Acxiom� Corporation (Nasdaq: ACXM) today reported full-year and
fourth-quarter financial results for fiscal 2007 ended March 31,
2007, and also announced a new organizational alignment designed to
increase focus on the company�s three core areas of business. The
reported results, excluding unusual charges, met the Company�s
expectations and consensus analysts� estimates of $.20 earnings per
share for the quarter. Full 2007 fiscal-year results include
revenue of $1.4 billion, income from operations of $158.8 million
and diluted earnings per share of $.84. These results include the
impact in the fourth quarter of unusual charges that reduced
diluted EPS for the fourth quarter and full fiscal year by $.12.
Fourth-quarter results include revenue of $357.3 million, income
from operations of $29.3 million, diluted earnings per share of
$.08, operating cash flow of $76.5 million and free cash flow
available to equity of $15.4 million. Acxiom will hold a conference
call at 6:45 p.m. CDT today to discuss this information further.
Interested parties are invited to listen to the call, which will be
broadcast via the Internet at www.acxiom.com. Acxiom�s new
organizational structure reflects the unique characteristics within
each area of the business and will facilitate the execution of
operational strategies designed to maximize financial performance
in each division. The re-segmentation took effect April 1, 2007,
the first day of the company�s fiscal year 2008. �This change is
all about bringing focus and dedicated management to each key area
of our business,� Acxiom chairman and chief executive Charles D.
Morgan said. �We believe this structure more closely aligns with
our overall mission and therefore will lead to greater returns for
our shareholders.� Acxiom is composed of, and will report financial
results by, three divisions under a single company umbrella. Those
divisions, chief executives, and business characteristics include:
Acxiom Services Division � Lee Hodges, chief executive: The
division develops, sells and delivers industry-tailored solutions
globally through the integration of products, services and
consulting. The primary target market is the Fortune 1000 and other
large global firms. This division is responsible for Acxiom�s
marketing database solutions, customer data integration (CDI)
offerings, e-mail and internet search marketing services,
consulting and professional services, and the Business Information
Grid (BIG) non-hosted solutions that will be offered in fiscal
2008, utilizing a client-intimate engagement model characterized by
long-term client relationships. Acxiom Information Products
Division � Alex Dietz, chief executive: The division develops and
sells all data and risk mitigation products, including InfoBase�,
Personicx� and InsightIdentify in the U.S. as well as all Acxiom
European Data Products. It focuses on product development, product
lifecycle management, data content management and innovation. Its
primary go-to-market channels are the Acxiom Services Division for
Fortune 1000 clients, a direct sales force for the mid-tier and the
broker and reseller market. Acxiom Infrastructure Management
Division � Marty Sunde, chief executive: The division is fully
responsible for developing and delivering Information Technology
products and services that improve a company�s ability to manage
its information technology deliver platform at lower costs and
higher efficiencies. Such offerings include traditional IT
outsourcing and transformational solutions such as the Acxiom data
factory. The division primarily focuses on supporting an entire
infrastructure for high growth, emerging companies, or specific
components of larger enterprise IT organizations. Operational
excellence and efficient asset and capital management practices
characterize this division. �At this point in Acxiom�s evolution,
re-segmenting our company into three autonomous but very tightly
connected divisions creates a business that can be more effectively
and efficiently managed,� Morgan said. �We�ll be able to make
better-targeted investment and operational decisions in each area,
and the added transparency into our financial performance will
provide more clarity � internally and externally.� Acxiom also
announced that it has hired Chris Wolf to become the company�s
Chief Financial Officer. Wolf will begin working at Acxiom in a few
weeks and will transition into the CFO role over the next few
months. Wolf most recently has served as a senior advisor at
Boulder Specialty Brands and previously was executive vice
president and CFO at Catalina Marketing Corporation. Acxiom�s
fiscal 2007 highlights include: Revenue of $1.40 billion, up 4.7
percent from $1.33 billion a year ago, an increase of $63 million
in annual revenue. Income from operations of $158.8 million, an
increase of 21.1 percent compared to $131.1 million in fiscal 2006.
Diluted earnings per share of $.84, up 18 percent from $.71 the
year before. Fiscal year results include the impact of pretax
charges of $9.7 million and income tax expense of $3.8 million
related to closing Acxiom�s business in Spain, cost of severance
and retirement of debt in the U.S. and additional research tax
credit reserves that reduced diluted EPS for the full fiscal year
by $.12. Operating cash flow of $260.0 million and free cash flow
available to equity of $55.2 million. The acquisition of Equitec, a
business with strong marketing and merchandizing optimization
expertise in the retail industry, based in Cleveland, Ohio. The
acquisition of Harbinger Technologies Group, a McLean, Va.-based
international consulting and technology firm that develops software
tools and training programs for personnel involved in homeland
defense, national security and the prevention of international
terrorism. The acquisition of Kefta, the leading company for
real-time, dynamic personalization solutions for the Internet,
based in San Francisco. Acxiom�s fourth-quarter highlights include:
Revenue of $357.3 million, a 4 percent increase over $344.3 million
in the fourth quarter of fiscal 2006. Income from operations of
$29.3 million, a 34 percent decrease from $44.6 million the year
before. Diluted earnings per share of $.08, down 69 percent from
$.26 in the same period a year ago. The quarter results include the
impact of pretax charges of $9.7 million and income tax expense of
$3.8 million related to closing Acxiom�s business in Spain, cost of
severance and retirement of debt in the U.S. and additional
research tax credit reserves that reduced diluted EPS for the
fourth quarter by $.12. Operating cash flow of $76.5 million and
free cash flow available to equity of $15.4 million. Free cash flow
available to equity is a non-GAAP financial measure, and a
reconciliation to the comparable GAAP measure, operating cash flow,
is attached to this press release. Fiscal 2007 Recognition In
fiscal 2007, Acxiom: Was named as one of the top 30 providers of
financial services in the �FinTech 100� listing of the top
technology providers as complied by American Banker and the
research firm Financial Insights. Saw its Acxiom Digital business
ranked No. 17 by Advertising Age magazine on its list of top 50
interactive agencies based on annual U.S. revenues. Was included on
Forbes magazine�s �Platinum 400� list of the best large publicly
traded companies in America. Outlook Acxiom�s Board of Directors
has approved a business plan for fiscal 2008 of $1.02 in earnings
per share. The Company continues to focus on its initiatives to
improve performance and is in the process of restructuring into the
three new divisions previously explained. About Acxiom Acxiom
Corporation (Nasdaq: ACXM) integrates data, services and technology
to create and deliver customer and information management solutions
for many of the largest, most respected companies in the world. The
core components of Acxiom�s innovative solutions are Customer Data
Integration (CDI) technology, data, database services, IT
outsourcing, consulting and analytics, and privacy leadership.
Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas,
with locations throughout the United States and Europe, and in
Australia, China and Canada. For more information, visit
www.acxiom.com. This release and today�s conference call contain
forward-looking statements that are subject to certain risks and
uncertainties that could cause actual results to differ materially.
Such statements may include but are not necessarily limited to the
following: that we expect that our emphasis on revenue growth will
lead to increased rates of revenue growth, that we expect that
continued focus on expense controls will lead to continued
improvement in operating margins, that the projected revenue,
operating margin, return on assets and return on invested capital,
operating cash flow and free cash flow, borrowings, dividends and
other metrics will be within the estimated ranges; that the
estimations of revenue, earnings, cash flow, growth rates,
restructuring charges and expense reductions will be within the
estimated ranges; and that the business pipeline and our
anticipated cost structure will allow us to continue to meet or
exceed revenue, cash flow and other projections. The following are
important factors, among others, that could cause actual results to
differ materially from these forward-looking statements: The
possibility that certain contracts may not be closed, or may not be
closed within the anticipated time frames; the possibility that
clients may attempt to reduce the amount of business they do with
the Company; the possibility that in the event that a change of
control of the Company was sought that certain of the clients of
the Company would invoke certain provisions in their contracts
resulting in a decline in the revenue and profit of the Company;
the possibility that certain contracts may not generate the
anticipated revenue or profitability; the possibility that negative
changes in economic or other conditions might lead to a reduction
in demand for our products and services; the possibility of an
economic slowdown or that economic conditions in general will not
be as expected; the possibility that the historical seasonality of
our business may change; the possibility that significant customers
may experience extreme, severe economic difficulty; the possibility
that the integration of acquired businesses may not be as
successful as planned; 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
sales cycles may lengthen; the possibility that we may not be able
to attract and retain qualified technical and leadership
associates, or that we may lose key associates to other
organizations; the possibility that we won�t be able to properly
motivate our sales force or other associates; the possibility that
we won�t be able to achieve cost reductions and avoid unanticipated
costs; the possibility that we won�t be able to continue to receive
credit upon satisfactory terms and conditions; the possibility that
competent, competitive products, technologies or services will be
introduced into the marketplace by other companies; the possibility
that we may be subjected to pricing pressure due to market
conditions and/or competitive 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 changes in accounting pronouncements
may occur and may impact these projections; the possibility that we
won�t be able to protect proprietary information and technology or
to obtain necessary licenses on commercially reasonable terms; the
possibility that we may encounter difficulties when entering new
markets or industries; the possibility that there will be changes
in the legislative, accounting, regulatory and consumer
environments affecting our business, including but not limited to
litigation, legislation, regulations and customs relating to our
ability to collect, manage, aggregate and use data; the possibility
that data suppliers might withdraw data from us, leading to our
inability to provide certain products and services; the possibility
that we may enter into short-term contracts which would affect the
predictability of our revenues; the possibility that the amount of
ad hoc, volume-based and project work will not be as expected; the
possibility that we may experience a loss of data center capacity
or interruption of telecommunication links or power sources; the
possibility that we may experience failures or breaches of our
network and data security systems, leading to potential adverse
publicity, negative customer reaction, or liability to third
parties; the possibility that postal rates may increase, thereby
leading to reduced volumes of business; the possibility that our
clients may cancel or modify their agreements 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 experience processing errors which
result in credits to customers, re-performance of services or
payment of damages to customers; the possibility that the services
of the United States Postal Service, their global counterparts and
other delivery systems may be disrupted; and the possibility that
we may be affected by other competitive factors. With respect to
