EX-99 2 ex99-1.htm PRESS RELEASE

EXHIBIT 99.1

 

For more information, contact:

 

Katharine Boyce

Investor Relations Coordinator

Acxiom Corporation

(501) 342-1321

EACXM

 

Acxiom Announces Third-Quarter Results

 

LITTLE ROCK, Ark. — January 23, 2008 — Acxiom® Corporation (Nasdaq: ACXM) today announced financial results for the third quarter of fiscal 2008 ended December 31, 2007. Acxiom will hold a conference call at 4:30 p.m. CST 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.

 

Revenue for the three-month period was $350.3 million, a decrease of 0.7 percent from the third quarter of fiscal 2007. Operating income for the quarter was $96.9 million including the unusual items detailed below. This represents an increase of 89 percent compared to the same quarter a year ago. Earnings of $.69 per diluted share include the impact of $.49 per share in unusual benefit, net of income tax effect, in the quarter as detailed below.

 

For the nine-month period ended December 31, 2007, revenue totaled $1.04 billion, up 0.2 percent from the same period in the prior year. Income from operations for the nine months was $121.4 million compared to $129.5 million a year ago. Diluted earnings per share were $.66 compared to $.75 in the prior year. The diluted earnings per share include the impact of $28.1 million, or $.21 per share, of benefit from unusual items, net of income tax effect, for the nine-month period.

 

Third-quarter earnings per diluted share of $.69 include a $63.5 million, or $.49 per diluted share, net benefit related to gains, losses and other items. The significant components of the gains, losses and other items are:

 

 

A $65 million payment received from Silver Lake and ValueAct Capital after the termination of the firms’ agreement to acquire Acxiom

 

A $2.6 million gain realized from the sale of the software distribution unit of Acxiom’s operations in France

 

A $3 million payment to retiring company leader Charles Morgan

 

$0.3 million in transaction costs related to the Silver Lake/ValueAct transaction

 

$0.8 million for ongoing restructuring activities in Europe

 

“Our revenue and earnings on continuing operations continue to be impacted by the difficulty in the financial services industry, which has resulted in reduced spending by many of our clients,” interim company leader Charles D. Morgan said. “With many of our largest clients affected by the downturn, it has had a significant impact on an important sector of our business. As we have discussed previously, due to the decrease in revenue during the first half of our fiscal year, we took measures to reduce expenses. Although these initiatives had a meaningful impact on expenses this quarter, these measures did not fully offset the reduction in revenue in the third quarter. We expect to experience continued reduced spending from some of our clients, especially in the financial services industry.”

1

 

 


Details of Acxiom’s third-quarter performance include:

 

 

Revenue of $350.3 million, down 0.7 percent from $352.8 million in the third quarter a year ago

 

Income from operations of $96.9 million, up 88.9 percent from $51.3 million in the third quarter last year; income from operations included $63.5 million generated by gains, losses and other items

 

Diluted earnings per share of $.69 compared to $.31 in the third quarter of fiscal 2007; included is $.49 in diluted earnings per share that represents the net of gains, losses and other items

 

Operating cash flow of $130.1 million and free cash flow available to equity of $83.9 million; 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

 

The repurchase of approximately 4.0 million shares of Acxiom stock for $49.1 million

 

Segment information  

 

 

Information 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 $184.5 million, down 1.7 percent from the third quarter of the previous year. For the nine months ended December 31, 2007, revenue was $556.7 million, up 2.4 percent from the previous year. Operating income for the quarter was $25.6 million, down 32.5 percent from the third quarter of the previous year. For the nine months just ended, operating income was $78.3 million, down 23.4 percent from the previous nine-month period.

