Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in
marketing services and technology, today announced financial
results for the first quarter of fiscal year 2013 ended June 30,
2012.
Revenue from continuing operations was $272 million, down 2
percent compared to $276 million for the first quarter last year.
Income from continuing operations increased 23 percent to $25
million in the current quarter, compared to $21 million in the
prior year. Earnings per diluted share attributable to Acxiom
stockholders were up approximately 31 percent in the current
quarter to $0.17, compared to diluted earnings per share of $0.13
in the same period.
Operating cash flow increased 7 percent to $195 million for the
trailing twelve months, compared with $182 million for the trailing
twelve months ended June 30, 2011. Free cash flow to equity
increased 154 percent to $175 million for the trailing twelve
months, compared with $69 million for the trailing twelve months
ended June 30, 2011. Free cash flow to equity for the trailing
twelve months includes $73 million in proceeds from the sale of the
Company’s background screening business. Free cash flow available
to equity is a non-GAAP financial measure. A reconciliation to the
comparable GAAP measure, operating cash flow, is attached.
“We are making progress – but we still have much to do,” said
Acxiom CEO Scott Howe. “While our margins have improved and we’ve
strengthened our managerial capability and focus, this year will
continue to be a period of investment and transition. Our objective
is straightforward – get better every day we come to work.”
First Quarter Highlights:
- 0perating margin increased to 9.4
percent, up approximately 2 percentage points year over
year.
- Acxiom repurchased 2.4 million
shares for $33 million during the quarter. Since August 2011,
the company has repurchased 8.1 million shares, or approximately 10
percent of the outstanding common stock, for $100 million.
- In the quarter, Acxiom expanded its
global partner program. The company was selected by Mindshare,
a leading global media network, as the consumer insights provider
for CORE, Mindshare’s new data-driven marketing intelligence
platform. Through CORE, Acxiom delivers its unique breadth and
accuracy of consumer insights to data-driven marketers. In
Australia, the company and Yahoo!7 announced a new partnership to
leverage Acxiom’s extensive offline data to deliver more highly
effective online advertising.
- Tim Cadogan, CEO of OpenX
Technologies and former SVP of Global Advertising Marketplaces for
Yahoo!, has been named to the Acxiom Board of Directors.
- John Battelle, founder and executive
chairman of Federated Media Publishing, has been nominated as a
candidate for election to the Board at the company’s August 16,
2012, annual stockholders meeting.
Segment Results:
- Marketing and Data Services:
Revenue for the first quarter was $186 million, roughly flat
compared to $185 million for the same period a year ago. U.S.
revenue of $160 million was up 2 percent, but was offset by
declines internationally. Income from operations for the first
quarter was $18 million, compared to $17 million in the prior
period. Operating margin was 10 percent, compared to 9 percent in
the previous year.
- IT Infrastructure Management:
Revenue for the first quarter decreased 4 percent to $70 million,
compared with $73 million for the same period a year ago. Income
from operations for the quarter was $9 million, compared to $4
million in the prior period. Operating margin was approximately 13
percent compared to 6 percent a year ago.
- Other Services: Revenue for the
first quarter was $16 million, down from $18 million in the prior
year. Losses from operations were approximately $2 million,
compared to $1 million in the prior period.
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. Acxiom’s estimates for fiscal 2013
are as follows:
- Revenue from continuing operations is
expected to be flat to slightly down.
- Earnings per diluted share attributable
to Acxiom shareholders are expected to be in the range of $0.60 to
$0.65.
For the second quarter of fiscal 2013, revenue from continuing
operations is expected to be down roughly 5 percent principally as
a result of expected declines in the Company’s IT Infrastructure
Management and Other Services segments.
