EX-99 2 ex991.htm EARNING PRESS RELEASE Exhibit 99.1 : Acxiom : Earnings Release

 

For more information, contact:

 

Katharine Boyce

Investor Relations Coordinator

Acxiom Corporation

(501) 342-1321

EACXM

 

Acxiom® Announces Second-Quarter Results

 

LITTLE ROCK, Ark. — October 24, 2007 — Acxiom® Corporation (NASDAQ: ACXM) today announced financial results for the second quarter of fiscal 2008 ended September 30, 2007. Acxiom will hold a conference call at 4:30 p.m. CDT today to discuss this information further. Interested parties are invited to the call, which will be broadcast via the Internet at www.acxiom.com.

 

Revenue for the three-month period was $351.0 million, an increase of 0.8 percent over $348.3 million for the comparable prior-year period. Income from operations for the three-month period equaled $20.4 million compared to $41.9 million for the quarter ended September 30, 2006. Earnings of $.13 per diluted share include the impact of $14.8 million, or 4 cents per diluted share, in unusual expense items net of income tax effect in the quarter as detailed below.

 

For the six-month period ended September 30, 2007, revenue totaled $689.2 million, an increase of 0.6 percent over $685.0 million for the comparable prior-year period. Income from operations for the six-month period was $24.5 million compared to $78.2 million for the six months ended September 30, 2006. The diluted loss per share of $.01 includes the impact of $35.4 million, or 27 cents per diluted share, in unusual expense items net of income tax effect for the six-month period.

 

Charles D. Morgan, Acxiom’s company leader and chairman of the board stated, “We are moving forward as an independent, publicly owned company. Despite the distraction of the recent course of events, the company posted a slight revenue increase for the quarter. In addition, we instituted an expense reduction plan during mid-September and we expect to see the benefit of the plan during the second half of the fiscal year.”

 

Details of Acxiom’s second-quarter performance include:

 

 

Revenue of $351.0 million, up 0.8 percent from $348.3 million in the second quarter a year ago.

 

Income from operations of $20.4 million, a 51.4 percent decrease compared to $41.9 million in the second quarter last year.

 

Unusual items that added $14.8 million in expenses in the quarter and $35.4 million for the six-month period. Included were costs related to the terminated transaction with Silver Lake and ValueAct Capital of $2.3 million and $17.4 million, for the current three-month and six-month period, respectively. The transaction costs were treated as non-deductible for income tax purposes in the first quarter. However, as the transaction was terminated on October 1, these costs were determined to be fully deductible in the second quarter. Unusual items also included $4.9 million in the second quarter and $10.0 million

 

1

 


in the six-month period related to the write-off of certain long-term assets related to amended contracts with certain information technology outsourcing clients. Also included were restructuring charges, primarily severance payments, of $5.3 million and $5.7 million for the quarter and the six-month period, respectively. Finally, a charge of $2.3 million was recorded during the second quarter related to a lease termination payment. These expenses, including income tax effects, reduced second-quarter and year-to-date diluted earnings per share by $.04 and $.27, respectively.

 

Diluted earnings per share of $.13, compared to diluted earnings per share of $.25 in the second quarter last year.

 

Net income of $10.5 million, compared to net earnings of $21.7 million in the second quarter of fiscal 2007.

 

Operating cash flow of $40.6 million and free cash flow available to equity of negative $11.3 million. The free cash flow available to equity is a non-GAAP financial measure, and reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release.

 

In fiscal 2008, Acxiom implemented a new organizational alignment with three operating divisions. Organization highlights are as follows:

 

 

Services Division: The division develops, sells and delivers industry-tailored solutions globally through the integration of products, services and consulting. Revenue for the quarter was $190.7 million, up 4.4 percent from $182.6 million in the second quarter of the previous fiscal year. For the six-month period ended September 30, 2007, revenue was $372.2 million, a 4.6 percent increase over $355.8 million for the six-month period ended September 30, 2006.