 

 

Information Products Division: The division develops and sells all global data products, including InfoBase-X® 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 $111.2 million, up 4.9 percent from the third quarter of the previous year. For the nine months ended December 31, 2007, revenue was $316.1 million, up 3.4 percent from the previous year. Operating income for the quarter was $8.2 million, up 20.2 percent from the third quarter of the previous year. For the nine months just ended, operating income was $10.7 million, up 7.3 percent from the previous nine-month 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 quarter was $112.9 million, down 4.3 percent from the third quarter of the previous year. For the nine months ended December 31, 2007, revenue was $339.3 million, down 5.1 percent from the previous year. Operating income for the quarter was $11.1 million, down 18.5 percent from the third quarter of the previous year. For the nine months just ended, operating income was $36.0 million, down 8.9 percent from the previous nine-month period.

 

Recent developments

 

New Chief Executive Officer announced

 

On January 17, 2008, Acxiom announced the naming of John Meyer as its new CEO and President. Meyer has most recently been president of the Global Services group of Alcatel-Lucent. Prior to Alcatel-Lucent, Meyer served in a variety of executive capacities with EDS. Meyer will join Acxiom on February 4, 2008, and will also serve as a member of the board of directors.

 

2

 

 


Meyer said that “Acxiom’s position as the leading provider of offline and online marketing services is the envy of the market. Acxiom’s proud history of innovation and delivery excellence has created value for its clients for decades. It is an honor to join the Company and do all I can to build on its successes. I look forward to working with our associates to create value for our clients and shareholders.”

 

EMC Update

 

In December 2005, the Company and EMC entered into an agreement whereby EMC purchased Acxiom’s existing grid operating system for a total payment of $30 million, which the Company previously received.  As part of the agreement, EMC has the option, in exchange for a $20 million payment by the end of January, to acquire the Acxiom unit responsible for the further development of the technology initially sold to EMC as well as new technology and functionality created by the unit that could be utilized by the Company and EMC. 

 

EMC has informed the company that it does not intend to exercise the option, per its original terms, and the parties are now engaged in negotiations concerning an ongoing commercial relationship.

 

ValueAct SmallCap Fund

 

Upon the request of ValueAct Capital Group and pursuant to the August 5, 2006 agreement between the company and ValueAct Capital Group, on January 17, 2008 permission was granted to ValueAct SmallCap Master Fund, L.P. to purchase up to $30 million of the common stock of the company in open market or privately negotiated transactions. It is the understanding of the company that ValueAct Capital Group is associated with but does not control ValueAct Small-Cap Master Fund, L.P.

 

Outlook

 

The Company is updating its outlook for the remainder of its 2008 fiscal year. Previous guidance is superseded by the updated guidance and should not be relied upon. Revenue for the 12 months ending March 31, 2008 is expected to be flat to down 1 percent compared to fiscal 2007. Earnings per diluted share, before the effect of any unusual items recorded during the fiscal year, are expected to be in the range of $.60 to $.65. Reflecting the $28.1 million of unusual items recorded during the first three quarters of the fiscal year, earnings per diluted share for the fiscal year are expected to be from $.81 to $.86.

 

These projections are forward looking, and actual results may differ materially. These projections may be impacted by mergers, acquisitions, divestitures or other business combinations that may be completed in the future as well as the other factors set forth below.

 

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.

 

3

 

 


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 and earnings per share will be within the estimated ranges. 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.

 

4

 

 


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.

 

5

 

 

 


 

ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

$

%

 

 

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

262,697

 

265,798

 

(3,101)

(1.2%)

Data

 

 

 

 

87,572

 

87,043

 

529

0.6%

Total revenue

 

 

 

350,269

 

352,841

 

(2,572)

(0.7%)

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

201,648

 

199,704

 

1,944

1.0%

Data

 

 

 

 

60,551

 

53,004

 

7,547

14.2%

Total cost of revenue

 

 

262,199

 

252,708

 

9,491

3.8%

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

23.2%

 

24.9%

 

 

 

Data gross margin

 

 

 

30.9%

 

39.1%

 

 

 

Total gross margin

 

 

 

25.1%

 

28.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

54,669

 

49,065

 

5,604

11.4%

Gains, losses and other items, net

 

