Acxiom® Corporation (Nasdaq: ACXM), a global leader in
interactive marketing, today announced financial results for the
first quarter of fiscal year 2010 ended June 30, 2009. Acxiom will
hold a conference call at 4:30 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.
John Meyer, Acxiom’s chief executive officer and president,
said, “We continue to feel the effects of our clients limiting or
delaying their marketing spending. Despite the challenging economic
environment, we are committed to our strategic plan for long-term
investment in our business. We have a strong balance sheet, and we
remain focused on sales discipline, expense management and cash
flow. We believe these efforts will position us well for both
revenue and operating income growth when the economy begins to
recover.”
First Quarter 2010 Highlights:
- Earnings per diluted
share of $0.05 in the first quarter of fiscal 2010, compared to
earnings per diluted share of $0.12 in the first quarter of fiscal
2009, before the effect of unusual gain items. GAAP diluted
earnings per share in the prior-year period were $0.14, which
included $0.02 in unusual gain items.
- Income from operations of
$12.5 million in the current year first quarter, compared to income
from operations of $25.6 million in the first quarter last
year.
- Revenue of $256.0 million
in the current quarter, compared to $308.9 million, excluding an
Information Products pass-through contract, in the first quarter a
year ago. GAAP revenue in the prior period was $331.1 million,
which included pass-through revenue from the Information Products
contract of approximately $22.2 million. This contract was modified
in the fourth quarter of fiscal 2009, and the company no longer
recognizes pass-through revenue from this contract.
- Operating cash flow of
$16.2 million compared to $28.5 million in the first quarter a year
ago. Operating cash flow during the current quarter included
approximately $23 million of incentive compensation payments earned
in fiscal 2009.
- Free cash flow available to
equity of negative $13.2 million, compared to negative $9.6
million in the first quarter a year ago. Free cash flow available
to equity is a non-GAAP financial measure; a reconciliation to the
comparable GAAP measure, operating cash flow, is attached to this
news release.
Operational Highlights:
- Information Services:
Revenue for the quarter was $199.3 million, compared to $236.7
million in the first quarter of the previous year. Income from
operations for the quarter was $25.5 million, compared to $38.6
million in the first quarter of fiscal 2009.
- Information Products:
Revenue for the quarter was $56.7 million, compared with $72.2
million, excluding the pass-through revenue from the Information
Products contract referenced above, in the first quarter a year
ago. GAAP revenue in the prior period was $94.4 million, which
included revenue from the Information Products pass-through
contract of approximately $22.2 million. This contract was modified
in the fourth quarter of fiscal 2009, and the company no longer
recognizes pass-through revenue from this contract. Loss from
operations for the quarter was $0.1 million, compared to income
from operations of $4.6 million in the first quarter of the
previous year.
- Corporate and Other
Expenses: Corporate and other expenses for the quarter totaled
$12.9 million, compared to $17.6 million for the period ended June
30, 2008.
Web Link to Financials
You may link to http://www.acxiom.com/FY10_Q1_Financials for the
detailed financial information we typically attach to our earnings
releases.
About Acxiom
A global leader in interactive marketing services and
infrastructure management, Acxiom connects clients with their
customers through deep customer insight, powering effective and
profitable marketing initiatives and business decisions. Our
consultative approach spans multiple industries and incorporates
decades of experience in consumer data and analytics, information
technology, data integration and consulting solutions for effective
marketing across digital, Internet, email, mobile and direct mail
channels. Our secure, high-performance technology services deliver
consistent value and reliability. Founded in 1969, Acxiom is
headquartered in Little Rock, Arkansas, and serves clients around
the world from locations in the United States, Europe and
Asia-Pacific. For more information about Acxiom, visit
www.acxiom.com.
Forward Looking Statements
This release and today’s conference call may contain
forward-looking statements including statements that the company is
positioned for revenue and operating income growth when the economy
begins to recover. 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 we may not be able to attract, retain
or motivate qualified technical, sales and leadership associates,
or that we may lose key associates to other organizations; 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; 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
report 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, 2009, which was filed with the Securities and
Exchange Commission on May 29, 2009.
