ACXM Acxiom Holdngs (delisted)

Acxiom® Corporation (Nasdaq: ACXM), a global leader in interactive marketing, today announced financial results for the first quarter of fiscal year 2011 ended June 30, 2010. Acxiom will hold a conference call at 10:00 a.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. The company will reference presentation slides that will be available on the website prior to the call.

John Meyer, Acxiom’s chief executive officer and president, said, “I am pleased with our performance this quarter. Despite uneven economic recovery, we recorded solid year-over-year revenue growth of approximately six percent. The majority of this increased revenue was converted into operating income, which increased on an annual basis by almost 77 percent. This increased operating leverage reflects the actions we undertook over the past two years to improve cost and performance efficiencies in our business.”

First Quarter 2011 Highlights:

• Revenue increased by 5.6% in the current quarter ended June 30, 2010 to $270.4 million, compared to $256.0 million for the quarter ended June 30, 2009.
• Income from operations of $22.1 million in the current-year first quarter, up 76.7%, compared to income from operations of $12.5 million in the first quarter of the prior year.
• Earnings per diluted share of $0.12 in the current quarter, compared to earnings per diluted share of $0.05 in the first quarter of fiscal 2010.
• Operating cash flow of $17.0 million compared to $16.2 million in the first quarter a year ago.
• Free cash flow available to equity of negative $6.3 million, compared to negative $13.2 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 ended June 30, 2010 was $210.7 million, up 5.7%, compared to $199.3 million for the quarter ended June 30, 2009. Income from operations for the current first quarter was $20.9 million, up 31.8% compared to $15.8 million in the prior-year first quarter.
• Information Products: Revenue for the quarter increased 5.4% to $59.7 million, compared with $56.7 million in the first quarter a year ago. Income from operations for the quarter was $1.1 million, compared to loss from operations of $3.0 million in the first quarter of the previous year.
• Brazil Acquisition: The company announced a strategic expansion into the South American market with the signing of a definitive agreement for the acquisition of a controlling interest in GoDigital, a data quality and precision marketing company in Sao Paulo and Porto Alegre, Brazil. Founded in 2000, GoDigital has two unique, proprietary products – GoQuality, which offers total data quality management, and Claridata, a web-based suite that offers multichannel marketing campaign management and geo-analytical indicators for targeted marketing and campaign analysis.

Web Link to Financials

You may link to http://www.acxiom.com/FY11_Q1_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is a recognized leader in marketing technology and services 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 of 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, South America and the Middle East. 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 an improvement in the economic outlook, and a continued return to our historical seasonal revenue and operating income patterns. 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, 2010, which was filed with the Securities and Exchange Commission on May 26, 2010.

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, $ % 2010 2009 Variance Variance   Revenue: Services 210,656 199,326 11,330 5.7 % Products 59,739   56,655   3,084 5.4 % Total revenue 270,395 255,981 14,414 5.6 %   Operating costs and expenses: Cost of revenue Services 164,650 159,576 (5,074 ) (3.2 %) Products 45,771   45,919   148 0.3 % Total cost of revenue 210,421 205,495 (4,926 ) (2.4 %)   Services gross margin 21.8 % 19.9 % Products gross margin 23.4 % 18.9 % Total gross margin 22.2 % 19.7 %   Selling, general and administrative 37,955 37,643 (312 ) (0.8 %) Gains, losses and other items, net (57 ) 347   404 116.4 %   Total operating costs and expenses 248,319   243,485   (4,834 ) (2.0 %)   Income from operations 22,076   12,496   9,580 76.7 %   Other income (expense): Interest expense (5,898 ) (5,505 ) (393 ) (7.1 %) Other, net (451 ) (118 ) (333 ) (282.2 %)   Total other income (expense) (6,349 ) (5,623 ) (726 ) (12.9 %)   Earnings before income taxes 15,727 6,873 8,854 128.8 %   Income taxes 6,291   2,679   (3,612 ) (134.8 %)   Net earnings 9,436 4,194 5,242 125.0 %   Less: Net earnings (loss) attributable to noncontrolling interest (369 ) -   (369 ) -   Net earnings attributable to Acxiom 9,805   4,194   5,611 133.8 %   Earnings per share:   Basic 0.12   0.05   0.07 140.0 %   Diluted 0.12   0.05   0.07 140.0 %   Earnings per share attributable to Acxiom stockholders:   Basic 0.12   0.05   0.07 140.0 %   Diluted 0.12   0.05   0.07 140.0 %           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, 2010 2009   Basic earnings per share:   Numerator - net earnings 9,436 4,194   Denominator - weighted-average shares outstanding 79,741 78,667   Basic earnings per share 0.12 0.05   Diluted earnings per share:   Numerator - net earnings 9,436 4,194   Denominator - weighted-average shares outstanding 79,741 78,667   Dilutive effect of common stock options, warrants and restricted stock 1,715 345   81,456 79,012   Diluted earnings per share 0.12 0.05           Basic earnings per share attributable to Acxiom stockholders:   Numerator - net earnings attributable to Acxiom 9,805 4,194   Denominator - weighted-average shares outstanding 79,741 78,667   Basic earnings per share attributable to Acxiom stockholders 0.12 0.05   Diluted earnings per share attributable to Acxiom stockholders:   Numerator - net earnings attributable to Acxiom 9,805 4,194   Denominator - weighted-average shares outstanding 79,741 78,667   Dilutive effect of common stock options, warrants, and restricted stock 1,715 345   81,456 79,012   Diluted earnings per share attributable to Acxiom stockholders 0.12 0.05       ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)     For the Three Months Ended   June 30, June 30, Revenue: 2010 2009   Information services 210,656 199,326 Information products 59,739   56,655     Total revenue 270,395   255,981       Income from operations:   Information services 20,879 15,838 Information products 1,140 (2,995 ) Other 57   (347 )   Total income from operations 22,076   12,496     Margin:   Information services 9.9 % 7.9 % Information products 1.9 % -5.3 %   Total margin 8.2 % 4.9 %         ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)   June 30, March 31, $ % 2010 2010 Variance Variance