the board-approved business plan, all of the above factors apply,
along with the following which were assumptions made in creating
the board-approved business plan: that the U.S. and global
economies will continue to improve at a moderate pace; that global
growth will continue to be strong and that globalization trends
will continue to grow at an increasing pace; that Acxiom�s
computer, communications and other equipment expenses will continue
to fall as a percentage of revenue; that the Customer Information
Infrastructure (CII) grid-based environment will continue to be
implemented successfully over the next 3-4 years and that the new
CII infrastructure will continue to provide increasing operational
efficiencies; that the acquisitions of companies operating
primarily outside of the United States will be successfully
integrated and that significant efficiencies will be realized from
this integration; relating to operating cash flow and free cash
flow, that sufficient operating and capital lease arrangements will
continue to be available to the Company to provide for the
financing of most of its computer equipment and that software
suppliers will continue to provide financing arrangements for most
of the software purchases; relating to revolving credit line
balance, that free cash flow will meet expectations and that the
Company will use free cash flow to pay down bank debt, buy back
stock and fund dividends; relating to annual dividends, that the
board of directors will continue to approve quarterly dividends and
will vote to increase dividends over time; relating to diluted
shares, that the Company will meet its cash flow expectations and
that potential dilution created through the issuance of equity
instruments will be mitigated by continued stock repurchases in
accordance with the Company�s stock repurchase program. 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. Other factors are
detailed from time to time in our periodic reports and registration
statements filed with the United States Securities and Exchange
Commission. We believe that we have the product and technology
offerings, facilities, associates and competitive and financial
resources for continued business success, but future revenues,
costs, margins and profits are all influenced by a number of
factors, including those discussed above, all of which are
inherently difficult to forecast. We undertake no obligation to
update the information contained in this press release or any other
forward-looking statement. Acxiom, InfoBase and Personicx are
registered trademarks of Acxiom Corporation. � ACXIOM CORPORATION
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except earnings per share) � For the Three
Months Ended March 31, 2007� 2006� $ Variance � % Variance �
Revenue: Services 267,314� 257,591� 9,723� 3.8% Data 89,957�
86,752� 3,205� 3.7% Total revenue 357,271� 344,343� 12,928� 3.8% �
Operating costs and expenses: Cost of revenue Services 209,830�
196,428� 13,402� 6.8% Data 52,991� 52,142� 849� 1.6% Total cost of
revenue 262,821� 248,570� 14,251� 5.7% � Services gross margin
21.5% 23.7% Data gross margin 41.1% 39.9% Total gross margin 26.4%
27.8% � Selling, general and administrative 56,031� 51,642� 4,389�
8.5% Gains, losses and other items, net 9,122� (456) 9,578� 0.0% �
Total operating costs and expenses 327,974� 299,756� 28,218� 9.4% �
Income from operations 29,297� 44,587� (15,290) (34.3%) � Other
income (expense): Interest expense (15,002) (7,531) (7,471) 99.2%
Other, net 1,444� 135� 1,309� 969.6% � Total other income (expense)
(13,558) (7,396) (6,162) 83.3% � Earnings before income taxes
15,739� 37,191� (21,452) (57.7%) � Income taxes 9,468� 14,132�
(4,664) (33.0%) � Net earnings 6,271� 23,059� (16,788) (72.8%) �
Earnings per share: � Basic 0.08� 0.27� (0.19) (70.4%) � Diluted
0.08� 0.26� (0.18) (69.2%) � ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except earnings per share) � For the Twelve Months Ended
March 31, 2007� 2006� $ Variance � % Variance � Revenue: Services
1,061,103� 1,012,549� 48,554� 4.8% Data 334,033� 320,019� 14,014�
4.4% Total revenue 1,395,136� 1,332,568� 62,568� 4.7% � Operating
costs and expenses: Cost of revenue Services 806,991� 772,162�
34,829� 4.5% Data 206,629� 201,950� 4,679� 2.3% Total cost of
revenue 1,013,620� 974,112� 39,508� 4.1% � Services gross margin
23.9% 23.7% Data gross margin 38.1% 36.9% Total gross margin 27.3%
26.9% � Selling, general and administrative 213,849� 217,869�
(4,020) (1.8%) Gains, losses and other items, net 8,897� 9,504�
(607) 0.0% � Total operating costs and expenses 1,236,366�
1,201,485� 34,881� 2.9% � Income from operations 158,770� 131,083�
27,687� 21.1% � Other income (expense): Interest expense (46,632)
(28,744) (17,888) 62.2% Other, net 5,933� 2,005� 3,928� 195.9% �
Total other income (expense) (40,699) (26,739) (13,960) 52.2% �
Earnings before income taxes 118,071� 104,344� 13,727� 13.2% �
Income taxes 47,331� 40,216� 7,115� 17.7% � Net earnings 70,740�
64,128� 6,612� 10.3% � Earnings per share: � Basic 0.86� 0.73�
0.13� 17.8% � Diluted 0.84� 0.71� 0.13� 18.3% � ACXIOM CORPORATION
