Acxiom� Corporation (Nasdaq: ACXM) today announced financial
results for the first quarter of fiscal year 2009 ended June 30,
2008. 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. Revenue for the first quarter of fiscal 2009 was
$331.1 million, compared to $334.7 million in the first quarter of
fiscal 2008. Income from operations for the quarter ended June 30,
2008 was $25.6 million, compared to $0.6 million for the period
ended June 30, 2007. Earnings per diluted share for the quarter
were $0.14, compared to a loss of $0.17 per diluted share in the
prior-year period. The current-year quarter included unusual gain
items of $1.6 million. The prior-year quarter included unusual loss
items of $20.6 million. If unusual items were excluded, earnings
per diluted share would be $0.12 and $0.06 in the current quarter
and prior-year quarter, respectively. John Meyer, Acxiom
Corporation�s Chief Executive Officer and President, commented, �I
am generally pleased with our first quarter results. Despite the
challenging economic environment, our operating profitability has
improved significantly over the prior year. We tasked every Acxiom
associate with improving our profitability, and we are beginning to
realize the benefits of those efficiency and cost reduction
efforts. Although we have made significant progress in expense
control, we will continue to seek opportunities to maximize our
operating cash flows.� Meyer concluded, �While managing costs is
essential to operating a successful enterprise, we have to be
focused on growing revenue in a meaningful way. We have laid the
foundation with a new organizational structure led by Global
Sales.� First Quarter 2009 Highlights: Revenue of $331.1 million
compared to $334.7 million in the first quarter a year ago. Income
from operations of $25.6 million compared to $0.6 million in the
first quarter last year. Income from operations for the current
year included unusual gain items of $0.5 million. The prior year
quarter included $20.6 million of unusual expense items. Other
income for the current quarter included a $1.1 million unusual
gain. Earnings per diluted share of $0.14 compared to a loss per
share of $0.17 in the first quarter of fiscal 2008. Excluding the
impact of unusual items, earnings per diluted share would be $0.12
in the current period and $0.06 in the prior-year period. Operating
cash flow of $28.5 million compared to $33.6 million in the first
quarter a year ago. Free cash flow available to equity of negative
$9.6 million compared to negative $9.8 million 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 press release. Operational Highlights:
Information Services: This segment includes the company�s global
lines of business for Customer Data Integration (CDI) and Marketing
Services, Digital Marketing Services, Information Technology
Services, and Consulting Services. Revenue for the quarter was
$235.8 million, compared to $241.4 million in the first quarter of
the previous year. Operating income for the quarter was $39.2
million, compared to $29.9 million in the first quarter of fiscal
2008. Prior year amounts included $5.2 million of unusual charges.
Information Products: This segment is comprised of the company�s
global Information Products lines of business and the U.S.
Background Screening Products line of business. Revenue for the
quarter was $95.3 million, up 2.0 percent from the first quarter of
the previous year. Operating income for the quarter was $3.2
million, compared to $2.7 million in the first quarter of the
previous year, an increase of 18.5 percent. Corporate and Other
Expenses: For the quarter ended June 30, 2008, corporate and other
expenses totaled $16.9 million, compared to $32.0 million for the
period ended June 30, 2007. The prior period included unusual items
of $15.4 million. Outlook The company provided its outlook for
fiscal 2009 at an investor conference on June 17. The company
affirms those amounts as follows: Revenue is expected to be
approximately equal to revenue in fiscal 2008. Earnings per diluted
share are expected to be in the range of $0.66 to $0.72. Free cash
flow to equity, which is a non-GAAP measure, is expected to be in
the range of $77 million to $85 million. Web Link to Financials
http://www.acxiom.com/FY09_Q1_Financials is a link to the detailed
financial information we typically attach to our earnings releases.
About Acxiom Corporation The global leader in interactive marketing
services, Acxiom connects clients with their customers through deep
consumer insight that enables 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.
