ACXM Acxiom Holdngs (delisted)

Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for the first quarter of fiscal year 2012 ended June 30, 2011. Acxiom will hold a conference call at 9:00 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.

Jerry Gramaglia, Acxiom’s interim chief executive officer, said, "We achieved overall solid financial performance for the quarter and are pleased with our continued revenue growth, especially in our core U.S. marketing services and products business. During the quarter we increased spending in sales, account management and service delivery to continue our momentum and position Acxiom for strong performance through the balance of the year."

First Quarter 2012 Highlights:

• Revenue increased by 6.9% in the current quarter ended June 30, 2011 to $288.9 million, compared to $270.4 million for the quarter ended June 30, 2010.
• Income from operations of $22.2 million in the current-year first quarter, compared to income from operations of $22.1 million in the first quarter of the prior year.
• Earnings per diluted share attributable to Acxiom stockholders of $0.13 in the current quarter, compared to earnings per share of $0.12 in the first quarter of fiscal 2011.
• Operating cash flow of $32.8 million, compared to $17.0 million in the first quarter a year ago.
• Free cash flow available to equity of $9.6 million, compared to negative $6.3 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, 2011 was $225.6 million, up 7.1%, compared to $210.7 million for the quarter ended June 30, 2010. Income from operations for the current first quarter was $20.2 million, down 3.4% compared to $20.9 million in the prior-year first quarter.
• Information Products: Revenue for the quarter increased 6.0% to $63.3 million, compared with $59.7 million in the first quarter a year ago. Income from operations for the quarter was $2.3 million, compared to $1.1 million in the first quarter of the previous year.
• Debt prepayment: The company prepaid $25 million of its term loan due March 15, 2015 in the current quarter. Subsequent to the end of the June 30, 2011 quarter, the company prepaid an additional $75 million of the term loan.
• Middle East and North Africa (MENA) disposal: Subsequent to the end of the June 30, 2011 quarter, the company disposed of its ownership interest in MENA.

Web Link to Financials

You may link to http://www.acxiom.com/FY12_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 our expectation for strong performance for the balance of the year. 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 be unable to quickly and seamlessly integrate a new chief executive officer and chief financial officer; 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 Reports on Form 10-K for the year ended March 31, 2011, which was filed with the Securities and Exchange Commission on May 27, 2011.

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, $ % 2011 2010 Variance   Variance   Revenue: Services 225,604 210,656 14,948 7.1 % Products 63,330   59,739   3,591 6.0 % Total revenue 288,934 270,395 18,539 6.9 %   Operating costs and expenses: Cost of revenue Services 180,463 164,650 (15,813 ) (9.6 %) Products 48,878   45,771   (3,107 ) (6.8 %) Total cost of revenue 229,341 210,421 (18,920 ) (9.0 %)   Services gross margin 20.0 % 21.8 % Products gross margin 22.8 % 23.4 % Total gross margin 20.6 % 22.2 %   Selling, general and administrative 37,119 37,955 836 2.2 % Gains, losses and other items, net 244   (57 ) (301 ) (528.1 %)   Total operating costs and expenses 266,704   248,319   (18,385 ) (7.4 %)   Income from operations 22,230   22,076   154 0.7 %   Other income (expense): Interest expense (5,455 ) (5,898 ) 443 7.5 % Other, net (87 ) (451 ) 364 80.7 %   Total other income (expense) (5,542 ) (6,349 ) 807 12.7 %   Earnings before income taxes 16,688 15,727 961 6.1 %   Income taxes 6,673   6,291   (382 ) (6.1 %)   Net earnings 10,015 9,436 579 6.1 %   Less: Net earnings (loss) attributable to noncontrolling interest (960 ) (369 ) (591 ) -   Net earnings attributable to Acxiom 10,975   9,805   1,170 11.9 %   Earnings per share:   Basic 0.12   0.12   0.00 0.0 %   Diluted 0.12   0.12   0.00 0.0 %   Earnings per share attributable to Acxiom stockholders:   Basic 0.14   0.12   0.02 16.7 %   Diluted 0.13   0.12   0.01 8.3 %                   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, 2011 2010   Basic earnings per share:   Numerator - net earnings 10,015 9,436   Denominator - weighted-average shares outstanding 80,942 79,741   Basic earnings per share 0.12 0.12   Diluted earnings per share:   Numerator - net earnings 10,015 9,436   Denominator - weighted-average shares outstanding 80,942 79,741   Dilutive effect of common stock options, warrants and restricted stock 1,072 1,715   82,014 81,456   Diluted earnings per share 0.12 0.12           Basic earnings per share attributable to Acxiom stockholders:   Numerator - net earnings attributable to Acxiom 10,975 9,805   Denominator - weighted-average shares outstanding 80,942 79,741   Basic earnings per share attributable to Acxiom stockholders 0.14 0.12   Diluted earnings per share attributable to Acxiom stockholders:   Numerator - net earnings attributable to Acxiom 10,975 9,805   Denominator - weighted-average shares outstanding 80,942 79,741   Dilutive effect of common stock options, warrants, and restricted stock 1,072 1,715   82,014 81,456   Diluted earnings per share attributable to Acxiom stockholders 0.13 0.12   ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)                     For the Three Months Ended June 30, June 30, Revenue: 2011 2010   Information services 225,604 210,656 Information products 63,330   59,739     Total revenue 288,934   270,395       Income from operations:   Information services 20,172 20,879 Information products 2,302 1,140 Other (244 ) 57     Total income from operations 22,230   22,076     Margin:   Information services 8.9 % 9.9 % Information products 3.6 % 1.9 %   Total margin 7.7 % 8.2 %   ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)                 June 30, March 31, $ % 2011 2011 Variance Variance