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except earnings per share) � For the Three
Months Ended March 31, 2007 December 31, 2006 $ Variance � %
Variance � Revenue: Services 267,314� 265,798� 1,516� 0.6% Data
89,957� 87,043� 2,914� 3.3% Total revenue 357,271� 352,841� 4,430�
1.3% � Operating costs and expenses: Cost of revenue Services
209,830� 199,704� 10,126� 5.1% Data 52,991� 53,004� (13) (0.0%)
Total cost of revenue 262,821� 252,708� 10,113� 4.0% � Services
gross margin 21.5% 24.9% Data gross margin 41.1% 39.1% Total gross
margin 26.4% 28.4% � Selling, general and administrative 56,031�
49,065� 6,966� 14.2% Gains, losses and other items, net 9,122�
(225) 9,347� 0.0% � Total operating costs and expenses 327,974�
301,548� 26,426� 8.8% � Income from operations 29,297� 51,293�
(21,996) (42.9%) � Other income (expense): Interest expense
(15,002) (14,911) (91) 0.6% Other, net 1,444� 1,157� 287� 24.8% �
Total other income (expense) (13,558) (13,754) 196� (1.4%) �
Earnings before income taxes 15,739� 37,539� (21,800) (58.1%) �
Income taxes 9,468� 12,594� (3,126) (24.8%) � Net earnings 6,271�
24,945� (18,674) (74.9%) � Earnings per share: � Basic 0.08� 0.32�
(0.24) (75.0%) � Diluted 0.08� 0.31� (0.23) (74.2%) � ACXIOM
CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE
(Unaudited) (In thousands, except earnings per share) � For the
Three Months Ended March 31, 2007 March 31, 2006 December 31, 2006
� Basic earnings per share: � Numerator - net earnings 6,271�
23,059� 24,945� � Denominator - weighted-average shares outstanding
78,385� 86,981� 77,717� � Basic earnings per share 0.08� 0.27�
0.32� � Diluted earnings per share: � Numerator - net earnings �
Net earnings 6,271� 23,059� 24,945� � Denominator: �
Weighted-average shares outstanding 78,385� 86,981� 77,717� �
Dilutive effect of common stock options, warrants and restricted
stock 1,750� 2,855� 2,238� � 80,135� 89,836� 79,955� � Diluted
earnings per share 0.08� 0.26� 0.31� � ACXIOM CORPORATION AND
SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In
thousands, except earnings per share) � For the Twelve Months Ended
March 31, 2007� 2006� � Basic earnings per share: � Numerator - net
earnings 70,740� 64,128� � Denominator - weighted-average shares
outstanding 82,564� 87,557� � Basic earnings per share 0.86� 0.73�
� Diluted earnings per share: � Numerator - net earnings � Net
earnings 70,740� 64,128� � Denominator: � Weighted-average shares
outstanding 82,564� 87,557� � Dilutive effect of common stock
options, warrants and restricted stock 2,115� 2,732� � 84,679�
90,289� � Diluted earnings per share 0.84� 0.71� � ACXIOM
CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited)
(Dollars in thousands) � For the Three Months Ended Revenue: March
31, 2007 March 31, 2006 December 31, 2006 � US services & data
305,778� 295,795� 298,978� International services & data
51,493� 48,548� 53,863� � Total revenue 357,271� 344,343� 352,841�
� US supplemental information: Services & data excluding IT
mgmt 217,474� 206,853� 211,312� IT management services 88,304�
88,942� 87,666� 305,778� 295,795� 298,978� � International
supplemental information: Services & data excluding IT mgmt
51,493� 48,548� 53,863� � � Income from operations: � US services
& data 32,771� 40,712� 46,832� International services &
data 5,648� 3,419� 4,236� Corporate & other (9,122) 456� 225� �
Total income from operations 29,297� 44,587� 51,293� � Margin: � US
services & data 10.7% 13.8% 15.7% International services &
data 11.0% 7.0% 7.9% � Total margin 8.2% 12.9% 14.5% � ACXIOM
CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited)
(Dollars in thousands) � For the Twelve Months Ended March 31,
Revenue: 2007� 2006� � US services & data 1,196,379� 1,147,641�
International services & data 198,757� 184,927� � Total revenue
1,395,136� 1,332,568� � US supplemental information: Services &
data excluding IT mgmt 841,476� 796,506� IT management services
354,903� 351,135� 1,196,379� 1,147,641� � International
supplemental information: Services & data excluding IT mgmt
198,757� 184,927� � � Income from operations: � US services &
data 155,643� 135,840� International services & data 12,024�
4,746� Corporate & other (8,897) (9,503) � Total income from
operations 158,770� 131,083� � Margin: � US services & data
13.0% 11.8% International services & data 6.0% 2.6% � Total
margin 11.4% 9.8% � ACXIOM CORPORATION AND SUBSIDIARIES DATA
REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars
in thousands) � For the Three Months Ended March 31, 2007 March 31,
2006 $ Variance � % Variance December 31, 2006 $ Variance � %
Variance � Data 69,596� 65,876� 3,720� 5.6% 68,520� 1,076� 1.6%
Passthrough data 20,361� 20,576� (215) (1.0%) 18,523� 1,838� 9.9% �
Total data revenue 89,957� 86,452� 3,505� 4.1% 87,043� 2,914� 3.3%
� � Cost of data revenue: Data 32,630� 31,566� 1,064� 3.4% 34,481�
(1,851) (5.4%) Passthrough data 20,361� 20,576� (215) (1.0%)
18,523� 1,838� 9.9% � Total cost of data 52,991� 52,142� 849� 1.6%
53,004� (13) (0.0%) � Margin: � Data 53.1% 52.1% 49.7% Passthrough
data 0.0% 0.0% 0.0% Total data 41.1% 39.7% 39.1% � ACXIOM
CORPORATION AND SUBSIDIARIES DATA REVENUE AND COST OF DATA
SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) � For the
Twelve Months Ended March 31, 2007� 2006� $ Variance � % Variance �
Data 255,299� 243,630� 11,669� 4.8% Passthrough data 78,734�
76,389� 2,345� 3.1% � Total data revenue 334,033� 320,019� 14,014�
4.4% � � Cost of data revenue: Data 127,895� 125,561� 2,334� 1.9%
Passthrough data 78,734� 76,389� 2,345� 3.1% � Total cost of data
206,629� 201,950� 4,679� 2.3% � Margin: � Data 49.9% 48.5%
Passthrough data 0.0% 0.0% Total data 38.1% 36.9% � ACXIOM
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Dollars in thousands) � March 31, 2007 March 31, 2006
$ Variance � % Variance Assets Current assets: Cash and cash
equivalents 37,776� 7,705� 30,071� 390.3% Trade accounts
receivable, net 285,850� 261,624� 24,226� 9.3% Refundable income
taxes 7,657� -� 7,657� 100.0% Deferred income taxes 22,341� 24,587�
(2,246) (9.1%) Other current assets 59,252� 44,937� 14,315� 31.9% �
Total current assets 412,876� 338,853� 74,023� 21.8% � Property and
equipment 733,175� 662,948� 70,227� 10.6% Less - accumulated
depreciation and amortization 420,883� 329,177� 91,706� 27.9% �
Property and equipment, net 312,292� 333,771� (21,479) (6.4%) �
Software, net of accumulated amortization 44,289� 45,509� (1,220)
(2.7%) Goodwill 522,046� 472,401� 49,645� 10.5% Purchased software
licenses, net of accumulated amortization 151,326� 155,518� (4,192)
(2.7%) Unbilled and notes receivable, excluding current portions
16,742� 19,139� (2,397) (12.5%) Deferred costs, net 137,684�
112,817� 24,867� 22.0% Data acquisition costs 35,398� 40,828�
(5,430) (13.3%) Other assets, net 23,251� 21,662� 1,589� 7.3% �
1,655,904� 1,540,498� 115,406� 7.5% � Liabilities and Stockholders'
Equity Current liabilities: Current installments of long-term
obligations 106,921� 93,518� 13,403� 14.3% Trade accounts payable
54,808� 44,144� 10,664� 24.2% Accrued payroll and related expenses
33,663� 32,139� 1,524� 4.7% Other accrued expenses 79,078� 81,428�
(2,350) (2.9%) Deferred revenue 113,318� 123,916� (10,598) (8.6%)
Income taxes -� 4,845� (4,845) (100.0%) � Total current liabilities
387,788� 379,990� 7,798� 2.1% � Long-term obligations: Long-term
debt and capital leases, net of current installments 631,184�
353,692� 277,492� 78.5% Software and data licenses, net of current
installments 17,695� 22,723� (5,028) (22.1%) � Total long-term
obligations 648,879� 376,415� 272,464� 72.4% � � Deferred income
taxes 97,926� 77,916� 20,010� 25.7% � Commitments and contingencies
� Stockholders' equity: Common stock 11,145� 10,946� 199� 1.8%
Additional paid-in capital 718,336� 677,026� 41,310� 6.1% Unearned
stock-based compensation -� (1,941) 1,941� (100.0%) Retained
earnings 462,844� 410,278� 52,566� 12.8% Accumulated other
comprehensive income 17,526� 2,205� 15,321� 694.8% Treasury stock,
at cost (688,540) (392,337) (296,203) 75.5% � Total stockholders'
equity 521,311� 706,177� (184,866) (26.2%) � 1,655,904� 1,540,498�
115,406� 7.5% � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) � For the Three Months Ended March 31, 2007� � 2006� �
Cash flows from operating activities: Net earnings 6,271� 23,059�
Non-cash operating activities: Depreciation and amortization
59,187� 58,787� Loss (gain) on disposal or impairment of assets,
net (235) (346) Deferred income taxes 17,102� (2,403) Tax benefit
of stock options and warrants -� 19,097� Non-cash stock
compensation expense 1,124� 345� Changes in operating assets and
liabilities: Accounts receivable (14,372) (7,324) Other assets
(16,942) (4,450) Accounts payable and other liabilities 11,804�
(9,043) Deferred revenue 12,595� (3,564) Net cash provided by
operating activities 76,534� 74,158� Cash flows from investing
activities: Capitalized software (8,000) (5,217) Capital
expenditures (8,230) (493) Deferral of costs (17,092) (15,956)
Payments received from investments 50� 905� Net cash paid in
acquisitions (18,667) (117) Net cash used by investing activities
(51,939) (20,878) Cash flows from financing activities: Proceeds
from debt -� 14,746� Payments of debt (77,928) (91,079) Dividends
paid (4,703) (4,338) Sale of common stock 7,663� 27,007�
Acquisition of treasury stock -� (1,905) Tax benefit of stock
options exercised 61� -� Net cash used by financing activities
(74,907) (55,569) Effect of exchange rate changes on cash 74� 88� �
Net increase (decrease) in cash and cash equivalents (50,238)
(2,201) Cash and cash equivalents at beginning of period 88,014�
9,906� Cash and cash equivalents at end of period 37,776� 7,705� �
Supplemental cash flow information: Cash paid (received) during the
period for: Interest 15,270� 9,553� Income taxes 6,569� 4,561�
Payments on capital leases and installment payment arrangements
18,579� 18,342� Payments on software and data license liabilities
5,746� 5,459� Prepayment of debt 50,000� -� Other debt payments,
excluding line of credit 3,603� 3,796� Noncash investing and
financing activities: Acquisition of property and equipment under
capital lease and installment payment arrangements 14,474� 14,884�
Construction and other financing 213� 3,572� Software licenses and
