
13,171
80.3
%
Total current liabilities
211,042
265,616
54,574
20.5
%
Long-term debt
240,774
251,886
11,112
4.4
%
Deferred income taxes
86,614
93,039
6,425
6.9
%
Other liabilities
4,178
4,455
277
6.2
%
Stockholders’ equity:
Common stock
12,108
12,003
105
0.9
%
Additional paid-in capital
877,619
860,165
17,454
2.0
%
Retained earnings
580,728
536,359
44,369
8.3
%
Accumulated other comprehensive income
14,714
13,601
1,113
8.2
%
Treasury stock, at cost
(873,893
)
(810,381
)
(63,512
)
7.8
%
Total Acxiom stockholders’ equity
611,276
611,747
(471
)
(0.1
%)
Noncontrolling interest
(241
)
108
(349
)
(323.1
%)
Total equity
611,035
611,855
(820
)
(0.1
%)
1,153,643
1,226,851
(73,208
)
(6.0
%)
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
2012
2011
Cash flows from operating activities:
Net earnings
14,449
2,651
Non-cash operating activities:
Depreciation and amortization
29,363
32,986
Gain on disposal or impairment of assets
-
(2,710
)
Impairment of goodwill and other intangibles
-
17,803
Deferred income taxes
(2,962
)
1,404
Non-cash stock compensation expense
3,103
1,710
Changes in operating assets and liabilities:
Accounts receivable
(15,867
)
6,913
Other assets
5,492
4,390
Deferred costs
(326
)
(1,048
)
Accounts payable and other liabilities
5,525
1,320
Deferred revenue
(234
)
17,121
Net cash provided by operating activities
38,543
82,540
Cash flows from investing activities:
Capitalized software
(5,443
)
(1,647
)
Capital expenditures
(10,260
)
(14,436
)
Data acquisition costs
(2,766
)
(3,999
)
Payments received from investments
-
370
Net cash used by investing activities
(18,469
)
(19,712
)
Cash flows from financing activities:
Payments of debt
(6,252
)
(31,993
)
Sale of common stock
2,128
4,500
Acquisition of treasury stock
(18,256
)
(8,727
)
Net cash used by financing activities
(22,380
)
(36,220
)
Effect of exchange rate changes on cash
122
142
Net change in cash and cash equivalents
(2,184
)
26,750
Cash and cash equivalents at beginning of period
188,404
119,113
Cash and cash equivalents at end of period
186,220
145,863
Supplemental cash flow information:
Cash paid during the period for:
Interest
3,178
4,160
Income taxes
12,104
9,784
Payments on capital leases and installment payment arrangements
4,002
4,709
Payments on software and data license liabilities
78
125
Other debt payments, excluding line of credit
2,172
2,159
Prepayment of debt
-
25,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease and
installment payment arrangements
-
4,042
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Nine Months Ended
December 31,
2012
2011
Cash flows from operating activities:
Net earnings
44,020
25,643
Non-cash operating activities:
Depreciation and amortization
89,594
103,240
Loss on disposal or impairment of assets
25
183
Impairment of goodwill and other intangibles
-
17,803
Deferred income taxes
(6,428
)
2,539
Non-cash stock compensation expense
8,906
6,910
Changes in operating assets and liabilities:
Accounts receivable
(13,925
)
(2,763
)
Other assets
756
(202
)
Deferred costs
(1,600
)
(1,879
)
Accounts payable and other liabilities
(32,607
)
7,391
Deferred revenue
(12,830
)
14,143
Net cash provided by operating activities
75,911
173,008
Cash flows from investing activities:
Disposition of operations
-
(1,043
)
Capitalized software
(13,190
)
(3,167
)
Capital expenditures
(21,976
)
(39,147
)
Data acquisition costs
(6,464
)
(8,549
)
Payments from investments
-
370
Net cash paid in acquisitions
-
(255
)
Net cash used by investing activities
(41,630
)
(51,791
)
Cash flows from financing activities:
Payments of debt
(19,790
)
(145,768
)
Sale of common stock
7,863
7,318
Acquisition of treasury stock
(65,356
)
(42,827
)
Contingent consideration paid for prior acquisitions
(287
)
(326
)
Net cash used by financing activities
(77,570
)
(181,603
)
Effect of exchange rate changes on cash
(139
)
(724
)
Net change in cash and cash equivalents
(43,428
)
(61,110
)
Cash and cash equivalents at beginning of period
229,648
206,973
Cash and cash equivalents at end of period
186,220
145,863
Supplemental cash flow information:
Cash paid during the period for:
Interest
9,678
15,491
Income taxes