 

Information Products Division: The division develops and sells all global data products, including InfoBase® and Personicx®, as well as fraud and risk mitigation products sold in the U.S., including InsightIdentify. It focuses on product development, product lifecycle management, data content management and innovation. Revenue for the quarter was $108.2 million, a 3.6 percent increase over $104.4 million in the same quarter last year. Revenue for the six-month period ended September 30, 2007 increased 2.5 percent to $204.9 million from $199.9 million in the comparable prior-year period.

 

Infrastructure Management Division: The division develops and delivers information technology products and services that improve a company’s ability to manage its information technology delivery platform with lower costs and higher efficiencies. Such offerings include traditional IT outsourcing and transformational solutions such as the Acxiom data factory. Revenue for the second quarter was $112.9 million, compared to $119.3 million the same quarter last year, a decrease of 5.4 percent. For the six-month period ended September 30, 2007, revenue was $226.4 million, a 5.6 percent decrease in revenue from $239.8 million for the six-month period ended September 30, 2006. Revenue from five large contracts decreased by $12.9 million in the quarter and $25.5 million for the six months. Revenue for all other Infrastructure Management customers increased 8.8 percent for the quarter and 8.3 percent for the six months.

 

Other Second-Quarter Highlights

 

During the quarter, Acxiom expanded its interactive marketing offerings with the acquisition of New York-based EchoTarget, a leader in dynamic banner retargeting. The company provides customized targeting solutions for online advertisers and publishers, extending Acxiom’s personalization expertise across digital channels that already include email, search and website. EchoTarget works with marketers and publishers to identify

 

2

 


and target high-value marketing segments based on users’ online behaviors. Those users are then targeted through relevant banners on the company’s network of websites.

 

Acxiom was named to the InformationWeek 500 list and ranked No. 117 among the 500 companies listed. For nearly 20 years, InformationWeek has identified and honored the nation's most innovative users of information technology. The list is unique among corporate rankings because it spotlights the power of innovation in information technology, rather than simply identifying the biggest IT spenders.

Outlook

For the fiscal year ending March 31, 2008, revenue is expected to be flat to up 1 percent compared to fiscal 2007. Earnings per diluted share, before the effect of any unusual gains or losses, is expected to be in the range of $.69 to $.73. Reflecting the $35.4 million of unusual items recorded during the first two quarters of the fiscal year, and including the receipt of the $65 million merger termination fee in the third quarter, earnings per diluted share for the fiscal year are expected to be between $.91 and $.95.

In previous communications, the Company provided financial guidance under a Financial Road Map. At the present time, the Company no longer intends to update this guidance. As such, previous guidance issued under the Financial Road Map should no longer be relied upon.

About Acxiom Corporation

Acxiom Corporation (NASDAQ: ACXM; www.acxiom.com) 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, Ark., with locations throughout the United States and Europe, and in Australia, China, and Canada. For more information, visit www.acxiom.com.

This release contains 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 to remain focused on improving operating results, that we expect to see the full impact of expense reductions during the second half of the fiscal year and that we expect revenue and earnings to be within the ranges noted above. 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 of a change of control of the Company 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

 

3

 


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.

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.

 

 

4

 


 

ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

 

$

%

 

 

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

267,653

 

266,099

 

1,554

0.6%

Data

 

 

 

 

83,373

 

82,220

 

1,153

1.4%

Total revenue

 

 

 

351,026

 

348,319

 

2,707

0.8%

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

208,697

 

201,384

 

7,313

3.6%

Data

 

 

 

 

56,998

 

51,062

 

5,936

11.6%

Total cost of revenue

 

 

265,695

 

252,446

 

13,249

5.2%

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

22.0%

 

24.3%

 

 

 

Data gross margin

 

 

 

31.6%

 

37.9%

 

 

 

Total gross margin

 

 

 

24.3%

 

27.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

55,042

 

54,008

 

1,034

1.9%

Gains, losses and other items, net

 

9,932

 

-

 

9,932

100.0%

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

330,669

 