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, $ % 2009 2008 Variance Variance
Revenue: Services 199,326 236,695 (37,369 ) (15.8 %) Products
56,655 94,378 (37,723 ) (40.0 %) Total revenue
255,981 331,073 (75,092 ) (22.7 %) Operating costs and
expenses: Cost of revenue Services 159,576 178,861 19,285 10.8 %
Products 45,919 77,717 31,798 40.9 % Total cost of
revenue 205,495 256,578 51,083 19.9 % Services gross margin
19.9 % 24.4 % Products gross margin 18.9 % 17.7 % Total gross
margin 19.7 % 22.5 % Selling, general and administrative
37,643 49,482 11,839 23.9 % Gains, losses and other items, net 347
(545 ) (892 ) (163.7 %) Total operating costs and
expenses 243,485 305,515 62,030 20.3 % Income
from operations 12,496 25,558 (13,062 ) (51.1 %)
Other income (expense): Interest expense (5,505 ) (9,459 )
3,954 41.8 % Other, net (118 ) 1,359 (1,477 ) (108.7 %)
Total other income (expense) (5,623 ) (8,100 ) 2,477 30.6 %
Earnings before income taxes 6,873 17,458 (10,585 ) (60.6 %)
Income taxes 2,679 6,808 4,129 60.6 %
Net earnings 4,194 10,650 (6,456 ) (60.6 %)
Earnings per share: Basic 0.05 0.14 (0.09 )
(64.3 %) Diluted 0.05 0.14 (0.09 ) (64.3 %)
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, 2009 2008 Basic earnings per share:
Numerator - net earnings 4,194 10,650 Denominator -
weighted-average shares outstanding 78,667 77,402 Basic
earnings per share 0.05 0.14 Diluted earnings per share:
Numerator - net earnings 4,194 10,650 Denominator -
weighted-average shares outstanding 78,667 77,402 Dilutive
effect of common stock options, warrants and restricted stock 345
354 79,012 77,756 Diluted earnings per share 0.05
0.14 ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30, June 30,
Revenue:
2009 2008 Information services 199,326 236,695 Information
products 56,655 94,378 Total revenue 255,981
331,073
Income from operations:
Information services 25,516 38,626 Information products (146
) 4,578 Corporate & other (12,874 ) (17,646 ) Total
income from operations 12,496 25,558
Margin: Information services 12.8 % 16.3 %
Information products -0.3 % 4.9 % Total margin 4.9 % 7.7 %
ACXIOM CORPORATION AND SUBSIDIARIES
PRODUCTS REVENUE AND COST OF PRODUCTS SUPPLEMENTAL SCHEDULE
(Unaudited) (Dollars in thousands) For the Three
Months Ended June 30, June 30, $ % 2009 2008 Variance
Variance Products 56,655 72,164 (15,509 ) (21.5 %)
Passthrough data - 22,214 (22,214 ) (100.0 %)
Total products revenue 56,655 94,378 (37,723 ) (40.0
%) Cost of products revenue: Products 45,919 55,503
9,584 17.3 % Passthrough data - 22,214 22,214 100.0 %
Total cost of products 45,919 77,717 31,798
40.9 %
Margin: Products 18.9 % 23.1 %
Passthrough data 0.0 % 0.0 % Total products 18.9 % 17.7 %
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
June 30, March 31, $ % 2009 2009 Variance Variance
Assets
Current assets: Cash and cash equivalents 167,670 177,166 (9,496 )
(5.4 %) Trade accounts receivable, net 189,980 184,814 5,166 2.8 %
Refundable income taxes - 4,579 (4,579 ) (100.0 %) Deferred income
taxes 45,698 45,641 57 0.1 % Other current assets 52,678
46,873 5,805 12.4 % Total current assets 456,026
459,073 (3,047 ) (0.7 %) Property and
equipment 760,669 745,999 14,670 2.0 % Less - accumulated
depreciation and amortization 548,030 531,410 16,620
3.1 % Property and equipment, net 212,639 214,589
(1,950 ) (0.9 %) Software, net of accumulated
amortization 49,301 52,798 (3,497 ) (6.6 %) Goodwill 465,003
454,944 10,059 2.2 % Purchased software licenses, net of