(63,489)

 

(225)

 

(63,264)

100.0%

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

253,379

 

301,548

 

(48,169)

(16.0%)

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

96,890

 

51,293

 

45,597

88.9%

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(12,797)

 

(14,911)

 

2,114

(14.2%)

Other, net

 

 

 

1,394

 

1,157

 

237

20.5%

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(11,403)

 

(13,754)

 

2,351

(17.1%)

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

85,487

 

37,539

 

47,948

127.7%

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

30,791

 

12,594

 

18,197

144.5%

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

54,696

 

24,945

 

29,751

119.3%

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

0.69

 

0.32

 

0.37

115.6%

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

0.69

 

0.31

 

0.38

122.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

$

%

 

 

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

795,085

 

793,789

 

1,296

0.2%

Data

 

 

 

 

244,378

 

244,076

 

302

0.1%

Total revenue

 

 

 

1,039,463

 

1,037,865

 

1,598

0.2%

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

622,431

 

597,161

 

25,270

4.2%

Data

 

 

 

 

171,434

 

153,638

 

17,796

11.6%

Total cost of revenue

 

 

793,865

 

750,799

 

43,066

5.7%

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

21.7%

 

24.8%

 

 

 

Data gross margin

 

 

 

29.8%

 

37.1%

 

 

 

Total gross margin

 

 

 

23.6%

 

27.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

162,380

 

157,818

 

4,562

2.9%

Gains, losses and other items, net

 

(38,167)

 

(225)

 

(37,942)

100.0%

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

918,078

 

908,392

 

9,686

1.1%

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

121,385

 

129,473

 

(8,088)

(6.2%)

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(40,214)

 

(31,630)

 

(8,584)

27.1%

Other, net

 

 

 

2,908

 

4,489

 

(1,581)

(35.2%)

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(37,306)

 

(27,141)

 

(10,165)

37.5%

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

84,079

 

102,332

 

(18,253)

(17.8%)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

30,362

 

37,863

 

(7,501)

(19.8%)

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

53,717

 

64,469

 

(10,752)

(16.7%)

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

0.67

 

0.77

 

(0.10)

(13.0%)

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

0.66

 

0.75

 

(0.09)

(12.0%)

 

 

 

 

 

 

 

 

 

 

 

7

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

$

%

 

 

 

 

 

2007

 

2007

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

262,697

 

267,653

 

(4,956)

(1.9%)

Data

 

 

 

 

87,572

 

83,373

 

4,199

5.0%

Total revenue

 

 

 

350,269

 

351,026

 

(757)

(0.2%)

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Services

 

 

 

201,648

 

208,697

 

(7,049)

(3.4%)

Data

 

 

 

 

60,551

 

56,998

 

3,553

6.2%

Total cost of revenue

 

 

262,199

 

265,695

 

(3,496)

(1.3%)

 

 

 

 

 

 

 

 

 

 

 

Services gross margin

 

 

23.2%

 

22.0%

 

 

 

Data gross margin

 

 

 

30.9%

 

31.6%

 

 

 

Total gross margin

 

 

 

25.1%

 

24.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

54,669

 

55,042

 

(373)

(0.7%)

Gains, losses and other items, net

 

(63,489)

 

9,932

 

(73,421)

(739.2%)

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

253,379

 

330,669

 

(77,290)

(23.4%)

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

96,890

 

20,357

 

76,533

376.0%

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(12,797)

 

(13,842)

 

1,045

(7.5%)

Other, net

 

 

 

1,394

 

1,331

 

63

4.7%

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(11,403)

 

(12,511)

 

1,108

(8.9%)

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

85,487

 

7,846

 

77,641

989.6%

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

30,791

 

(2,696)

 

33,487

(1242.1%)

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

54,696

 

10,542

 

44,154

418.8%

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

0.69

 

0.13

 

0.56

430.8%

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

0.69

 

0.13

 

0.56

430.8%

 

 

 

 

 

 