maintenance acquired under software obligation 8,305� 6,570� Note
payable issued in acquisition 1,300� -� � ACXIOM CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Dollars in thousands) � For the Twelve Months Ended
March 31, 2007� � 2006� � Cash flows from operating activities: Net
earnings 70,740� 64,128� Non-cash operating activities:
Depreciation and amortization 229,566� 231,137� Gain on disposal or
impairment of assets, net (1,718) (1,797) Deferred income taxes
16,127� 9,998� Tax benefit of stock options and warrants -� 19,097�
Non-cash stock compensation expense 3,823� 1,313� Changes in
operating assets and liabilities: Accounts receivable (30,140)
(21,162) Other assets (19,101) (26,197) Accounts payable and other
liabilities 3,960� (6,253) Deferred revenue (13,305) 5,569� Net
cash provided by operating activities 259,952� 275,833� Cash flows
from investing activities: Disposition of operations -� 4,844� Sale
of assets -� 5,123� Capitalized software (27,443) (21,903) Capital
expenditures (14,225) (6,848) Cash collected from the sale and
license of software 10,000� 20,000� Deferral of costs (66,687)
(70,454) Payments received from investments 2,758� 3,760� Net cash
paid in acquisitions (33,067) (144,626) Net cash used by investing
activities (128,664) (210,104) Cash flows from financing
activities: Proceeds from debt 649,756� 437,868� Payments of debt
(471,670) (307,120) Dividends paid (18,174) (17,406) Sale of common
stock 33,464� 58,616� Acquisition of treasury stock (299,301)
(233,770) Tax benefit of stock options exercised 4,142� -� Net cash
used by financing activities (101,783) (61,812) Effect of exchange
rate changes on cash 566� (397) � Net increase in cash and cash
equivalents 30,071� 3,520� Cash and cash equivalents at beginning
of period 7,705� 4,185� Cash and cash equivalents at end of period
37,776� 7,705� � Supplemental cash flow information: Cash paid
(received) during the period for: Interest 46,645� 27,958� Income
taxes 37,596� 4,185� Payments on capital leases and installment
payment arrangements 76,135� 72,232� Payments on software and data
license liabilities 26,897� 29,069� Prepayment of debt 50,000� -�
Other debt payments, excluding line of credit 10,235� 9,302�
Noncash investing and financing activities: Issuance of options for
acquisition -� 7,541� Acquisition of property and equipment under
capital lease and installment payment arrangements 58,928� 85,261�
Construction and other financing 18,380� 10,772� Software licenses
and maintenance acquired under software obligation 23,571� 14,950�
Issuance of common stock for acquisition 3,610� -� Note payable
issued in acquisition 1,300� -� � ACXIOM CORPORATION AND
SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND
RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in
thousands) � � 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� �
FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � YTD FY2007 �
Net cash provided by operating activities 61,476� 44,785� 95,414�
74,158� 275,833� 56,350� 64,409� 62,659� 76,534� 259,952� Less: Tax
benefit of stock options and warrants -� � -� � -� � (19,097) �
(19,097) -� � -� � -� � -� � -� � Subtotal 61,476� 44,785� 95,414�
55,061� 256,736� 56,350� 64,409� 62,659� 76,534� 259,952� � Plus:
Proceeds received from the disposition of operations -� 1,529�
3,315� -� 4,844� -� -� -� -� -� Proceeds received from the
disposition of assets -� 3,613� 1,510� -� 5,123� -� -� -� -� -�
Payments received from investments 721� 41� 2,093� 905� 3,760� 783�
1,925� -� 50� 2,758� Less: Capitalized software (5,673) (5,809)
(5,204) (5,217) (21,903) (5,719) (6,926) (6,798) (8,000) (27,443)
Capital expenditures (2,929) (3,025) (401) (493) (6,848) (217)
(3,260) (2,518) (8,230) (14,225) Deferral of costs (16,192)
(18,703) (19,603) (15,956) (70,454) (16,887) (16,559) (16,149)
(17,092) (66,687) Payments on capital leases and installment
payment arrangements (19,929) (15,967) (17,994) (18,342) (72,232)
(18,905) (21,951) (16,700) (18,579) (76,135) Payments on software
and data license liabilities (10,938) (5,328) (7,344) (5,459)
(29,069) (7,847) (7,304) (6,000) (5,746) (26,897) Other required
debt payments (1,357) � (2,434) � (1,715) � (3,796) � (9,302)
(1,711) � (1,804) � (3,117) � (3,603) � (10,235) � Subtotal 5,179�
(1,298) 50,071� 6,703� 60,655� 5,847� 8,530� 11,377� 15,334�
41,088� � Plus: Tax benefit of stock options and warrants -� � -� �
-� � 19,097� � 19,097� 1,079� � 1,765� � 1,237� � 61� � 4,142� �
Subtotal 5,179� (1,298) 50,071� 25,800� 79,752� 6,926� 10,295�
12,614� 15,395� 45,230� � Plus: Cash collected from sale of
software -� � -� � 20,000� � -� � 20,000� 5,000� 5,000� -� -�
10,000� � Total 5,179� � (1,298) � 70,071� � 25,800� � 99,752�
11,926� � 15,295� � 12,614� � 15,395� � 55,230� � ACXIOM
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Dollars in thousands, except earnings per share) � � �
Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05� � 12/31/05� �
03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� �
FY2007 % � $ % � $ Revenue: Services 238,499� 253,193� 263,266�
257,591� 1,012,549� 261,892� 266,099� 265,798� 267,314� 1,061,103�
3.8% 9,723� 4.8% 48,554� Data 71,772� � 77,330� � 84,165� � 86,752�
� 320,019� 74,813� � 82,220� � 87,043� � 89,957� � 334,033� 3.7% �
3,205� 4.4% � 14,014� Total revenue 310,271� 330,523� 347,431�
344,343� 1,332,568� 336,705� 348,319� 352,841� 357,271� 1,395,136�
3.8% 12,928� 4.7% 62,568� � Operating costs and expenses: Cost of
revenue Services 194,349� 191,883� 189,502� 196,428� 772,162�
196,073� 201,384� 199,704� 209,830� 806,991� 6.8% 13,402� 4.5%
34,829� Data 48,885� � 52,124� � 48,799� � 52,142� � 201,950�
49,572� � 51,062� � 53,004� � 52,991� � 206,629� 1.6% � 849� 2.3% �
4,679� Total cost of revenue 243,234� 244,007� 238,301� 248,570�
974,112� 245,645� 252,446� 252,708� 262,821� 1,013,620� 5.7%
14,251� 4.1% 39,508� � � Selling, general and administrative
53,700� 54,902� 57,625� 51,642� 217,869� 54,745� 54,008� 49,065�
56,031� 213,849� 8.5% 4,389� -1.8% (4,020) Gains, losses and other
items, net (1,637) � 12,799� � (1,202) � (456) � 9,504� 0� � 0� �
(225) � 9,122� � 8,897� -2100.4% � 9,578� -6.4% � (607) � Total
operating costs and expenses 295,297� 311,708� 294,724� 299,756�
1,201,485� 300,390� 306,454� 301,548� 327,974� 1,236,366� 9.4%
28,218� 2.9% 34,881� � Income from operations 14,974� 18,815�
52,707� 44,587� 131,083� 36,315� 41,865� 51,293� 29,297� 158,770�
-34.3% (15,290) 21.1% 27,687� % Margin 4.8% 5.7% 15.2% 12.9% 9.8%
10.8% 12.0% 14.5% 8.2% 11.4% Other income (expense) Interest
expense (5,162) (7,416) (8,635) (7,531) (28,744) (7,769) (8,950)
(14,911) (15,002) (46,632) 99.2% (7,471) 62.2% (17,888) Other, net
891� � 1,050� � (71) � 135� � 2,005� 647� � 2,685� � 1,157� �
1,444� � 5,933� 969.6% � 1,309� 195.9% � 3,928� Total other income
(expense) (4,271) (6,366) (8,706) (7,396) (26,739) (7,122) (6,265)
(13,754) (13,558) (40,699) 83.3% (6,162) 52.2% (13,960) � Earnings
before income taxes 10,703� 12,449� 44,001� 37,191� 104,344�
29,193� 35,600� 37,539� 15,739� 118,071� -57.7% (21,452) 13.2%
13,727� Income taxes 4,064� � 5,300� � 16,720� � 14,132� � 40,216�
11,385� � 13,884� � 12,594� � 9,468� � 47,331� -33.0% � (4,664)
17.7% � 7,115� � Net earnings 6,639� � 7,149� � 27,281� � 23,059� �
64,128� 17,808� � 21,716� � 24,945� � 6,271� � 70,740� -72.8% �
(16,788) 10.3% � 6,612� � � Diluted earnings (loss) per share 0.07�
� 0.08� � 0.31� � 0.26� � 0.71� 0.20� � 0.25� � 0.31� � 0.08� �
0.84� -69.2% � (0.18) 18.3% � 0.13� � ACXIOM CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - INTERNAL
FORMAT (Unaudited) (Dollars in thousands, except earnings per
share) � � � Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05�
� 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06�
� 03/31/07� � FY2007 % � $ % � $ � Revenue 310,271� 330,523�
347,431� 344,343� 1,332,568� 336,705� 348,319� 352,841� 357,271�
1,395,136� 3.8% 12,928� 4.7% 62,568� � Operating costs and
expenses: � Salaries and benefits 126,264� 127,325� 129,888�
132,579� 516,056� 135,917� 139,557� 139,724� 154,801� 569,999�
16.8% 22,222� 10.5% 53,943� � Computer, communications and other
equipment 77,647� 76,250� 73,614� 71,730� 299,241� 73,119� 72,685�
71,132� 73,409� 290,345� 2.3% 1,679� -3.0% (8,896) � Data costs
41,831� 44,752� 42,021� 44,593� 173,197� 43,372� 44,196� 43,761�
42,569� 173,898� -4.5% (2,024) 0.4% 701� � Other operating costs
and expenses 51,192� 50,582� 50,403� 51,310� 203,487� 47,982�
50,016� 47,156� 48,071� 193,225� -6.3% (3,239) -5.0% (10,262) �
Gains, losses and other items, net (1,637) � 12,799� � (1,202) �
(456) � 9,504� -� � -� � (225) � 9,122� � 8,897� -2100.4% � 9,578�
-6.4% � (607) � Total operating costs and expenses 295,297� �
311,708� � 294,724� � 299,756� � 1,201,485� 300,390� � 306,454� �
301,548� � 327,972� � 1,236,364� 9.4% � 28,216� 2.9% � 34,879� �
Income (loss) from operations 14,974� � 18,815� � 52,707� � 44,587�
� 131,083� 36,315� � 41,865� � 51,293� � 29,299� � 158,772� -34.3%
� (15,288) 21.1% � 27,689� Operating Margin 4.8% 5.7% 15.2% 12.9%
9.8% 10.8% 12.0% 14.5% 8.2% 11.4% Other income (expense): Interest
expense (5,162) (7,416) (8,635) (7,531) (28,744) (7,769) (8,950)
(14,911) (15,002) (46,632) 99.2% (7,471) 62.2% (17,888) Other, net
891� � 1,050� � (71) � 135� � 2,005� 647� � 2,685� � 1,157� �
1,444� � 5,933� 969.6% � 1,309� 195.9% � 3,928� � (4,271) � (6,366)
� (8,706) � (7,396) � (26,739) (7,122) � (6,265) � (13,754) �
(13,558) � (40,699) 83.3% � (6,162) 52.2% � (13,960) � Earnings
(loss) before income taxes 10,703� � 12,449� � 44,001� � 37,191� �
104,344� 29,193� � 35,600� � 37,539� � 15,741� � 118,073� -57.7% �
(21,450) 13.2% � 13,729� � Income taxes 4,064� � 5,300� � 16,720� �
14,132� � 40,216� 11,385� � 13,884� � 12,594� � 9,468� � 47,331�
-33.0% � (4,664) 17.7% � 7,115� � Net earnings (loss) 6,639� �
7,149� � 27,281� � 23,059� � 64,128� 17,808� � 21,716� � 24,945� �
6,273� � 70,742� -72.8% � (16,786) 10.3% � 6,614� � Diluted
earnings (loss) per share 0.07� � 0.08� � 0.31� � 0.26� � 0.71�
0.20� � 0.25� � 0.31� � 0.08� � 0.84� -69.2% � (0.18) 18.3% � 0.13�
� ACXIOM CORPORATION AND SUBSIDIARIES MARGIN ANALYSIS (Unaudited) �
� � Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05� �
12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� �
03/31/07� � FY2007 % � $ % � $ � Gross profit 67,037� 86,516�
109,130� 95,773� 358,456� 91,060� 95,873� 100,133� 94,450� 381,516�
-1.4% (1,323) 6.4% 23,060� Gross margin 21.6% 26.2% 31.4% 27.8%
26.9% 27.0% 27.5% 28.4% 26.4% 27.3% � Operating margin 4.8% 5.7%
15.2% 12.9% 9.8% 10.8% 12.0% 14.5% 8.2% 11.4% � Services gross
profit 44,150� 61,310� 73,764� 61,163� 240,387� 65,819� 64,715�
66,094� 57,484� 254,112� -6.0% (3,679) 5.7% 13,725� Services gross
margin 18.5% 24.2% 28.0% 23.7% 23.7% 25.1% 24.3% 24.9% 21.5% 23.9%
� Data gross profit 22,887� 25,206� 35,366� 34,610� 118,069�
25,241� 31,158� 34,039� 36,966� 127,404� 6.8% 2,356� 7.9% 9,335�
Data gross margin 31.9% 32.6% 42.0% 39.9% 36.9% 33.7% 37.9% 39.1%
41.1% 38.1% � ACXIOM CORPORATION AND SUBSIDIARIES EXPENSE TREND
ANALYSIS (Unaudited) � � � � � 06/30/05� � 09/30/05� � 12/31/05� �
03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� �
FY2007 � Salaries and benefits % of revenue 40.7% 38.5% 37.4% 38.5%
38.7% 40.4% 40.1% 39.6% 43.3% 40.9% � Computer, communications and
other equipment % of revenue 25.0% 23.1% 21.2% 20.8% 22.5% 21.7%
20.9% 20.2% 20.5% 20.8% � Data costs % of revenue 13.5% 13.5% 12.1%
13.0% 13.0% 12.9% 12.7% 12.4% 11.9% 12.5% � Other operating costs
and expenses % of revenue 16.5% 15.3% 14.5% 14.9% 15.3% 14.3% 14.4%
13.4% 13.5% 13.8% � Total operating costs and expenses % of revenue
95.2% 94.3% 84.8% 87.1% 90.2% 89.2% 88.0% 85.5% 91.8% 88.6% �
SG&A % of revenue 17.3% 16.6% 16.6% 15.0% 16.3% 16.3% 15.5%
13.9% 15.7% 15.3% � ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON GAAP MEASURES (Unaudited) (Dollars in
thousands, except earnings per share) � For the Three Months Ended
March 31, 2007 GAAP Earnings Unusual Charges (1) Unusual Tax Adj
(2) Earnings on Operations Excluding Unusual � Earnings before
income taxes 15,739� 9,672� 0� 25,411� � Income taxes 9,468� 3,579�
(3) (3,755) 9,292� � Net earnings 6,271� 6,093� 3,755� 16,119� �
Diluted earnings per share $0.078� $0.076� $0.047� $0.201� � Tax
rate 60% 37% 37% � (1) The unusual charges are $9.7 million in
pretax charges, consisting of $6.6 million related to closing down
Spain, $2.5 million in U.S. severance and $0.6 million in non cash
write off of deferred cost associated with the $50 million pay down
on the term loan. � (2) Unusual tax items net, primarily due to the
non-deductibility of the majority of the Spain losses and the
adjustment in the R&D tax credit reserve. � (3) Nominal tax
rate of 37%. � � For the Twelve Months Ended March 31, 2007 GAAP
Earnings Unusual Charges (1) Unusual Tax Adj (2) Earnings on
Operations Excluding Unusual � Earnings before income taxes
118,071� 9,672� 0� 127,743� � Income taxes 47,331� 3,579� (3)
(3,755) 47,155� � Net earnings 70,740� 6,093� 3,755� 80,588� �
Diluted earnings per share $0.835� $0.072� $0.044� $0.952� � Tax
rate 40% 37% 37% � (1) The unusual charges are $9.7 million in
pretax charges, consisting of $6.6 million related to closing down
Spain, $2.5 million in U.S. severance and $0.6 million in non cash
write off of deferred cost associated with the $50 million pay down
on the term loan. � (2) Unusual tax items net, primarily due to the
non-deductibility of the majority of the Spain losses and the
adjustment in the R&D tax credit reserve. � (3) Nominal tax
rate of 37%. � ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION
OF NON GAAP MEASURES USING 37% NOMINAL TAX RATE (Unaudited)
(Dollars in thousands, except earnings per share) � For the Three
Months Ended March 31, 2007 (A) GAAP Earnings (B) GAAP Pretax at
Nominal Tax Rate (C) Unusual Charges (1) (B) + (C) Earnings on
Operations Excluding Unusual � Earnings before income taxes 15,739�
15,739� 9,672� 25,411� � Income taxes 9,468� 5,823� 3,579� (3)
9,402� � Net earnings 6,271� 9,916� 6,093� 16,009� � Diluted
earnings per share $0.078� $0.124� $0.076� $0.200� (2) � Tax rate
60% 37% 37% 37% � (1) The unusual charges are $9.7 million in
pretax charges, consisting of $6.6 million related to closing down
Spain, $2.5 million in U.S. severance and $0.6 million in non cash
write off of deferred cost associated with the $50 million pay down
on the term loan. � (2) Calculated using $16,009 in net income and
80,135,000 shares. � (3) Nominal tax rate of 37%. � � For the
Twelve Months Ended March 31, 2007 (A) GAAP Earnings (B) GAAP
Pretax at Nominal Tax Rate (C) Unusual Charges (1) (B) + (C)
Earnings on Operations Excluding Unusual � Earnings before income
taxes 118,071� 118,071� 9,672� 127,743� � Income taxes 47,331�
43,686� 3,579� (3) 47,265� � Net earnings 70,740� 74,385� 6,093�
80,478� � Diluted earnings per share $0.835� $0.878� $0.072�
$0.950� (2) � Tax rate 40% 37% 37% 37% � (1) The unusual charges
are $9.7 million in pretax charges, consisting of $6.6 million
related to closing down Spain, $2.5 million in U.S. severance and
$0.6 million in non cash write off of deferred cost associated with
the $50 million pay down on the term loan. � (2) Calculated using
$80,478 in net income and 84,649,000 shares. � (3) Nominal tax rate
of 37%.
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