48,268
15,171
Payments on capital leases and installment payment arrangements
12,948
13,687
Payments on software and data license liabilities
337
616
Other debt payments, excluding line of credit
6,505
6,465
Prepayment of debt
-
125,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease and
installment payment arrangements
2,157
8,733
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
06/30/11
09/30/11
12/31/11
03/31/12
FY2012
06/30/12
09/30/12
12/31/12
YTD FY2013
TTM 12/31/11
TTM 12/31/12
Net cash provided (used) by operating activities
32,754
57,714
82,540
56,443
229,451
(1,867
)
39,235
38,543
75,911
215,043
132,354
Less:
Disposition of operations
-
(1,043
)
-
73,468
72,425
-
-
-
-
(1,043
)
73,468
Capitalized software
(529
)
(991
)
(1,647
)
(2,095
)
(5,262
)
(3,673
)
(4,074
)
(5,443
)
(13,190
)
(4,130
)
(15,285
)
Capital expenditures
(12,577
)
(12,134
)
(14,436
)
(12,444
)
(51,591
)
(3,538
)
(8,178
)
(10,260
)
(21,976
)
(51,360
)
(34,420
)
Data acquisition costs
(2,776
)
(1,774
)
(3,999
)
(3,763
)
(12,312
)
(2,302
)
(1,396
)
(2,766
)
(6,464
)
(11,199
)
(10,227
)
Payments on capital leases and installment payment arrangements
(4,794
)
(4,184
)
(4,709
)
(4,644
)
(18,331
)
(4,562
)
(4,384
)
(4,002
)
(12,948
)
(18,939
)
(17,592
)
Payments on software and data license liabilities
(367
)
(124
)
(125
)
(2,300
)
(2,916
)
(129
)
(130
)
(78
)
(337
)
(4,755
)
(2,637
)
Other required debt payments
(2,151
)
(2,155
)
(2,159
)
(2,164
)
(8,629
)
(2,165
)
(2,168
)
(2,172
)
(6,505
)
(8,619
)
(8,669
)
Total
9,560
35,309
55,465
102,501
202,835
(18,236
)
18,905
13,822
14,491
114,998
116,992
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
Q3 FY13 to Q3 FY12
06/30/11
09/30/11
12/31/11
03/31/12
FY2012
06/30/12
09/30/12
12/31/12
YTD FY2013
%
$
Revenue:
Marketing and data services
184,996
195,857
187,461
203,400
771,714
185,739
194,409
190,138
570,286
1.4
%
2,677
IT Infrastructure management services
73,050
73,712
77,173
67,590
291,525
70,290
70,061
69,916
210,267
-9.4
%
(7,257
)
Other services
17,998
16,863
16,259
16,265
67,385
15,630
12,997
13,048
41,675
-19.7
%
(3,211
)
Total revenue
276,044
286,432
280,893
287,255
1,130,624
271,659
277,467
273,102
822,228
-2.8
%
(7,791
)
Operating costs and expenses:
Cost of revenue
218,289
217,487
213,925
213,788
863,489
209,326
209,886
209,027
628,239
-2.3
%
(4,898
)
Selling, general and administrative
36,807
39,429
36,318
38,577
151,131
36,749
37,341
37,303
111,393
2.7
%
985
Impairment of goodwill and other intangibles
-
-
17,803
-
17,803
-
-
-
-
(17,803
)
Gains, losses and other items, net
244
2,465
(2,671
)
12,600
12,638
160
32
(126
)
66
-95.3
%
2,545
Total operating costs and expenses
255,340
259,381
265,375
264,965
1,045,061
246,235
247,259
246,204
739,698
-7.2
%
(19,171
)
Income from operations
20,704
27,051
15,518
22,290
85,563
25,424
30,208
26,898
82,530
73.3
%
11,380
% Margin
7.5
%
9.4
%
5.5
%
7.8
%
7.6
%
9.4
%
10.9
%
9.8
%
10.0
%
Other expense
Interest expense
(5,455
)
(4,719
)
(3,883
)
(3,391
)
(17,448
)
(3,240
)
(3,317
)
(3,178
)
(9,735
)
18.2
%
705
Other, net
(87
)
(965
)
(98
)
(219
)
(1,369
)
(547
)
(54
)
565
(36
)
676.5
%
663
Total other expense
(5,542
)
(5,684
)
(3,981
)
(3,610
)
(18,817
)
(3,787
)
(3,371
)
(2,613
)
(9,771
)
34.4
%
1,368
Earnings from continuing operations before income taxes
15,162
21,367
11,537
18,680
66,746
21,637
26,837
24,285
72,759
110.5
%
12,748
Income taxes
6,063
9,528
9,700
3,838
29,129
8,438
10,465
9,836
28,739
1.4
%
136
Net earnings from continuing operations
9,099
11,839
1,837
14,842
37,617
13,199
16,372
14,449
44,020
686.6
%
12,612
Earnings from discontinued operations, net of tax
916
1,138
814
31,031
33,899
-
-
-
-
-100.0
%
(814
)
Net earnings
10,015
12,977
2,651
45,873
71,516
13,199
16,372
14,449
44,020
445.0
%
11,798
Less: Net earnings (loss) attributable to noncontrolling interest
(960
)
685
(5,279
)
(193
)
(5,747
)
(134
)
(139
)
(76
)
(349
)
-98.6
%
5,203
Net earnings attributable to Acxiom
10,975
12,292
7,930
46,066
77,263
13,333
16,511
14,525
44,369
83.2
%
6,595
Diluted earnings per share - net earnings attributable to Acxiom
stockholders
Press Release $ACXM Acxiom Corporation