306,454

 

24,215

7.9%

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

20,357

 

41,865

 

(21,508)

(51.4%)

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(13,842)

 

(8,950)

 

(4,892)

54.7%

Other, net

 

 

 

1,331

 

2,685

 

(1,354)

(50.4%)

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(12,511)

 

(6,265)

 

(6,246)

99.7%

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

7,846

 

35,600

 

(27,754)

(78.0%)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

(2,696)

 

13,884

 

(16,580)

(119.4%)

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

10,542

 

21,716

 

(11,174)

(51.5%)

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

0.13

 

0.25

 

(0.12)

(48.0%)

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

0.13

 

0.25

 

(0.12)

(48.0%)

 

 

 

 

 

 

 

 

 

 

 

5

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

 

$

%

 

 

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

532,388

 

527,991

 

4,397

0.8%

Data

 

 

 

 

156,806

 

157,033

 

(227)

(0.1%)

Total revenue

 

 

 

689,194

 

685,024

 

4,170

0.6%

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

420,783

 

397,457

 

23,326

5.9%

Data

 

 

 

 

110,883

 

100,634

 

10,249

10.2%

Total cost of revenue

 

 

531,666

 

498,091

 

33,575

6.7%

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

21.0%

 

24.7%

 

 

 

Data gross margin

 

 

 

29.3%

 

35.9%

 

 

 

Total gross margin

 

 

 

22.9%

 

27.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

107,711

 

108,753

 

(1,042)

(1.0%)

Gains, losses and other items, net

 

25,322

 

-

 

25,322

100.0%

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

664,699

 

606,844

 

57,855

9.5%

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

24,495

 

78,180

 

(53,685)

(68.7%)

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(27,417)

 

(16,719)

 

(10,698)

64.0%

Other, net

 

 

 

1,514

 

3,332

 

(1,818)

(54.6%)

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(25,903)

 

(13,387)

 

(12,516)

93.5%

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

(1,408)

 

64,793

 

(66,201)

(102.2%)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

(429)

 

25,269

 

(25,698)

(101.7%)

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

 

(979)

 

39,524

 

(40,503)

(102.5%)

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

(0.01)

 

0.45

 

(0.46)

(102.2%)

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

(0.01)

 

0.44

 

(0.45)

(102.3%)

 

 

 

 

 

 

 

 

 

 

 

6

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

$

%

 

 

 

 

 

2007

 

2007

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

267,653

 

264,735

 

2,918

1.1%

Data

 

 

 

 

83,373

 

73,433

 

9,940

13.5%

Total revenue

 

 

 

351,026

 

338,168

 

12,858

3.8%

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

208,697

 

212,086

 

(3,389)

(1.6%)

Data

 

 

 

 

56,998

 

53,885

 

3,113

5.8%

Total cost of revenue

 

 

265,695

 

265,971

 

(276)

(0.1%)

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

22.0%

 

19.9%

 

 

 

Data gross margin

 

 

 

31.6%

 

26.6%

 

 

 

Total gross margin

 

 

 

24.3%

 

21.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

55,042

 

52,669

 

2,373

4.5%

Gains, losses and other items, net

 

9,932

 

15,390

 

(5,458)

(35.5%)

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

330,669

 

334,030

 

(3,361)

(1.0%)

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

20,357

 

4,138

 

16,219

392.0%

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(13,842)

 

(13,575)

 

(267)

2.0%

Other, net

 

 

 

1,331

 

183

 

1,148

627.3%

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(12,511)

 

(13,392)

 

881

(6.6%)

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

7,846

 

(9,254)

 

17,100

(184.8%)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

(2,696)

 

2,267

 

(4,963)

(218.9%)

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

 

10,542

 

(11,521)

 

22,063

(191.5%)

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

0.13

 

(0.15)

 

0.28

(186.7%)

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

0.13

 

(0.15)

 

0.28

(186.7%)

 

 

 

 

 

 

 

 

 

 

 

7

 


ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF EARNINGS PER SHARE

(Unaudited)

(In thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

 

June 30,

 

 

 

 

 

2007

 

2006

 

2007

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings (loss)

 

 

10,542

 

21,716

 

(11,521)

 

 

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

80,646

 

86,000

 

79,341

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

 

0.13

 

0.25

 

(0.15)

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings (loss)

 

 

10,542

 

21,716

 

(11,521)

 

 

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

80,646

 

86,000

 

79,341

 

 

 

 

 

 

 

 

 

 

Dilutive effect of common stock options, warrants

and restricted stock

1,839

 

2,203

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

82,485

 

88,203

 

79,341

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

0.13

 

0.25

 

(0.15)

 

 

 

 

 

 

 

 

 

 

8

 


ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF EARNINGS PER SHARE

(Unaudited)

(In thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings (loss)

 

 

(979)

 

39,524

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,993

 

87,078

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

 

(0.01)

 

0.45

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings (loss)

 

 

(979)

 

39,524

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,993

 

87,078

 

 

 

 

 

 

 

 

Dilutive effect of common stock options, warrants and restricted stock

-

 

2,235

 

 

 

 

 

 

 

 

 

 

 

 

 

79,993

 

89,313

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

(0.01)

 

0.44

 

 

 

 

 

 

 

 

9

 


ACXIOM CORPORATION AND SUBSIDIARIES

RESULTS BY SEGMENT

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

Revenue:

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Information services

 

 

 

190,650

 

182,611

Information products

 

 

 

108,230

 

104,433

Infrastructure management

 

 

112,883

 

119,283

Eliminations

 

 

 

(60,737)

 

(58,008)

 

 

 

 

 

 

 

 

Total revenue

 

 

 

351,026

 

348,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

27,757

 

33,633

Information products

 

 

 

6,822

 

5,303

Infrastructure management

 

 

12,573

 

11,763

Corporate & other

 

 

 

(26,795)

 

(8,834)

 

 

 

 

 

 

 

 

Total income from operations

 

 

20,357

 

41,865

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

14.6%

 

18.4%

Information products

 

 

 

6.3%

 

5.1%

Infrastructure management

 

 

11.1%

 

9.9%

 

 

 

 

 

 

 

 

Total margin

 

 

 

5.8%

 

12.0%

 

 

 

 

 

 

 

 

10

 


ACXIOM CORPORATION AND SUBSIDIARIES

RESULTS BY SEGMENT

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

Revenue:

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Information services

 

 

 

372,207

 

355,828

Information products

 

 

 

204,904

 

199,869

Infrastructure management

 

 

226,403

 

239,774

Eliminations

 

 

 

(114,320)

 

(110,447)

 

 

 

 

 

 

 

 

Total revenue

 

 

 

689,194

 

685,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

52,689

 

64,305

Information products

 

 

 

2,438

 

3,091

Infrastructure management

 

 

24,878

 

25,857

Corporate & other

 

 

 

(55,510)

 

(15,073)

 

 

 

 

 

 

 

 

Total income from operations

 

 

24,495

 

78,180

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

14.2%

 

18.1%

Information products

 

 

 

1.2%

 

1.5%

Infrastructure management

 

 

11.0%

 

10.8%

 

 

 

 

 

 

 

 

Total margin

 

 

 

3.6%

 

11.4%

 

 

 

 

 

 

 

 

11

 


ACXIOM CORPORATION AND SUBSIDIARIES

DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

 

$

%

 

June 30,

 

$

%

 

 

 

2007

 

2006

 

Variance

Variance

 

2007

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

63,534

 

62,654

 

880

1.4%

 

53,841

 

9,693

18.0%

Passthrough data

 

19,839

 

19,566

 

273

1.4%

 

19,592

 

247

1.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total data revenue

 

83,373

 

82,220

 

1,153

1.4%

 

73,433

 

9,940

13.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of data revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

37,159

 

31,496

 

5,663

18.0%

 