Founded in 1969, Acxiom is headquartered in Little Rock, Ark., 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. 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 the projected revenue, earnings per
share and free cash flow to equity will be within the estimated
ranges for fiscal year 2009. 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 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
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
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, $ % 2008 2007 Variance �
Variance � Revenue: Services 235,770 241,355 (5,585 ) (2.3 %)
Products 95,303 � 93,314 � 1,989 2.1 % Total revenue 331,073
334,669 (3,596 ) (1.1 %) � Operating costs and expenses: Cost of
revenue Services 177,300 196,584 (19,284 ) (9.8 %) Products 76,720
� 76,290 � 430 0.6 % Total cost of revenue 254,020 272,874 (18,854
) (6.9 %) � Services gross margin 24.8 % 18.5 % Products gross
margin 19.5 % 18.2 % Total gross margin 23.3 % 18.5 % � Selling,
general and administrative 52,040 45,766 6,274 13.7 % Gains, losses
and other items, net (545 ) 15,390 � (15,935 ) (103.5 %) � Total
operating costs and expenses 305,515 � 334,030 � (28,515 ) (8.5 %)
� Income from operations 25,558 � 639 � 24,919 3899.7 % � Other
income (expense): Interest expense (9,459 ) (13,575 ) 4,116 (30.3
%) Other, net 1,359 � 183 � 1,176 642.6 % � Total other income
(expense) (8,100 ) (13,392 ) 5,292 (39.5 %) � Earnings (loss)
before income taxes 17,458 (12,753 ) 30,211 � Income taxes 6,808 �
937 � 5,871 626.6 % � Net earnings (loss) 10,650 � (13,690 ) 24,340
� Earnings (loss) per share: � Basic 0.14 � (0.17 ) 0.31 � Diluted
0.14 � (0.17 ) 0.31 � ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except earnings per share) � � � � � For the Three
Months Ended � June 30, March 31, $ % 2008 2008 Variance � Variance
� Revenue: Services 235,770 239,973 (4,203 ) (1.8 %) Products
95,303 � 109,824 � (14,521 ) (13.2 %) Total revenue 331,073 349,797
(18,724 ) (5.4 %) � Operating costs and expenses: Cost of revenue
Services 177,300 227,056 (49,756 ) (21.9 %) Products 76,720 �
76,876 � (156 ) (0.2 %) Total cost of revenue 254,020 303,932
(49,912 ) (16.4 %) � Services gross margin 24.8 % 5.4 % Products
gross margin 19.5 % 30.0 % Total gross margin 23.3 % 13.1 % �
Selling, general and administrative 52,040 47,304 4,736 10.0 %
Gains, losses and other items, net (545 ) 74,519 � (75,064 ) (100.7
%) � Total operating costs and expenses 305,515 � 425,755 �
(120,240 ) (28.2 %) � Income (loss) from operations 25,558 �
(75,958 ) 101,516 � Other income (expense): Interest expense (9,459
) (11,016 ) 1,557 (14.1 %) Other, net 1,359 � (1,685 ) 3,044 �
Total other income (expense) (8,100 ) (12,701 ) 4,601 (36.2 %) �
Earnings (loss) before income taxes 17,458 (88,659 ) 106,117 �
Income taxes 6,808 � (30,375 ) 37,183 � Net earnings (loss) 10,650
� (58,284 ) 68,934 � Earnings (loss) per share: � Basic 0.14 �
(0.76 ) 0.90 � Diluted 0.14 � (0.76 ) 0.90 � � � 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, March 31, 2008 2007 2008 � Basic earnings
per share: � Numerator - net earnings (loss) 10,650 (13,690 )
(58,284 ) � Denominator - weighted-average shares outstanding
77,402 79,341 � 77,085 � � Basic earnings (loss) per share 0.14
(0.17 ) (0.76 ) � Diluted earnings per share: � Numerator - net
earnings (loss) 10,650 (13,690 ) (58,284 ) � Denominator -
weighted-average shares outstanding 77,402 79,341 77,085 � Dilutive