U.S. marketing and data services revenue up 4 percent
LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for its third quarter ended December 31, 2012.
Revenue from continuing operations was $273 million, down 3 percent compared to $281 million for the prior-year period. Income from continuing operations increased 73 percent to $27 million in the current quarter, compared to $16 million in the prior year. Excluding unusual items, operating income for the quarter decreased 13 percent as compared to $31 million in the prior year. Marketing and data services revenue increased slightly to $190 million, compared to $187 million; U.S. marketing and data services revenue increased 4 percent to $160 million, compared to $155 million. As expected, IT infrastructure management revenue decreased 9 percent to $70 million in the current quarter compared to $77 million. Earnings per diluted share attributable to Acxiom stockholders were up 90 percent in the current quarter to $0.19, compared to diluted earnings per share in the prior-year quarter of $0.10. Diluted earnings per share decreased 14 percent as compared to $0.22, excluding unusual items in the prior-year quarter.
Operating cash flow was $132 million for the trailing twelve months, compared to $215 million for the comparable period a year ago. Free cash flow to equity increased slightly to $117 million for the trailing twelve months, compared to $115 million for the comparable period. Free cash flow to equity for the trailing twelve months included $73 million in proceeds from the sale of the company’s background screening business. Both operating cash flow and free cash flow to equity were down as a result of higher working capital and increased tax payments. Free cash flow available to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.
“Revenue from our top 100 U.S. marketing and data services customers was up over 7 percent this quarter and up over 9 percent year to date,” said Acxiom CEO Scott Howe. “While we are pleased with this performance, we also recognize we have work to do in order to further expand our client base and reignite growth with our small and mid-tier customers.”
Third Quarter Highlights:
Segment Results:
Financial Guidance
The following projections are forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward Looking Statements section of this press release. Our guidance does not take into account any unusual charges. Acxiom’s estimates for fiscal 2013 are as follows:
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.
Web Link to Financials
You may link to http://www.acxiom.com/FY13_Q3_Financials for the detailed financial information we typically attach to our earnings releases.
About Acxiom
Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves clients around the world from locations in the United States, Europe, Asia-Pacific, and South America. For more information about Acxiom, visit Acxiom.com.
Forward Looking Statements
This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue from continuing operations and earnings per share as well as statements regarding new product launches. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients, which could lead to decreases in our operating results; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2012, which was filed with the Securities and Exchange Commission on May 25, 2012.
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.
We undertake no obligation to update the information contained in this press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
Assets
Liabilities and Stockholders’ Equity
Stockholders’ equity:
Total Acxiom stockholders’ equity
Acquisition of property and equipment under capital lease and installment payment arrangements
Acquisition of property and equipment under capital lease and installment payment arrangements
Less: Net earnings (loss) attributable to noncontrolling interest
Diluted earnings per share - net earnings attributable to Acxiom stockholders
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20130130006225/en/
Acxiom Corporation
Katharine Boyce, 501-342-1321
investor.relations@acxiom.com
EACXM
Source: Acxiom Corporation