Assets

Current assets: Cash and cash equivalents 218,457 224,104 (5,647 ) (2.5 %) Trade accounts receivable, net 183,644 168,522 15,122 9.0 % Deferred income taxes 11,765 11,874 (109 ) (0.9 %) Other current assets 52,799   54,205   (1,406 ) (2.6 %)   Total current assets 466,665   458,705   7,960 1.7 %   Property and equipment 840,179 824,084 16,095 2.0 % Less - accumulated depreciation and amortization 599,839   587,245   12,594 2.1 %   Property and equipment, net 240,340   236,839   3,501 1.5 %   Software, net of accumulated amortization 34,771 38,845 (4,074 ) (10.5 %) Goodwill 464,374 470,261 (5,887 ) (1.3 %) Purchased software licenses, net of accumulated amortization 49,005 51,356 (2,351 ) (4.6 %) Deferred costs, net 72,983 68,914 4,069 5.9 % Data acquisition costs 20,945 21,931 (986 ) (4.5 %) Other assets, net 14,944   16,569   (1,625 ) (9.8 %)   1,364,027   1,363,420   607 0.0 %  

Liabilities and Stockholders' Equity

Current liabilities: Current installments of long-term debt 42,169 42,106 63 0.1 % Trade accounts payable 40,041 42,774 (2,733 ) (6.4 %) Accrued payroll and related expenses 27,664 36,517 (8,853 ) (24.2 %) Other accrued expenses 74,826 75,632 (806 ) (1.1 %) Deferred revenue 56,335 55,567 768 1.4 % Income taxes 3,965   2,460   1,505 61.2 %   Total current liabilities 245,000   255,056   (10,056 ) (3.9 %)   Long-term debt 459,833 458,629 1,204 0.3 %   Deferred income taxes 63,595 61,284 2,311 3.8 %   Other liabilities 9,915 9,954 (39 ) (0.4 %)   Stockholders' equity: Common stock 11,715 11,662 53 0.5 % Additional paid-in capital 821,649 814,929 6,720 0.8 % Retained earnings 492,048 482,243 9,805 2.0 % Accumulated other comprehensive income (loss) (4,855 ) 4,167 (9,022 ) (216.5 %) Treasury stock, at cost (738,601 ) (738,601 ) 0 0.0 % Total Acxiom stockholders' equity 581,956 574,400 7,556 1.3 % Noncontrolling interest 3,728   4,097   (369 ) (9.0 %)   Total equity 585,684   578,497   7,187 1.2 %   1,364,027   1,363,420   607 0.0 %     ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)   For the Three Months Ended June 30, 2010   2009   Cash flows from operating activities: Net earnings 9,436 4,194 Non-cash operating activities: Depreciation and amortization 35,986 40,595 Deferred income taxes 1,435 2,496 Non-cash stock compensation expense 2,972 2,388 Changes in operating assets and liabilities: Accounts receivable (16,836 ) (4,335 ) Other assets (1,467 ) 4,651 Deferred costs (9,981 ) (906 ) Accounts payable and other liabilities (7,121 ) (32,017 ) Deferred revenue 2,564   (900 ) Net cash provided by operating activities 16,988   16,166   Cash flows from investing activities: Capitalized software (1,226 ) (2,384 ) Capital expenditures (8,752 ) (7,431 ) Data acquisition costs (4,326 ) (5,777 ) Payment received from investments 175 - Net cash paid in acquisitions (1,978 ) -   Net cash used by investing activities (16,107 ) (15,592 ) Cash flows from financing activities: Payments of debt (8,964 ) (13,724 ) Sale of common stock 3,801 2,427 Acquisition of treasury stock -   (307 ) Net cash used by financing activities (5,163 ) (11,604 ) Effect of exchange rate changes on cash (1,365 ) 1,534     Net change in cash and cash equivalents (5,647 ) (9,496 ) Cash and cash equivalents at beginning of period 224,104   177,166   Cash and cash equivalents at end of period 218,457   167,670     Supplemental cash flow information: Cash paid (received) during the period for: Interest 5,780 5,258 Income taxes 3,358 (5,052 ) Payments on capital leases and installment payment arrangements 5,968 7,794 Payments on software and data license liabilities 893 3,878 Other debt payments, excluding line of credit 2,103 2,052 Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

