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