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CDT 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_Q1_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
building momentum, and our plans to invest in and transition our
business. 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 may be unable to quickly and
seamlessly integrate our new executive officers; 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 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; 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 June 30, $ %
2012 2011 Variance Variance Revenue: Marketing and
data services 185,676 184,996 680 0.4 % IT Infrastructure
management services 70,290 73,050 (2,760 ) (3.8 %) Other services
15,693 17,998 (2,305 ) (12.8 %) Total revenue 271,659
276,044 (4,385 ) (1.6 %) Operating costs and expenses: Cost
of revenue 209,326 218,289 8,963 4.1 % Selling, general and
administrative 36,749 36,807 58 0.2 % Gains, losses and other
items, net 160 244 84 34.4 % Total operating
costs and expenses 246,235 255,340 9,105 3.6 %
Income from operations
25,424 20,704 4,720 22.8 % %
Margin 9.4
% 7.5 % Other income (expense): Interest
expense (3,240 ) (5,455 ) 2,215 40.6 % Other, net (547 ) (87 ) (460
) (528.7 %) Total other income (expense) (3,787 ) (5,542 )
1,755 31.7 % Earnings from continuing operations before
income taxes 21,637 15,162 6,475 42.7 % Income taxes 8,438
6,063 (2,375 ) (39.2 %) Net earnings from
continuing operations 13,199 9,099 4,100 45.1 % Earnings
from discontinued operations, net of tax - 916 (916 )
(100.0 %) Net earnings 13,199 10,015 3,184 31.8 %
Less: Net loss attributable to noncontrolling interest (134 ) (960
) 826 86.0 % Net earnings attributable to Acxiom 13,333
10,975 2,358 21.5 % Basic earnings per share:
Net earnings from continuing operations 0.17 0.11 0.06 54.5 %
Earnings from discontinued operations 0.00 0.01 (0.01
) (100.0 %) Net earnings 0.17 0.12 0.05 41.7 %
Net earnings attributable to Acxiom stockholders 0.17 0.14
0.03 21.4 % Diluted earnings per share: Net
earnings from continuing operations 0.17 0.11 0.06 54.5 % Earnings
from discontinued operations 0.00 0.01 (0.01 ) (100.0
%) Net earnings 0.17 0.12 0.05 41.7 % Net
earnings attributable to Acxiom stockholders 0.17 0.13
0.04 30.8 % ACXIOM CORPORATION AND
SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In
thousands, except earnings per share)
For the Three Months Ended June 30, June 30, 2012
2011 Basic earnings per share from continuing operations:
Numerator - net earnings 13,199 9,099 Denominator -
weighted-average shares outstanding 76,473 80,942 Basic earnings
per share 0.17 0.11 Basic earnings per share - net earnings
attributable to Acxiom stockholders: Numerator - net earnings
attributable to Acxiom 13,333 10,975 Denominator - weighted-average
shares outstanding 76,473 80,942 Basic earnings per share - net
earnings attributable to Acxiom stockholders 0.17 0.14
Diluted earnings per share from continuing operations: Numerator -
net earnings 13,199 9,099 Denominator - weighted-average
shares outstanding 76,473 80,942 Dilutive effect of common stock
options, warrants and restricted stock 1,584 1,072 78,057 82,014
Diluted earnings per share from continuing operations 0.17
0.11 Diluted earnings per share - net earnings attributable
to Acxiom stockholders: Numerator - net earnings attributable to
Acxiom 13,333 10,975 Denominator - weighted-average shares
outstanding 76,473 80,942 Dilutive effect of common stock options,
warrants, and restricted stock 1,584 1,072 78,057 82,014
Diluted earnings per share - net earnings attributable to Acxiom
stockholders 0.17 0.13 ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)
For the Three Months Ended
June 30, June 30,
Revenue: 2012 2011 Marketing
and data services 185,676 184,996 IT Infrastructure management
services 70,290 73,050 Other services 15,693 17,998
Total revenue 271,659 276,044
Income from continuing operations:
Marketing and data services 18,366 17,260 IT Infrastructure
management services 8,831 4,247 Other services (1,613 ) (559 )
Corporate (160 ) (244 ) Total income from continuing
operations 25,424 20,704
Margin:
Marketing and data services 9.9 % 9.3 % IT Infrastructure