 

 

 

 

 

8

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF EARNINGS PER SHARE

(Unaudited)

(In thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

September 30,

 

 

 

 

 

2007

 

2006

 

2007

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings

 

 

54,696

 

24,945

 

10,542

 

 

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,418

 

77,717

 

80,646

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

0.69

 

0.32

 

0.13

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings

 

 

54,696

 

24,945

 

10,542

 

 

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,418

 

77,717

 

80,646

 

 

 

 

 

 

 

 

 

 

Dilutive effect of common stock options, warrants and restricted stock

253

 

2,238

 

1,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

79,671

 

79,955

 

82,485

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

0.69

 

0.31

 

0.13

 

 

 

 

 

 

 

 

 

 

9

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF EARNINGS PER SHARE

(Unaudited)

(In thousands, except earnings per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings

 

 

53,717

 

64,469

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,802

 

83,957

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

0.67

 

0.77

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator - net earnings

 

 

53,717

 

64,469

 

 

 

 

 

 

 

 

Denominator - weighted-average shares outstanding

79,802

 

83,957

 

 

 

 

 

 

 

 

Dilutive effect of common stock options, warrants and restricted stock

1,380

 

2,237

 

 

 

 

 

 

 

 

 

 

 

 

 

81,182

 

86,194

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

0.66

 

0.75

 

 

 

 

 

 

 

 

10

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

RESULTS BY SEGMENT

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

Revenue:

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Information services

 

 

 

184,504

 

187,673

Information products

 

 

 

111,225

 

106,002

Infrastructure management

 

 

112,916

 

117,966

Eliminations

 

 

 

(58,376)

 

(58,800)

 

 

 

 

 

 

 

 

Total revenue

 

 

 

350,269

 

352,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

25,626

 

37,954

Information products

 

 

 

8,216

 

6,834

Infrastructure management

 

 

11,138

 

13,666

Corporate & other

 

 

 

51,910

 

(7,161)

 

 

 

 

 

 

 

 

Total income from operations

 

 

96,890

 

51,293

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

13.9%

 

20.2%

Information products

 

 

 

7.4%

 

6.4%

Infrastructure management

 

 

9.9%

 

11.6%

 

 

 

 

 

 

 

 

Total margin

 

 

 

27.7%

 

14.5%

 

 

 

 

 

 

 

 

11

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

RESULTS BY SEGMENT

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

Revenue:

 

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

Information services

 

 

 

556,713

 

543,501

Information products

 

 

 

316,127

 

305,871

Infrastructure management

 

 

339,319

 

357,740

Eliminations

 

 

 

(172,696)

 

(169,247)

 

 

 

 

 

 

 

 

Total revenue

 

 

 

1,039,463

 

1,037,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

78,315

 

102,259

Information products

 

 

 

10,654

 

9,925

Infrastructure management

 

 

36,016

 

39,523

Corporate & other

 

 

 

(3,600)

 

(22,234)

 

 

 

 

 

 

 

 

Total income from operations

 

 

121,385

 

129,473

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information services

 

 

 

14.1%

 

18.8%

Information products

 

 

 

3.4%

 

3.2%

Infrastructure management

 

 

10.6%

 

11.0%

 

 

 

 

 

 

 

 

Total margin

 

 

 

11.7%

 

12.5%

 

 

 

 

 

 

 

 

12

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

$

%

 

September 30,

 

$

%

 

 

 

2007

 

2006

 

Variance

Variance

 

2007

 

Variance

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

67,095

 

68,520

 

(1,425)

(2.1%)

 

63,534

 

3,561

5.6%

Passthrough data

 

20,477

 

18,523

 

1,954

10.5%

 

19,839

 

638

3.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total data revenue

 

87,572

 

87,043

 

529

0.6%

 

83,373

 

4,199

5.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of data revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

40,074

 

34,481

 

5,593

16.2%

 

37,159

 

2,915

7.8%

Passthrough data

 