effect of common stock options, warrants and restricted stock 354 -
� - � � 77,756 79,341 � 77,085 � � Diluted earnings (loss) per
share 0.14 (0.17 ) (0.76 ) � ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � � � � � For
the Three Months Ended � June 30, June 30, Revenue: 2008 2007 �
Information services 235,770 241,355 Information products 95,303 �
93,314 � � Total revenue 331,073 � 334,669 � � � Income from
operations: � Information services 39,205 29,907 Information
products 3,213 2,719 Corporate & other (16,860 ) (31,987 ) �
Total income from operations 25,558 � 639 � � Margin: � Information
services 16.6 % 12.4 % Information products 3.4 % 2.9 % � Total
margin 7.7 % 0.2 % � 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, $ % March 31, $ % 2008 2007 Variance � Variance
2008 Variance � Variance � Products 73,089 73,722 (633 ) (0.9 %)
87,730 (14,641 ) (16.7 %) Passthrough data 22,214 � 19,592 � 2,622
13.4 % 22,094 � 120 0.5 % � Total products revenue 95,303 � 93,314
� 1,989 2.1 % 109,824 � (14,521 ) (13.2 %) � � Cost of products
revenue: Products 54,506 56,698 (2,192 ) (3.9 %) 54,782 (276 ) (0.5
%) Passthrough data 22,214 � 19,592 � 2,622 13.4 % 22,094 � 120 0.5
% � Total cost of products 76,720 � 76,290 � 430 0.6 % 76,876 �
(156 ) (0.2 %) � Margin: � Products 25.4 % 23.1 % 37.6 %
Passthrough data 0.0 % 0.0 % 0.0 % Total products 19.5 % 18.2 %
30.0 % � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited) (Dollars in thousands) � � � � June 30,
March 31, $ % 2008 2008 Variance � Variance Assets Current assets:
Cash and cash equivalents 51,799 62,661 (10,862 ) (17.3 %) Trade
accounts receivable, net 231,688 216,462 15,226 7.0 % Refundable
income taxes 12,096 16,080 (3,984 ) (24.8 %) Deferred income taxes
44,203 44,211 (8 ) (0.0 %) Other current assets 45,379 � 45,645 �
(266 ) (0.6 %) � Total current assets 385,165 � 385,059 � 106 0.0 %
� Property and equipment 768,914 765,046 3,868 0.5 % Less -
accumulated depreciation and amortization 515,239 � 498,777 �
16,462 3.3 % � Property and equipment, net 253,675 � 266,269 �
(12,594 ) (4.7 %) � Software, net of accumulated amortization
57,093 59,263 (2,170 ) (3.7 %) Goodwill 486,230 484,796 1,434 0.3 %
Purchased software licenses, net of accumulated amortization 98,139
111,574 (13,435 ) (12.0 %) Deferred costs, net 85,576 90,707 (5,131
) (5.7 %) Data acquisition costs 48,593 51,566 (2,973 ) (5.8 %)
Other assets, net 20,935 � 22,621 � (1,686 ) (7.5 %) � 1,435,406 �
1,471,855 � (36,449 ) (2.5 %) � Liabilities and Stockholders'
Equity Current liabilities: Current installments of long-term debt
58,732 69,259 (10,527 ) (15.2 %) Trade accounts payable 32,933
45,749 (12,816 ) (28.0 %) Accrued payroll and related expenses
33,563 39,061 (5,498 ) (14.1 %) Other accrued expenses 108,308
121,441 (13,133 ) (10.8 %) Deferred revenue 64,182 � 64,116 � 66
0.1 % � Total current liabilities 297,718 � 339,626 � (41,908 )
(12.3 %) � Long-term debt 564,377 575,308 (10,931 ) (1.9 %) �
Deferred income taxes 54,060 51,429 2,631 5.1 % � Other liabilities
5,080 4,980 100 2.0 % � Stockholders' equity: Common stock 11,457
11,428 29 0.3 % Additional paid-in capital 785,723 779,815 5,908
0.8 % Retained earnings 419,759 413,758 6,001 1.5 % Accumulated
other comprehensive income 35,697 33,976 1,721 5.1 % Treasury
stock, at cost (738,465 ) (738,465 ) 0 0.0 % � Total stockholders'
equity 514,171 � 500,512 � 13,659 2.7 % � 1,435,406 � 1,471,855 �
(36,449 ) (2.5 %) � � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) � For the Three Months Ended June 30, 2008 � 2007 � Cash