management services 12.6 % 5.8 % Other services -10.3 % -3.1 %
Total margin 9.4 % 7.5 % ACXIOM CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands) June 30,
March 31, $ % 2012 2012 Variance Variance
Assets
Current assets: Cash and cash equivalents 179,282 229,648 (50,366 )
(21.9 %) Trade accounts receivable, net 172,549 169,446 3,103 1.8 %
Deferred income taxes 14,688 15,107 (419 ) (2.8 %) Other current
assets 58,064 57,804 260 100.0 % Total current
assets 424,583 472,005 (47,422 ) (10.0 %) Property and
equipment 798,908 913,073 (114,165 ) (12.5 %) Less - accumulated
depreciation and amortization 555,973 659,700
(103,727 ) (15.7 %) Property and equipment, net 242,935
253,373 (10,438 ) (4.1 %) Software, net of
accumulated amortization 14,501 13,211 1,290 9.8 % Goodwill 381,439
382,285 (846 ) (0.2 %) Purchased software licenses, net of
accumulated amortization 24,548 25,294 (746 ) (2.9 %) Deferred
costs, net 56,600 61,977 (5,377 ) (8.7 %) Data acquisition costs
13,785 15,009 (1,224 ) (8.2 %) Other assets, net 3,163 3,697
(534 ) (14.4 %) 1,161,554 1,226,851
(65,297 ) (5.3 %)
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 24,905
26,336 (1,431 ) (5.4 %) Trade accounts payable 23,442 31,030 (7,588
) (24.5 %) Accrued payroll and related expenses 31,585 54,839
(23,254 ) (42.4 %) Other accrued expenses 78,535 77,062 1,473 1.9 %
Deferred revenue 52,588 59,949 (7,361 ) (12.3 %) Income taxes 9,966
16,400 (6,434 ) (39.2 %) Total current
liabilities 221,021 265,616 (44,595 ) (16.8 %)
Long-term debt 248,613 251,886 (3,273 ) (1.3 %) Deferred
income taxes 91,643 93,039 (1,396 ) (1.5 %) Other
liabilities 4,134 4,455 (321 ) (7.2 %) Stockholders' equity:
Common stock 12,055 12,003 52 0.4 % Additional paid-in capital
865,229 860,165 5,064 0.6 % Retained earnings 549,692 536,359
13,333 2.5 % Accumulated other comprehensive income 11,929 13,601
(1,672 ) (12.3 %) Treasury stock, at cost (842,736 ) (810,381 )
(32,355 ) (4.0 %) Total Acxiom stockholders' equity 596,169 611,747
(15,578 ) (2.5 %) Noncontrolling interest (26 ) 108 (134 )
(124.1 %) Total equity 596,143 611,855 (15,712
) (2.6 %) 1,161,554 1,226,851 (65,297 ) (5.3
%) ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) For the Three Months Ended June 30, 2012
2011 Cash flows from operating activities: Net
earnings 13,199 10,015 Non-cash operating activities: Depreciation
and amortization 30,995 35,295 Loss on disposal or impairment of
assets 24 - Deferred income taxes (1,403 ) 37 Non-cash stock
compensation expense 2,653 2,355 Changes in operating assets and
liabilities: Accounts receivable (4,609 ) (3,622 ) Other assets
(1,397 ) (8,517 ) Deferred costs (647 ) (386 ) Accounts payable and
other liabilities (33,464 ) (3,674 ) Deferred revenue (7,218 )
1,251 Net cash provided (used) by operating activities
(1,867 ) 32,754 Cash flows from investing activities:
Capitalized software (3,673 ) (529 ) Capital expenditures (3,538 )
(12,577 ) Data acquisition costs (2,302 ) (2,776 ) Net cash paid in
acquisitions - (255 ) Net cash used by investing activities
(9,513 ) (16,137 ) Cash flows from financing activities: Payments
of debt (6,856 ) (32,312 ) Sale of common stock 1,761 39 Contingent
consideration paid for prior acquisitions (287 ) (326 ) Acquisition
of treasury stock (33,097 ) - Net cash used by financing
activities (38,479 ) (32,599 ) Effect of exchange rate changes on
cash (507 ) 53 Net change in cash and cash
equivalents (50,366 ) (15,929 ) Cash and cash equivalents at
beginning of period 229,648 206,973 Cash and cash
equivalents at end of period 179,282 191,044
Supplemental cash flow information: Cash paid during the
period for: Interest 3,223 5,589 Income taxes 16,193 1,098 Payments
on capital leases and installment payment arrangements 4,562 4,794
Payments on software and data license liabilities 129 367 Other
debt payments, excluding line of credit 2,165 2,151 Prepayment of
debt - 25,000 Noncash investing and financing activities:
Acquisition of property and equipment
under capital lease and installment payment arrangements
2,157 3,747 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 TTM 6/30/11
TTM 6/30/12 Net cash provided (used) by operating activities