Assets

Current assets: Cash and cash equivalents 191,094 207,023 (15,929 ) (7.7 %) Trade accounts receivable, net 180,610 176,654 3,956 2.2 % Deferred income taxes 12,773 12,480 293 2.3 % Refundable income taxes 1,900 7,402 (5,502 ) (74.3 %) Other current assets 64,156   55,691   8,465 15.2 %   Total current assets 450,533   459,250   (8,717 ) (1.9 %)   Property and equipment 899,047 888,717 10,330 1.2 % Less - accumulated depreciation and amortization 643,618   633,410   10,208 1.6 %   Property and equipment, net 255,429   255,307   122 0.0 %   Software, net of accumulated amortization 22,896 26,412 (3,516 ) (13.3 %) Goodwill 418,988 417,654 1,334 0.3 % Purchased software licenses, net of accumulated amortization 36,067 38,583 (2,516 ) (6.5 %) Deferred costs, net 75,757 81,837 (6,080 ) (7.4 %) Data acquisition costs 16,976 17,627 (651 ) (3.7 %) Other assets, net 8,579   9,955   (1,376 ) (13.8 %)   1,285,225   1,306,625   (21,400 ) (1.6 %)  

Liabilities and Stockholders' Equity

Current liabilities: Current installments of long-term debt 28,112 27,978 (134 ) (0.5 %) Trade accounts payable 28,999 27,507 (1,492 ) (5.4 %) Accrued payroll and related expenses 30,893 42,236 11,343 26.9 % Other accrued expenses 76,831 75,852 (979 ) (1.3 %) Deferred revenue 57,426 55,921 (1,505 ) (2.7 %)   Total current liabilities 222,261   229,494   7,233 3.2 %   Long-term debt 365,565 394,260 28,695 7.3 %   Deferred income taxes 84,446 84,360 (86 ) (0.1 %)   Other liabilities 6,505 7,478 973 13.0 %   Stockholders' equity: Common stock 11,879 11,777 102 0.9 % Additional paid-in capital 842,655 837,439 5,216 0.6 % Retained earnings 470,071 459,096 10,975 2.4 % Accumulated other comprehensive income (loss) 18,997 15,991 3,006 18.8 % Treasury stock, at cost (742,049 ) (739,125 ) (2,924 ) 0.4 % Total Acxiom stockholders' equity 601,553 585,178 16,375 2.8 % Noncontrolling interest 4,895   5,855   (960 ) (16.4 %)   Total equity 606,448   591,033   15,415 2.6 %   1,285,225   1,306,625   (21,400 ) (1.6 %)         ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)   For the Three Months Ended June 30, 2011     2010   Cash flows from operating activities: Net earnings 10,015 9,436 Non-cash operating activities: Depreciation and amortization 35,295 35,986 Deferred income taxes 37 1,435 Non-cash stock compensation expense 2,355 2,972 Changes in operating assets and liabilities: Accounts receivable (3,622) (16,836) Other assets (8,517) (1,467) Deferred costs (386) (9,981) Accounts payable and other liabilities (3,674) (7,121) Deferred revenue 1,251 2,564 Net cash provided by operating activities 32,754 16,988 Cash flows from investing activities: Capitalized software (529) (1,226) Capital expenditures (12,577) (8,752) Data acquisition costs (2,776) (4,326) Payment received from investments - 175 Net cash paid in acquisitions (255) (1,978) Net cash used by investing activities (16,137) (16,107) Cash flows from financing activities: Payments of debt (32,312) (8,964) Sale of common stock 39 3,801 Contingent consideration paid for prior acquisitions (326) - Net cash used by financing activities (32,599) (5,163) Effect of exchange rate changes on cash 53 (1,365)   Net change in cash and cash equivalents (15,929) (5,647) Cash and cash equivalents at beginning of period 207,023 224,104 Cash and cash equivalents at end of period 191,094 218,457   Supplemental cash flow information: Cash paid (received) during the period for: Interest 5,589 5,780 Income taxes 1,098 3,358 Payments on capital leases and installment payment arrangements 4,794 5,968 Payments on software and data license liabilities 367 893 Other debt payments, excluding line of credit 2,151 2,103 Prepayments of debt 25,000 - Noncash investing and financing activities:

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

3,747 10,268   ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands)                                                         06/30/10     09/30/10     12/31/10     03/31/11     FY2011 06/30/11   Net cash provided by operating activities 16,988 42,966 64,230 42,035 166,219 32,754   Plus: Sale of assets - - - - - -   Less: Capitalized software (1,226 ) (1,341 ) (1,025 ) (963 ) (4,555 ) (529 ) Capital expenditures (8,752 ) (21,734 ) (16,322 ) (12,213 ) (59,021 ) (12,577 ) Data acquisition costs (4,326 ) (2,625 ) (3,765 ) (2,650 ) (13,366 ) (2,776 ) Payments on capital leases and installment payment arrangements (5,968 ) (5,411 ) (5,726 ) (5,252 ) (22,357 ) (4,794 ) Payments on software and data license liabilities (893 ) (164 ) (120 ) (4,139 ) (5,316 ) (367 ) Other required debt payments (2,103 )     (2,028 )     (2,143 )     (2,154 )     (8,428 ) (2,151 )   Total (6,280 )     9,663       35,129       14,664       53,176   9,560       CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share)                                   Q1 FY12 to Q1 FY11 06/30/10   09/30/10   12/31/10   03/31/11   FY2011 06/30/11 %   $ Revenue: Services 210,656 225,584 232,798 224,556 893,594 225,604 7.1 % 14,948 Products 59,739     66,085     66,312     74,240     266,376   63,330   6.0 %   3,591   Total revenue 270,395 291,669 299,110 298,796 1,159,970 288,934 6.9 % 18,539   Operating costs and expenses: Cost of revenue Services 164,650 175,687 178,586 176,065 694,988 180,463 -9.6 % (15,813 ) Products 45,771     48,320     48,258     47,551     189,900   48,878   -6.8 %   (3,107 ) Total cost of revenue 210,421 224,007 226,844 223,616 884,888 229,341 -9.0 % (18,920 )     Selling, general and administrative 37,955 40,274 41,331 40,324 159,884 37,119 2.2 % 836 Impairment of goodwill and other intangibles 79,674 79,674

0

 

 

Gains, losses and other items, net (57 )   78     (3,640 )   8,219     4,600   244   -528.1 %   (301 )   Total operating costs and expenses 248,319 264,359 264,535 351,833 1,129,046 266,704 -7.4 % (18,385 )   Income from operations 22,076 27,310 34,575 (53,037 ) 30,924 22,230 0.7 % 154 % Margin 8.2 % 9.4 % 11.6 % -17.8 % 2.7 % 7.7 % Other income (expense) Interest expense (5,898 ) (6,260 ) (6,006 ) (5,659 ) (23,823 ) (5,455 ) 7.5 % (443 ) Other, net (451 )   111     (299 )   (827 )   (1,466 ) (87 ) 80.7 %   (364 ) Total other income (expense) (6,349 ) (6,149 ) (6,305 ) (6,486 ) (25,289 ) (5,542 ) 12.7 % (807 )   Earnings before income taxes 15,727 21,161 28,270 (59,523 ) 5,635 16,688 6.1 % 961 Income taxes 6,291     8,464     7,856     11,466     34,077   6,673   -6.1 %   (382 )   Net earnings (loss) 9,436 12,697 20,414 (70,989 ) (28,442 ) 10,015 6.1 % 579  

Less: Net loss attributable to noncontrolling interest

(369 )   (584 )   (409 )   (3,933 )   (5,295 )   (960 )   160.2 %   (591 )   Net earnings (loss) attributable to Acxiom 9,805     13,281     20,823     (67,056 )   (23,147 ) 10,975   11.9 %   1,170      

Diluted earnings (loss) per share attributable to Acxiom shareholders

0.12     0.16     0.25     (0.83 )   (0.29 ) 0.13   8.3 %   0.01     ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)                                         Q1 FY11 to Q1 FY12 06/30/10   09/30/10   12/31/10   03/31/11   FY2011 06/30/11   %   $ Revenue:   Services 210,656 225,584 232,798 224,556 893,594 225,604 7.1 % 14,948 Products 59,739     66,085     66,312     74,240     266,376   63,330     6.0 %   3,591     Total revenue 270,395     291,669     299,110     298,796     1,159,970   288,934     6.9 %   18,539     Income from operations:   Services 20,879 22,952 26,390 21,181 91,402 20,172 -3.4 % (707 ) Products 1,140 4,436 4,545 13,675 23,796 2,302 101.9 % 1,162 Other 57     (78 )   3,640     (87,893 )   (84,274 ) (244 )   -528.1 %   (301 )   Total income (loss) from operations 22,076     27,310     34,575     (53,037 )   30,924   22,230     0.7 %   154     Margin:   Services 9.9 % 10.2 % 11.3 % 9.4 % 10.2 % 8.9 % Products 1.9 % 6.7 % 6.9 % 18.4 % 8.9 % 3.6 %   Total 8.2 % 9.4 % 11.6 % -17.8 % 2.7 % 7.7 %  

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