accumulated amortization 59,283 65,341 (6,058 ) (9.3 %) Deferred
costs, net 67,799 70,343 (2,544 ) (3.6 %) Data acquisition costs
30,835 31,317 (482 ) (1.5 %) Other assets, net 16,466 18,938
(2,472 ) (13.1 %) 1,357,352 1,367,343
(9,991 ) (0.7 %)
Liabilities and Stockholders' Equity
Current liabilities: Current installments of long-term debt 34,985
40,967 (5,982 ) (14.6 %) Trade accounts payable 27,284 27,701 (417
) (1.5 %) Accrued payroll and related expenses 22,671 44,823
(22,152 ) (49.4 %) Other accrued expenses 82,715 86,072 (3,357 )
(3.9 %) Deferred revenue 55,099 54,991 108 0.2 % Income taxes 607
- 607 - Total current liabilities 223,361
254,554 (31,193 ) (12.3 %) Long-term debt
533,470 537,272 (3,802 ) (0.7 %) Deferred income taxes
60,983 58,526 2,457 4.2 % Other liabilities 8,765 9,321 (556
) (6.0 %) Stockholders' equity: Common stock 11,611 11,576
35 0.3 % Additional paid-in capital 804,874 800,094 4,780 0.6 %
Retained earnings 446,144 441,950 4,194 0.9 % Accumulated other
comprehensive income 7,856 (6,238 ) 14,094 (225.9 %) Treasury
stock, at cost (739,712 ) (739,712 ) 0 0.0 % Total
stockholders' equity 530,773 507,670 23,103 4.6 %
1,357,352 1,367,343 (9,991 ) (0.7 %)
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30,
2009 2008 Cash flows from operating activities: Net
earnings (loss) 4,194 10,650 Non-cash operating activities:
Depreciation and amortization 40,595 53,893 Loss on disposal or
impairment of assets, net (2 ) (2,111 ) Deferred income taxes 2,496
2,715 Non-cash stock compensation expense 2,388 2,604 Changes in
operating assets and liabilities: Accounts receivable (4,335 )
(16,258 ) Other assets 4,651 9,376 Deferred costs (906 ) (616 )
Accounts payable and other liabilities (32,015 ) (31,296 ) Deferred
revenue (900 ) (484 ) Net cash provided by operating activities
16,166 28,473 Cash flows from investing activities:
Capitalized software (2,384 ) (5,011 ) Capital expenditures (7,431
) (5,706 ) Cash collected from sale and license of software - 2,000
Data acquisition costs (5,777 ) (8,622 ) Payments received from
investments - 2,494 Net cash paid in acquisitions - (35 )
Net cash used by investing activities (15,592 ) (14,880 ) Cash
flows from financing activities: Payments of debt (13,724 ) (23,304
) Dividends paid - (4,649 ) Sale of common stock 2,427 3,273 Tax
benefit of stock options exercised - 60 Acquisition of treasury
stock (307 ) - Net cash used by financing activities (11,604
) (24,620 ) Effect of exchange rate changes on cash 1,534
165 Net increase (decrease) in cash and cash
equivalents (9,496 ) (10,862 ) Cash and cash equivalents at
beginning of period 177,166 62,661 Cash and cash
equivalents at end of period 167,670 51,799
Supplemental cash flow information: Cash paid (received)
during the period for: Interest 5,258 9,354 Income taxes (5,052 )
42 Payments on capital leases and installment payment arrangements
7,794 12,879 Payments on software and data license liabilities
3,878 8,368 Other debt payments, excluding line of credit 2,052
2,057 Noncash investing and financing activities:
Acquisition of property and
equipment under capital lease and installment payment
arrangements
3,823 1,824 ACXIOM
CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW
AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited) (Dollars in thousands)
06/30/08 09/30/08
12/31/08 03/31/09 FY2009 06/30/09 Net
cash provided by operating activities 28,473 86,803 78,913 74,652
268,841 16,166 Plus: Sale of assets - 24,174 - - 24,174 -
Payments received from investments 2,494 102 - 3 2,599 -