20,477

 

18,523

 

1,954

10.5%

 

19,839

 

638

3.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost of data

 

60,551

 

53,004

 

7,547

14.2%

 

56,998

 

3,553

6.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

40.3%

 

49.7%

 

 

 

 

41.5%

 

 

 

Passthrough data

 

0.0%

 

0.0%

 

 

 

 

0.0%

 

 

 

Total data

 

 

30.9%

 

39.1%

 

 

 

 

31.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

$

%

 

 

 

2007

 

2006

 

Variance

Variance

 

 

 

 

 

 

 

 

 

Data

 

 

184,470

 

185,704

 

(1,234)

(0.7%)

Passthrough data

 

59,908

 

58,372

 

1,536

2.6%

 

 

 

 

 

 

 

 

 

Total data revenue

 

244,378

 

244,076

 

302

0.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of data revenue:

 

 

 

 

 

 

 

Data

 

 

111,526

 

95,266

 

16,260

17.1%

Passthrough data

 

59,908

 

58,372

 

1,536

2.6%

 

 

 

 

 

 

 

 

 

Total cost of data

 

171,434

 

153,638

 

17,796

11.6%

 

 

 

 

 

 

 

 

 

Margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

39.5%

 

48.7%

 

 

 

Passthrough data

 

0.0%

 

0.0%

 

 

 

Total data

 

 

29.8%

 

37.1%

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 


 

ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

December 31,

 

March 31,

 

$

%

 

2007

 

2007

 

Variance

Variance

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

66,265

 

37,776

 

28,489

75.4%

Trade accounts receivable, net

286,627

 

285,850

 

777

0.3%

Refundable income taxes

-

 

7,657

 

(7,657)

(100.0%)

Deferred income taxes

22,211

 

22,341

 

(130)

(0.6%)

Other current assets

46,017

 

59,252

 

(13,235)

(22.3%)

 

 

 

 

 

 

 

Total current assets

421,120

 

412,876

 

8,244

2.0%

 

 

 

 

 

 

 

Property and equipment

772,176

 

733,175

 

39,001

5.3%

Less - accumulated depreciation and amortization

493,394

 

420,883

 

72,511

17.2%

 

 

 

 

 

 

 

Property and equipment, net

278,782

 

312,292

 

(33,510)

(10.7%)

 

 

 

 

 

 

 

Software, net of accumulated amortization

60,836

 

44,289

 

16,547

37.4%

Goodwill

518,608

 

522,046

 

(3,438)

(0.7%)

Purchased software licenses, net of accumulated amortization

132,344

 

151,326

 

(18,982)

(12.5%)

Unbilled and notes receivable, excluding current portions

6,584

 

16,742

 

(10,158)

(60.7%)

Deferred costs, net

130,958

 

137,684

 

(6,726)

(4.9%)

Data acquisition costs

50,552

 

35,398

 

15,154

42.8%

Other assets, net

22,555

 

23,251

 

(696)

(3.0%)

 

 

 

 

 

 

 

 

1,622,339

 

1,655,904

 

(33,565)

(2.0%)

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current installments of long-term obligations

85,450

 

106,921

 

(21,471)

(20.1%)

Trade accounts payable

46,631

 

54,808

 

(8,177)

(14.9%)

Accrued payroll and related expenses

28,478

 

33,663

 

(5,185)

(15.4%)

Other accrued expenses

92,036

 

79,078

 

12,958

16.4%

Deferred revenue

70,904

 

113,318

 

(42,414)

(37.4%)

Income taxes

7,426

 

-

 

7,426

100.0%

 

 

 

 

 

 

 

Total current liabilities

330,925

 

387,788

 

(56,863)

(14.7%)

 

 

 

 

 

 

 

Long-term obligations:

 

 

 

 

 

 

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

594,627

 

631,184

 

(36,557)

(5.8%)

Software and data licenses, net of current installments

10,631

 

17,695

 

(7,064)

(39.9%)