32,754 57,714 82,540 56,443 229,451 (1,867 ) 181,985 194,830
Less: Disposition of operations - (1,043 ) - 73,468 72,425 - -
72,425 Capitalized software (529 ) (991 ) (1,647 ) (2,095 ) (5,262
) (3,673 ) (3,858 ) (8,406 ) Capital expenditures (12,577 ) (12,134
) (14,436 ) (12,444 ) (51,591 ) (3,538 ) (62,846 ) (42,552 ) Data
acquisition costs (2,776 ) (1,774 ) (3,999 ) (3,763 ) (12,312 )
(2,302 ) (11,816 ) (11,838 ) Payments on capital leases and
installment payment arrangements (4,794 ) (4,184 ) (4,709 ) (4,644
) (18,331 ) (4,562 ) (21,183 ) (18,099 ) Payments on software and
data license liabilities (367 ) (124 ) (125 ) (2,300 ) (2,916 )
(129 ) (4,790 ) (2,678 ) Other required debt payments (2,151 )
(2,155 ) (2,159 ) (2,164 ) (8,629 )
(2,165 ) (8,476 ) (8,643 ) Total 9,560
35,309 55,465 102,501
202,835 (18,236 ) 69,016 175,039
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars
in thousands, except earnings per share)
Q1 FY13 to Q1 FY12
06/30/11 09/30/11 12/31/11 03/31/12
FY2012 06/30/12 % $ Revenue: Marketing and data services
184,996 195,857 187,461 203,400 771,714 185,676 0.4 % 680 IT
Infrastructure management services 73,050 73,712 77,173 67,590
291,525 70,290 -3.8 % (2,760 ) Other services 17,998
16,863 16,259 16,265
67,385 15,693 -12.8 % (2,305 ) Total revenue
276,044 286,432 280,893 287,255 1,130,624 271,659 -1.6 % (4,385 )
Operating costs and expenses: Cost of revenue 218,289
217,487 213,925 213,788 863,489 209,326 4.1 % 8,963 Selling,
general and administrative 36,807 39,429 36,318 38,577 151,131
36,749 0.2 % 58 Impairment of goodwill and other intangibles - -
17,803 - 17,803 - 0 Gains, losses and other items, net 244
2,465 (2,671 ) 12,600
12,638 160 34.4 % 84 Total
operating costs and expenses 255,340 259,381 265,375 264,965
1,045,061 246,235 3.6 % 9,105 Income from operations 20,704
27,051 15,518 22,290 85,563 25,424 22.8 % 4,720
% Margin
7.5 % 9.4 % 5.5 %
7.8 % 7.6 % 9.4 % Other
income (expense) Interest expense (5,455 ) (4,719 ) (3,883 ) (3,391
) (17,448 ) (3,240 ) -40.6 % 2,215 Other, net (87 ) (965 )
(98 ) (219 ) (1,369 ) (547 ) -528.7 %
(460 ) Total other income (expense) (5,542 ) (5,684 ) (3,981 )
(3,610 ) (18,817 ) (3,787 ) 31.7 % 1,755 Earnings from
continuing operations before income taxes 15,162 21,367 11,537
18,680 66,746 21,637 42.7 % 6,475 Income taxes 6,063
9,528 9,700 3,838 29,129
8,438 -39.2 % (2,375 ) Net earnings
from continuing operations 9,099 11,839 1,837 14,842 37,617 13,199
45.1 % 4,100 Earnings from discontinued operations, net of
tax 916 1,138 814 31,031
33,899 - -100.0 % (916 )
Net earnings 10,015 12,977 2,651 45,873 71,516 13,199 31.8 % 3,184
Less: Net earnings (loss) attributable to
noncontrolling interest
(960 ) 685 (5,279 ) (193 )
(5,747 ) (134 ) 86.0 % 826 Net earnings
attributable to Acxiom 10,975 12,292
7,930 46,066 77,263 13,333
21.5 % 2,358
Diluted earnings per share - net earnings
attributable to Acxiom stockholders
0.13 0.15 0.10 0.58
0.96 0.17 30.8 % 0.04
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY
SEGMENT (Unaudited) (Dollars in thousands)
Q1 FY13 to Q1 FY12
06/30/11 09/30/11 12/31/11 03/31/12
FY2012 06/30/12 % $ Revenue: Marketing and
data services 184,996 195,857 187,461 203,400 771,714 185,676 0 %
680 IT Infrastructure management services 73,050 73,712 77,173
67,590 291,525 70,290 -4 % (2,760 ) Other services 17,998
16,863 16,259 16,265
67,385 15,693 -13 % (2,305 )
Total revenue 276,044 286,432 280,893
287,255 1,130,624 271,659
-2 % (4,385 ) Income from operations:
Marketing and data services 17,260 27,078 21,388 30,094 95,820
18,366 6 % 1,106 IT Infrastructure management services 4,247 5,091
9,795 5,855 24,988 8,831 108 % 4,584 Other services (559 ) (2,653 )
(533 ) (1,059 ) (4,804 ) (1,613 ) -189 % (1,054 ) Corporate (244 )
(2,465 ) (15,132 ) (12,600 ) (30,441 )
(160 ) 34 % 84 Total income (loss) from
operations 20,704 27,051 15,518
22,290 85,563 25,424 23 %
4,720 Margin: Marketing and data services 9.3
% 13.8 % 11.4 % 14.8 % 12.4 % 9.9 % IT Infrastructure management
services 5.8 % 6.9 % 12.7 % 8.7 % 8.6 % 12.6 % Other services -3.1
% -15.7 % -3.3 % -6.5 % -7.1 % -10.3 % Total 7.5 % 9.4 % 5.5
% 7.8 % 7.6 % 9.4 %
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