Disposition of operations - - - - - - Less: Capitalized
software (5,011 ) (4,118 ) (3,872 ) (3,238 ) (16,239 ) (2,384 )
Capital expenditures (5,706 ) (7,245 ) (6,232 ) (12,266 ) (31,449 )
(7,431 ) Data acquisition costs (8,622 ) (6,507 ) (7,825 ) (7,607 )
(30,561 ) (5,777 ) Payments on capital leases and installment
payment arrangements (12,879 ) (11,204 ) (9,033 ) (7,673 ) (40,789
) (7,794 ) Payments on software and data license liabilities (8,368
) (8,420 ) (3,099 ) (3,330 ) (23,217 ) (3,878 ) Other required debt
payments (2,057 ) (2,073 ) (2,061 ) (2,073 )
(8,264 ) (2,052 ) Subtotal (11,676 ) 71,512 46,791
38,468 145,095 (13,150 ) Plus: Tax benefit of stock options
and warrants 60 55 - (81
) 34 - Subtotal (11,616 ) 71,567 46,791
38,387 145,129 (13,150 ) Plus: Cash collected from sale of
software 2,000 - - -
2,000 - Total (9,616 )
71,567 46,791 38,387
147,129 (13,150 ) ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except earnings per share)
Q1 FY09 to Q1 FY10 06/30/08
09/30/08 12/31/08 03/31/09 FY2009
06/30/09 % $ Revenue: Services 236,695 233,605 231,077
218,885 920,262 199,326 -15.8 % (37,369 ) Products 94,378
95,330 89,979 76,624
356,311 56,655 -40.0 % (37,723 ) Total
revenue 331,073 328,935 321,056 295,509 1,276,573 255,981 -22.7 %
(75,092 ) Operating costs and expenses: Cost of revenue
Services 178,861 180,986 173,433 161,060 694,340 159,576 10.8 %
19,285 Products 77,717 77,038 70,487
55,604 280,846 45,919
40.9 % 31,798 Total cost of revenue 256,578 258,024
243,920 216,664 975,186 205,495 19.9 % 51,083
Selling, general and administrative 49,482 38,988 42,560 38,930
169,960 37,643 23.9 % 11,839 Gains, losses and other items, net
(545 ) (2,370 ) 43,175 (1,694 )
38,566 347 -163.7 % (892 ) Total
operating costs and expenses 305,515 294,642 329,655 253,900
1,183,712 243,485 20.3 % 62,030 Income (loss) from
operations 25,558 34,293 (8,599 ) 41,609 92,861 12,496 -51.1 %
(13,062 )
% Margin
7.7 % 10.4 % -2.7 %
14.1 % 7.3 % 4.9 % Other
income (expense) Interest expense (9,459 ) (8,591 ) (8,105 ) (6,441
) (32,596 ) (5,505 ) 41.8 % 3,954 Other, net 1,359
287 140 163 1,949
(118 ) -108.7 % (1,477 ) Total other income (expense) (8,100
) (8,304 ) (7,965 ) (6,278 ) (30,647 ) (5,623 ) 30.6 % 2,477
Earnings (loss) before income taxes 17,458 25,989 (16,564 ) 35,331
62,214 6,873 -60.6 % (10,585 ) Income taxes 6,808
10,136 (5,115 ) 12,881 24,710
2,679 60.6 % 4,129 Net earnings
(loss) 10,650 15,853 (11,449 )
22,450 37,504 4,194 -60.6 %
(6,456 ) Diluted earnings (loss) per share 0.14
0.20 (0.15 ) 0.29
0.48 0.05 -64.3 % (0.09 ) ACXIOM CORPORATION
AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in
thousands)
Q1 FY09 to Q1 FY10 06/30/08 09/30/08
12/31/08 03/31/09 FY2009 06/30/09 % $ Revenue:
Services 236,695 233,605 231,077 218,885 920,262 199,326
-15.8 % (37,369 ) Products 94,378 95,330
89,979 76,624 356,311
56,655 -40.0 % (37,723 ) Total revenue 331,073
328,935 321,056 295,509
1,276,573 255,981 -22.7 %
(75,092 ) Income from operations: Services 38,626
40,649 43,436 43,705 166,416 25,516 -33.9 % (13,110 ) Products
4,578 8,485 9,585 11,537 34,185 (146 ) -103.2 % (4,724 ) Corporate
& other (17,646 ) (14,841 ) (61,620 )
(13,633 ) (107,740 ) (12,874 ) 27.0 % 4,772
Total income (loss) from operations 25,558
34,293 (8,599 ) 41,609 92,861
12,496 -51.1 % (13,062 ) Margin:
Services 16.3 % 17.4 % 18.8 % 20.0 % 18.1 % 12.8 % Products 4.9 %
8.9 % 10.7 % 15.1 % 9.6 % -0.3 % Total 7.7 % 10.4 % -2.7 %
14.1 % 7.3 % 4.9 %
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