 

 

 

 

 

 

 

Total long-term obligations

605,258

 

648,879

 

(43,621)

(6.7%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

98,340

 

97,926

 

414

0.4%

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock

11,396

 

11,145

 

251

2.3%

Additional paid-in capital

774,527

 

718,336

 

56,191

7.8%

Retained earnings

511,711

 

462,844

 

48,867

10.6%

 

 

 

 

Accumulated other comprehensive income

27,777

 

17,526

 

10,251

58.5%

Treasury stock, at cost

(737,595)

 

(688,540)

 

(49,055)

7.1%

 

 

 

 

 

 

 

Total stockholders' equity

587,816

 

521,311

 

66,505

12.8%

 

 

 

 

 

 

 

 

1,622,339

 

1,655,904

 

(33,565)

(2.0%)

 

 

 

 

 

 

 

15

 

 


ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the Three Months Ended

 

December 31,

 

2007

 

2006

 

 

 

 

Cash flows from operating activities:

 

 

 

Net earnings

54,696

 

24,945

Non-cash operating activities:

 

 

 

Depreciation and amortization

57,424

 

54,396

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

(2,643)

 

187

Deferred income taxes

2,091

 

(553)

Non-cash stock compensation expense

2,648

 

1,555

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

8,564

 

(8,933)

Other assets

17,777

 

(769)

Accounts payable and other liabilities

3,296

 

979

Deferred revenue

(13,759)

 

(9,148)

Net cash provided by operating activities

130,094

 

62,659

Cash flows from investing activities:

 

 

 

Disposition of operations

14,250

 

-

Capitalized software

(8,507)

 

(6,798)

Capital expenditures

(6,891)

 

(2,518)

Deferral of costs

(17,460)

 

(16,149)

Payments received from investments

1,804

 

-

Net cash paid in acquisitions

(3,720)

 

(14,400)

Net cash used by investing activities

(20,524)

 

(39,865)

Cash flows from financing activities:

 

 

 

Proceeds from debt

-

 

(513)

Payments of debt

(49,380)

 

(25,817)

Dividends paid

(4,850)

 

(4,663)

Sale of common stock

2,711

 

8,896

Acquisition of treasury stock

(45,565)

 

(6,001)

Tax benefit of stock options exercised

25

 

1,237

Net cash used by financing activities

(97,059)

 

(26,861)

Effect of exchange rate changes on cash

(77)

 

249

 

 

 

 

Net increase (decrease) in cash and cash equivalents

12,434

 

(3,818)

Cash and cash equivalents at beginning of period

53,831

 

91,832

Cash and cash equivalents at end of period

66,265

 

88,014

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash paid during the period for:

 

 

 

Interest

12,270

 

14,813

Income taxes

4,743

 

8,196

Payments on capital leases and installment payment arrangements

17,542

 

16,700

Payments on software and data license liabilities

6,226

 

6,000

Other debt payments, excluding line of credit

5,612

 

3,117

Prepayment of debt

20,000

 

-

Noncash investing and financing activities:

 

 

 

Acquisition of property and equipment under capital lease

 

 

 

and installment payment arrangements

5,004

 

10,427

Disposal of asset under financing

(5,304)

 

-

Construction and other financing

3,995

 

4,511

Assets acquired under data obligation

15,306

 

-

 

 

 

 

16

 

 


 

ACXIOM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

For the Nine Months Ended

 

 

 

 

 

December 31,

 

 

 

 

 

2007

 

2006

Cash flows from operating activities:

 

 

 

Net earnings

53,717

 

64,469

Non-cash operating activities:

 

 

 

Depreciation and amortization

177,345

 

170,379

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

(2,717)

 

(1,483)

Deferred income taxes

505

 

(975)

Non-cash stock compensation expense

5,678

 

2,699

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(1,553)

 

(15,768)

Other assets

19,163

 

(2,159)

Accounts payable and other liabilities

4

 

(7,844)