34,293

 

2,866

8.4%

Passthrough data

 

19,839

 

19,566

 

273

1.4%

 

19,592

 

247

1.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost of data

 

56,998

 

51,062

 

5,936

11.6%

 

53,885

 

3,113

5.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

41.5%

 

49.7%

 

 

 

 

36.3%

 

 

 

Passthrough data

 

0.0%

 

0.0%

 

 

 

 

0.0%

 

 

 

Total data

 

 

31.6%

 

37.9%

 

 

 

 

26.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 


ACXIOM CORPORATION AND SUBSIDIARIES

DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

September 30,

 

$

%

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

Data

 

 

117,375

 

117,183

 

192

0.2%

Passthrough data

 

39,431

 

39,850

 

(419)

(1.1%)

 

 

 

 

 

 

 

 

 

Total data revenue

 

156,806

 

157,033

 

(227)

(0.1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of data revenue:

 

 

 

 

 

 

 

Data

 

 

71,452

 

60,784

 

10,668

17.6%

Passthrough data

 

39,431

 

39,850

 

(419)

(1.1%)

 

 

 

 

 

 

 

 

 

Total cost of data

 

110,883

 

100,634

 

10,249

10.2%

 

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

39.1%

 

48.1%

 

 

 

Passthrough data

 

0.0%

 

0.0%

 

 

 

Total data

 

 

29.3%

 

35.9%

 

 

 

 

 

 

 

 

 

 

 

 

13

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

September 30,

 

March 31,

 

$

%

 

2007

 

2007

 

Variance

Variance

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

53,831

 

37,776

 

16,055

42.5%

Trade accounts receivable, net

294,822

 

285,850

 

8,972

3.1%

Refundable income taxes

11,421

 

7,657

 

3,764

49.2%

Deferred income taxes

22,244

 

22,341

 

(97)

(0.4%)

Other current assets

52,421

 

59,252

 

(6,831)

(11.5%)

 

 

 

 

 

 

 

Total current assets

434,739

 

412,876

 

21,863

5.3%

 

 

 

 

 

 

 

Property and equipment

763,381

 

733,175

 

30,206

4.1%

Less - accumulated depreciation and amortization

471,529

 

420,883

 

50,646

12.0%

 

 

 

 

 

 

 

Property and equipment, net

291,852

 

312,292

 

(20,440)

(6.5%)

 

 

 

 

 

 

 

Software, net of accumulated amortization

55,641

 

44,289

 

11,352

25.6%

Goodwill

529,039

 

522,046

 

6,993

1.3%

Purchased software licenses, net of accumulated amortization

136,683

 

151,326

 

(14,643)

(9.7%)

Unbilled and notes receivable, excluding current portions

13,285

 

16,742

 

(3,457)

(20.6%)

Deferred costs, net

132,016

 

137,684

 

(5,668)

(4.1%)

Data acquisition costs

34,941

 

35,398

 

(457)

(1.3%)

Other assets, net

22,735

 

23,251

 

(516)

(2.2%)

 

 

 

 

 

 

 

 

1,650,931

 

1,655,904

 

(4,973)

(0.3%)

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term obligations

95,193

 

106,921

 

(11,728)

(11.0%)

Trade accounts payable

54,070

 

54,808

 

(738)

(1.3%)

Accrued payroll and related expenses

31,235

 

33,663

 

(2,428)

(7.2%)

Other accrued expenses

80,352

 

79,078

 

1,274

1.6%

Deferred revenue

86,911

 

113,318

 

(26,407)

(23.3%)

 

 

 

 

 

 

 

Total current liabilities

347,761

 

387,788

 

(40,027)

(10.3%)

 

 

 

 

 

 

 

Long-term obligations:

 

 

 

 

 

 

Long-term debt and capital leases, net of current installments

618,981

 

631,184

 

(12,203)

(1.9%)

Software and data licenses, net of current installments

7,010

 

17,695

 

(10,685)

(60.4%)

 