flows from operating activities: Net earnings (loss) 10,650 (13,690
) Non-cash operating activities: Depreciation and amortization
53,893 59,102 Loss (gain) on disposal or impairment of assets, net
(2,111 ) 310 Deferred income taxes 2,715 (2,556 ) Non-cash stock
compensation expense 2,604 1,358 Changes in operating assets and
liabilities: Accounts receivable (16,258 ) 11,220 Other assets
9,376 (792 ) Deferred costs (616 ) (5,544 ) Accounts payable and
other liabilities (31,296 ) (3,097 ) Deferred revenue (484 )
(12,723 ) Net cash provided by operating activities 28,473 � 33,588
� Cash flows from investing activities: Capitalized software (5,011
) (8,447 ) Capital expenditures (5,706 ) (2,867 ) Cash collected
from sale and license of software 2,000 - Data acquisition costs
(8,622 ) (8,585 ) Payments received from investments 2,494 - Net
cash paid in acquisitions (35 ) (2,680 ) Net cash used by investing
activities (14,880 ) (22,579 ) Cash flows from financing
activities: Proceeds from debt - 2,127 Payments of debt (23,304 )
(31,284 ) Dividends paid (4,649 ) - Sale of common stock 3,273
35,821 Tax benefit of stock options exercised 60 � 5,624 � Net cash
provided (used) by financing activities (24,620 ) 12,288 � Effect
of exchange rate changes on cash 165 � 307 � � Net increase
(decrease) in cash and cash equivalents (10,862 ) 23,604 Cash and
cash equivalents at beginning of period 62,661 � 37,776 � Cash and
cash equivalents at end of period 51,799 � 61,380 � � Supplemental
cash flow information: Cash paid during the period for: Interest
9,354 13,888 Income taxes 42 115 Payments on capital leases and
installment payment arrangements 12,879 19,138 Payments on software
and data license liabilities 8,368 6,493 Other debt payments,
excluding line of credit 2,057 3,526 Revolving credit payments -
2,127 Noncash investing and financing activities: Acquisition of
property and equipment under capital lease and installment payment
arrangements 1,824 7,222 Construction and other financing - 5,351 �
ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW
AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited) (Dollars in thousands) � � � � � � � � � � � � � � � �
06/30/07 � 09/30/07 � 12/31/07 � 03/31/08 � YTD FY2008 06/30/08 �
Cash paid during the period for: 33,588 33,416 122,269 78,533
267,806 28,473 � Plus: Payments received from investments - 1,799
1,804 - 3,603 2,494 Disposition of operations - - 14,250 - 14,250 -
� Less: Capitalized software (8,447 ) (9,820 ) (8,507 ) (6,571 )
(33,345 ) (5,011 ) Capital expenditures (2,867 ) (5,291 ) (6,891 )
(6,551 ) (21,600 ) (5,706 ) Data acquisition costs (8,585 ) (4,403
) (9,634 ) (9,541 ) (32,163 ) (8,622 ) Payments on capital leases
and installment payment arrangements (19,138 ) (17,651 ) (17,542 )
(15,375 ) (69,706 ) (12,879 ) Payments on software and data license
liabilities (6,493 ) (7,279 ) (6,226 ) (11,821 ) (31,819 ) (8,368 )
Other required debt payments (3,526 ) � (2,416 ) � (5,612 ) �
(13,493 ) � (25,047 ) (2,057 ) � Subtotal (15,468 ) (11,645 )
83,911 15,181 71,979 (11,676 ) � Plus: Tax benefit of stock options
and warrants 5,624 � � 344 � � 25 � � (480 ) � 5,513 � 60 � �
Subtotal (9,844 ) (11,301 ) 83,936 14,701 77,492 (11,616 ) � Plus:
Cash collected from sale of software - � � - � � - � � - � � - �
2,000 � � Total (9,844 ) � (11,301 ) � 83,936 � � 14,701 � � 77,492
� (9,616 )
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