Deferred revenue

(42,272)

 

(25,900)

Net cash provided by operating activities

209,870

 

183,418

Cash flows from investing activities:

 

 

 

Disposition of operations

14,250

 

-

Capitalized software

(26,774)

 

(19,443)

Capital expenditures

(15,049)

 

(5,995)

Cash collected from the sale and license of software

-

 

10,000

Deferral of costs

(43,219)

 

(49,595)

Payments received from investments

3,603

 

2,708

Net cash paid in acquisitions

(9,191)

 

(14,400)

Net cash used by investing activities

(76,380)

 

(76,725)

Cash flows from financing activities:

 

 

 

Proceeds from debt

2,127

 

649,756

Payments of debt

(108,009)

 

(393,742)

Dividends paid

(4,850)

 

(13,471)

Sale of common stock

44,812

 

25,801

Acquisition of treasury stock

(45,565)

 

(299,301)

Tax benefit of stock options exercised

5,993

 

4,081

Net cash used by financing activities

(105,492)

 

(26,876)

Effect of exchange rate changes on cash

491

 

492

 

 

 

 

Net increase in cash and cash equivalents

28,489

 

80,309

Cash and cash equivalents at beginning of period

37,776

 

7,705

Cash and cash equivalents at end of period

66,265

 

88,014

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash paid during the period for:

 

 

 

Interest

40,008

 

31,375

Income taxes

4,954

 

31,027

 

 

 

 

Payments on capital leases and installment payment arrangements

54,330

 

57,556

Payments on software and data license liabilities

19,998

 

21,151

Other debt payments, excluding line of credit

11,554

 

6,632

Prepayment of debt

20,000

 

-

Revolving credit payments

2,127

 

308,403

Noncash investing and financing activities:

 

 

 

Acquisition of property and equipment under capital lease

 

 

 

and installment payment arrangements

20,724

 

44,454

Disposal of asset under financing

(5,304)

 

-

Construction and other financing

9,346

 

18,167

Software licenses and maintenance acquired under software obligation

493

 

15,266

Asset acquired under data obligation

15,306

 

-

Note payable issued in acquisition

300

 

-

17

 


 

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

12/31/07

YTD FY2008

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

56,350

64,409

62,659

76,534

259,952

 

39,132

40,644

130,094

209,870

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

Payments received from investments

783

1,925

-

50

2,758

 

-

1,799

1,804

3,603

 

Disposition of operations

-

-

-

-

-

 

-

-

14,250

14,250

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Capitalized software

(5,719)

(6,926)

(6,798)

(8,000)

(27,443)

 

(8,447)

(9,820)

(8,507)

(26,774)

 

Capital expenditures

(217)

(3,260)

(2,518)

(8,230)

(14,225)

 

(2,867)

(5,291)

(6,891)

(15,049)

 

Deferral of costs

(16,887)

(16,559)

(16,149)

(17,092)

(66,687)

 

(14,129)

(11,630)

(17,460)

(43,219)

 

Payments on capital leases and installment payment arrangements

(18,905)

(21,951)

(16,700)

(18,579)

(76,135)

 

(19,137)

(17,651)

(17,542)

(54,330)

 

Payments on software and data license liabilities

(7,847)

(7,304)

(6,000)

(5,746)

(26,897)

 

(6,493)

(7,279)

(6,226)

(19,998)

 

Other required debt payments

(1,711)

(1,804)

(3,117)

(3,603)

(10,235)

 

(3,526)

(2,416)

(5,612)

(11,554)

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

5,847

8,530

11,377

15,334

41,088

 

(15,467)

(11,644)

83,910

56,799

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

Tax benefit of stock options and warrants

1,079

1,765

1,237

61

4,142

 

5,624

344

25

5,993

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

6,926

10,295

12,614

15,395

45,230

 

(9,843)

(11,300)

83,935

62,792

 

 

 

 

 

 

 

 

 

 

 

 

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)

83,935

62,792

18