 

 

 

 

 

 

Total long-term obligations

625,991

 

648,879

 

(22,888)

(3.5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

96,333

 

97,926

 

(1,593)

(1.6%)

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock

11,371

 

11,145

 

226

2.0%

Additional paid-in capital

769,096

 

718,336

 

50,760

7.1%

Retained earnings

461,865

 

462,844

 

(979)

(0.2%)

Accumulated other comprehensive income

27,011

 

17,526

 

9,485

54.1%

Treasury stock, at cost

(688,497)

 

(688,540)

 

43

(0.0%)

 

 

 

 

 

 

 

Total stockholders’ equity

580,846

 

521,311

 

59,535

11.4%

 

 

 

 

 

 

 

 

1,650,931

 

1,655,904

 

(4,973)

(0.3%)

 

 

 

 

 

 

 

14

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

2007

 

2006

 

 

 

 

Cash flows from operating activities:

 

 

 

Net earnings

10,542

 

21,716

Non-cash operating activities:

 

 

 

Depreciation and amortization

60,819

 

56,936

Loss (gain) on disposal or impairment of assets, net

(384)

 

(1,586)

Deferred income taxes

(360)

 

(189)

Non-cash stock compensation expense

1,672

 

591

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(17,838)

 

(5,039)

Other assets

2,178

 

(4,576)

Accounts payable and other liabilities

(195)

 

920

Deferred revenue

(15,790)

 

(4,364)

Net cash provided by operating activities

40,644

 

64,409

Cash flows from investing activities:

 

 

 

Capitalized software

(9,820)

 

(6,926)

Capital expenditures

(5,291)

 

(3,260)

Cash collected from the sale and license of software

-

 

5,000

Deferral of costs

(11,630)

 

(16,559)

Payments received from investments

1,799

 

1,925

Net cash paid in acquisitions

(2,791)

 

-

Net cash used by investing activities

(27,733)

 

(19,820)

Cash flows from financing activities:

 

 

 

Proceeds from debt

-

 

621,396

Payments of debt

(27,346)

 

(300,059)

Dividends paid

-

 

(8,808)

Sale of common stock

6,281

 

10,132

Acquisition of treasury stock

-

 

(281,335)

Tax benefit of stock options exercised

344

 

1,765

Net cash used by financing activities

(20,721)

 

43,091

Effect of exchange rate changes on cash

262

 

(11)

 

 

 

 

Net increase (decrease) in cash and cash equivalents

(7,548)

 

87,669

Cash and cash equivalents at beginning of period

61,379

 

4,163

Cash and cash equivalents at end of period

53,831

 

91,832

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash paid during the period for:

 

 

 

Interest

13,850

 

8,732

Income taxes

96

 

17,563

Payments on capital leases and installment payment arrangements

17,651

 

21,951

Payments on software and data license liabilities

7,279

 

7,304

Other debt payments, excluding line of credit

2,416

 

1,804

Noncash investing and financing activities:

 

 

 

Acquisition of property and equipment under capital lease

 

 

 

and installment payment arrangements

8,498

 

14,601

Construction and other financing

-

 

7,752

Software licenses and maintenance acquired under software obligation

493

 

-

Note payable issued in acquisition

300

 

-

 

 

 

 

15

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the Six Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

2007

 

2006

 

 

 

 

Cash flows from operating activities:

 

 

 

Net earnings (loss)

(979)

 

39,524

Non-cash operating activities:

 

 

 

Depreciation and amortization

119,921

 

115,983

Loss (gain) on disposal or impairment of assets, net

(74)

 

(1,670)

Deferred income taxes

(1,586)

 

(422)

Non-cash stock compensation expense

3,030

 

1,144

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(10,117)

 

(6,835)

Other assets

1,386

 

(1,390)

Accounts payable and other liabilities

(3,292)

 

(8,823)

Deferred revenue

(28,513)

 

(16,752)

Net cash provided by operating activities

79,776

 

120,759

Cash flows from investing activities:

 

 

 

Capitalized software

(18,267)

 

(12,645)

Capital expenditures

(8,158)

 

(3,477)

Cash collected from the sale and license of software

-

 

10,000

Deferral of costs

(25,759)

 

(33,446)

Payments received from investments

1,799

 

2,708

Net cash paid in acquisitions

(5,471)

 

-

Net cash used by investing activities

(55,856)

 

(36,860)

Cash flows from financing activities:

 

 

 

Proceeds from debt

2,127

 

650,269

Payments of debt

(58,629)

 

(367,925)

Dividends paid

-

 

(8,808)

Sale of common stock

42,101

 

16,905

Acquisition of treasury stock

-

 

(293,300)

Tax benefit of stock options exercised

5,968

 

2,844

Net cash used by financing activities

(8,433)

 

(15)

Effect of exchange rate changes on cash

568

 

243

 

 

 

 

Net increase in cash and cash equivalents

16,055

 

84,127

Cash and cash equivalents at beginning of period

37,776

 

7,705

Cash and cash equivalents at end of period

53,831

 

91,832

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash paid during the period for:

 

 

 

Interest

27,738

 

16,562

Income taxes

211

 

22,831

Payments on capital leases and installment payment arrangements

36,788

 

40,856

Payments on software and data license liabilities

13,772

 

15,151

Other debt payments, excluding line of credit

5,942

 

3,515

Revolving credit payments

2,127

 

-

Noncash investing and financing activities:

 

 

 

Acquisition of property and equipment under capital lease

 

 

 

and installment payment arrangements

15,720

 

34,027

Construction and other financing

5,351

 

13,656

Software licenses and maintenance acquired under software obligation

493

 

15,266

Note payable issued in acquisition

300

 

-

 

 

 

 

16

 


 

ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY

AND RECONCILIATION TO OPERATING CASH FLOW

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

06/30/06

09/30/06

12/31/06

03/31/07

YTD FY2007

 

06/30/07

09/30/07

YTD FY2008

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

56,350

64,409

62,659

76,534

259,952

 

39,132

40,644

79,776

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

Payments received from investments

783

1,925

-

50

2,758

 

-

1,799

1,799

Less:

 

 

 

 

 

 

 

 

 

 

Capitalized software

(5,719)

(6,926)

(6,798)

(8,000)

(27,443)

 

(8,447)

(9,820)

(18,267)

 

Capital expenditures

(217)

(3,260)

(2,518)

(8,230)

(14,225)

 

(2,867)

(5,291)

(8,158)

 

Deferral of costs

(16,887)

(16,559)

(16,149)

(17,092)

(66,687)

 

(14,129)

(11,630)

(25,759)

 

Payments on capital leases and installment payment arrangements

(18,905)

(21,951)

(16,700)

(18,579)

(76,135)

 

(19,137)

(17,651)

(36,788)

 

Payments on software and data license liabilities

(7,847)

(7,304)

(6,000)

(5,746)

(26,897)

 

(6,493)

(7,279)

(13,772)

 

Other required debt payments

(1,711)

(1,804)

(3,117)

(3,603)

(10,235)

 

(3,526)

(2,416)

(5,942)

 

 

 

 

 

 

 

 

 

 

 

Subtotal

5,847

8,530

11,377

15,334

41,088

 

(15,467)

(11,644)

(27,111)

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

Tax benefit of stock options and warrants

1,079

1,765

1,237

61

4,142

 

5,624

344

5,968

 

 

 

 

 

 

 

 

 

 

 

Subtotal

6,926

10,295

12,614

15,395

45,230

 

(9,843)

(11,300)

(21,143)

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

Cash collected from sale of software

5,000

5,000

-

-

10,000

 

-

-

-

 

 

 

 

 

 

 

 

 

 

 

Total

11,926

15,295

12,614

15,395

55,230

 

(9,843)

(11,300)

(21,143)

 

 

 

 

 

 

 

 

 

 

 

17