10,268 3,823               ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands)                       06/30/09   09/30/09   12/31/09   03/31/10   FY2010 06/30/10   Net cash provided by operating activities 16,166 60,703 74,509 87,904 239,282 16,988   Plus: Sale of assets - - 1,058 - 1,058 -   Less: Capitalized software (2,384 ) (2,431 ) (1,846 ) (1,596 ) (8,257 ) (1,226 ) Capital expenditures (7,431 ) (14,462 ) (9,479 ) (26,536 ) (57,908 ) (8,752 ) Data acquisition costs (5,777 ) (3,004 ) (5,450 ) (4,577 ) (18,808 ) (4,326 ) Payments on capital leases and installment payment arrangements (7,794 ) (7,504 ) (7,309 ) (7,090 ) (29,697 ) (5,968 ) Payments on software and data license liabilities (3,878 ) (1,840 ) (416 ) (1,392 ) (7,526 ) (893 ) Other required debt payments (2,052 )   (2,058 )   (2,091 )   (3,597 )   (9,798 ) (2,103 )   Total (13,150 )   29,404     48,976     43,116     108,346   (6,280 )   ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share)                                     Q1 FY10 to Q1 FY11 06/30/09   09/30/09   12/31/09   03/31/10   FY2010 06/30/10 %   $ Revenue: Services 199,326 210,213 218,340 221,553 849,432 210,656 5.7 % 11,330 Products 56,655     60,892     65,467     66,789     249,803   59,739   5.4 %   3,084   Total revenue 255,981 271,105 283,807 288,342 1,099,235 270,395 5.6 % 14,414   Operating costs and expenses: Cost of revenue Services 159,576 165,792 163,206 166,085 654,659 164,650 3.2 % 5,074 Products 45,919     46,129     46,727     45,835     184,610   45,771   -0.3 %   (148 ) Total cost of revenue 205,495 211,921 209,933 211,920 839,269 210,421 2.4 % 4,926     Selling, general and administrative 37,643 37,964 43,477 43,013 162,097 37,955 0.8 % 312 Gains, losses and other items, net 347     (27 )   538     (1,802 )   (944 ) (57 ) -116.4 %   (404 )   Total operating costs and expenses 243,485 249,858 253,948 253,131 1,000,422 248,319 2.0 % 4,834   Income from operations 12,496 21,247 29,859 35,211 98,813 22,076 76.7 % 9,580 % Margin 4.9 % 7.8 % 10.5 % 12.2 % 9.0 % 8.2 % Other income (expense) Interest expense (5,505 ) (5,423 ) (5,687 ) (5,865 ) (22,480 ) (5,898 ) 7.1 % (393 ) Other, net (118 )   223     198     122     425   (451 ) 282.2 %   (333 ) Total other income (expense) (5,623 ) (5,200 ) (5,489 ) (5,743 ) (22,055 ) (6,349 ) 12.9 % (726 )   Earnings before income taxes 6,873 16,047 24,370 29,468 76,758 15,727 128.8 % 8,854 Income taxes 2,679     6,602     10,212     13,106     32,599   6,291   134.8 %   3,612     Net earnings 4,194 9,445 14,158 16,362 44,159 9,436 125.0 % 5,242  

Less: Net earnings (loss) attributable to noncontrolling interest

-     -     (104 )   (286 )   (390 ) (369 )   -     (369 )   Net earnings attributable to Acxiom 4,194     9,445     14,262     16,648     44,549   9,805   133.8 %   5,611      

 

Diluted earnings per share attributable to Acxiom shareholders

0.05     0.12     0.18     0.21     0.56   0.12   140.0 %   0.07     ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)                                     Q1 FY10 to Q1 FY11 06/30/09   09/30/09   12/31/09   03/31/10   FY2010 06/30/10 %   $ Revenue:   Services 199,326 210,213 218,340 221,553 849,432 210,656 5.7 % 11,330 Products 56,655     60,892     65,467     66,789     249,803   59,739   5.4 %   3,084   Total revenue 255,981     271,105     283,807     288,342     1,099,235   270,395   5.6 %   14,414   Income from operations:   Services 15,838 19,971 27,565 27,639 91,013 20,879 31.8 % 5,041 Products (2,995 ) 1,249 2,832 5,770 6,856 1,140 -138.1 % 4,135 Other (347 )   27     (538 )   1,802     944   57   -116.4 %   404   Total income from operations 12,496     21,247     29,859     35,211     98,813   22,076   76.7 %   9,580   Margin:   Services 7.9 % 9.5 % 12.6 % 12.5 % 10.7 % 9.9 % Products -5.3 % 2.1 % 4.3 % 8.6 % 2.7 % 1.9 %   Total 4.9 % 7.8 % 10.5 % 12.2 % 9.0 % 8.2 %  

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