UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
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CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): October 25, 2012
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ACXIOM CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE
(State or Other Jurisdiction of Incorporation)
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0-13163
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71-0581897
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(Commission File Number)
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(IRS Employer Identification No.)
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601 E. Third St., Little Rock, Arkansas
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72201
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(Address of Principal Executive Offices)
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(Zip Code)
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501-342-1000
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(Registrant’s Telephone Number, Including Area Code)
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit
Number
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Description
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99.1
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Press Release of the Company dated October 25, 2012
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Exhibit
Number
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Description
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99.1
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Press Release of the Company dated October 25, 2012
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·
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0perating margin increased approximately 1.5 percentage points to 10.9 percent, as a result of improvements in the company’s IT infrastructure management segment and international operations. Excluding unusual items operating margin improved by approximately 60 basis points.
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·
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Acxiom repurchased 800,000 shares for $14 million during the quarter. Since August 2011, the company has repurchased 9 million shares, or approximately 11 percent of the outstanding common stock, for $115 million. The company has remaining capacity of approximately $35 million out of the total stock repurchase authorization of $150 million.
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·
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In the quarter, Acxiom clients United Airlines and Macy’s were both named “Marketer of the Year” by the Direct Marketing Association. United also received the top “Innovation Award.” These awards were given for outstanding achievement in multichannel direct marketing and represent the DMA’s highest honors. United partnered with Acxiom for its MileagePlus program, which delivered personalized and relevant communications to its members. Acxiom worked with Macy’s to create a more complete view of each customer to enable insight-driven communications coordinated across offline and digital channels.
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·
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Acxiom’s Board of Directors voted to expand its membership from nine to 10 directors and appointed Richard P. Fox, a business consultant and financial expert, to the board. Fox has a strong background in public company financial and accounting matters complemented by his work with digital marketing companies.
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·
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Acxiom Chief Marketing Officer Tim Suther was selected by the ranking committee of ExecRank as a Top CMO for 2012. The rankings are the result of two years of research and feedback from evaluation committees and top CMOs. ExecRank evaluated over 15,000 CMOs this year to identify the top 500.
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·
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Marketing and Data Services: Revenue for the second quarter was $194 million, roughly flat as compared to $196 million for the same period a year ago. U.S. revenue of $166 million was up 2 percent but was offset by declines internationally. Income from operations for the second quarter was $23 million, compared to $27 million in the prior period. Operating margin was 12 percent, compared to 14 percent in the previous year.
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·
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IT Infrastructure Management: Revenue for the second quarter decreased 5 percent to $70 million, compared to $74 million for the same period a year ago. Income from operations for the quarter was $9 million, compared to $5 million in the prior period. Operating margin was approximately 12 percent, compared to 7 percent a year ago.
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·
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Other Services: Revenue was $13 million as compared to $17 million in the prior year. Loss from operations was approximately $2 million, compared to $3 million in the prior-year period.
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·
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We continue to expect revenue to be flat to slightly down versus the prior year.
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·
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We now expect earnings per diluted share to be roughly $0.70 as compared to our previous guidance of $0.60 to $0.65.
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ACXIOM CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
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(Dollars in thousands, except earnings per share)
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||||||||||||||||
For the Three Months Ended
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September 30,
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||||||||||||||||
$ | % | |||||||||||||||
2012
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2011
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Variance
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Variance
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|||||||||||||
Revenue:
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||||||||||||||||
Marketing and data services
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194,409 | 195,857 | (1,448 | ) | (0.7 | %) | ||||||||||
IT Infrastructure management services
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70,061 | 73,712 | (3,651 | ) | (5.0 | %) | ||||||||||
Other services
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12,997 | 16,863 | (3,866 | ) | (22.9 | %) | ||||||||||
Total revenue
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277,467 | 286,432 | (8,965 | ) | (3.1 | %) | ||||||||||
Operating costs and expenses:
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||||||||||||||||
Cost of revenue
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209,886 | 217,487 | 7,601 | 3.5 | % | |||||||||||
Selling, general and administrative
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37,341 | 39,429 | 2,088 | 5.3 | % | |||||||||||
Gains, losses and other items, net
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32 | 2,465 | 2,433 | 98.7 | % | |||||||||||
Total operating costs and expenses
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247,259 | 259,381 | 12,122 | 4.7 | % | |||||||||||
Income from operations
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30,208 | 27,051 | 3,157 | 11.7 | % | |||||||||||
% Margin
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10.9 | % | 9.4 | % | ||||||||||||
Other expense:
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||||||||||||||||
Interest expense
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(3,317 | ) | (4,719 | ) | 1,402 | 29.7 | % | |||||||||
Other, net
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(54 | ) | (965 | ) | 911 | 94.4 | % | |||||||||
Total other expense
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(3,371 | ) | (5,684 | ) | 2,313 | 40.7 | % | |||||||||
Earnings from continuing operations before income taxes
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26,837 | 21,367 | 5,470 | 25.6 | % | |||||||||||
Income taxes
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10,465 | 9,528 | (937 | ) | (9.8 | %) | ||||||||||
Net earnings from continuing operations
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16,372 | 11,839 | 4,533 | 38.3 | % | |||||||||||
Earnings from discontinued operations, net of tax
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- | 1,138 | (1,138 | ) | (100.0 | %) | ||||||||||
Net earnings
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16,372 | 12,977 | 3,395 | 26.2 | % | |||||||||||
Less: Net gain (loss) attributable to noncontrolling interest
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(139 | ) | 685 | (824 | ) | (120.3 | %) | |||||||||
Net earnings attributable to Acxiom
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16,511 | 12,292 | 4,219 | 34.3 | % | |||||||||||
Basic earnings per share:
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||||||||||||||||
Net earnings from continuing operations
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0.22 | 0.15 | 0.07 | 46.7 | % | |||||||||||
Earnings from discontinued operations
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0.00 | 0.01 | (0.01 | ) | (100.0 | %) | ||||||||||
Net earnings
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0.22 | 0.16 | 0.06 | 37.5 | % | |||||||||||
Net earnings attributable to Acxiom stockholders
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0.22 | 0.15 | 0.07 | 46.7 | % | |||||||||||
Diluted earnings per share:
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Net earnings from continuing operations
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0.21 | 0.15 | 0.06 | 40.0 | % | |||||||||||
Earnings from discontinued operations
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0.00 | 0.01 | (0.01 | ) | (100.0 | %) | ||||||||||
Net earnings
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0.21 | 0.16 | 0.05 | 31.3 | % | |||||||||||
Net earnings attributable to Acxiom stockholders
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0.21 | 0.15 | 0.06 | 40.0 | % | |||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
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||||||||||||||||
(Dollars in thousands, except earnings per share)
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||||||||||||||||
For the Six Months Ended
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September 30,
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$ | % | |||||||||||||||
2012
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2011
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Variance
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Variance
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Revenue:
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Marketing and data services
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380,148 | 380,853 | (705 | ) | (0.2 | %) | ||||||||||
IT Infrastructure management services
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140,351 | 146,762 | (6,411 | ) | (4.4 | %) | ||||||||||
Other services
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28,627 | 34,861 | (6,234 | ) | (17.9 | %) | ||||||||||
Total revenue
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549,126 | 562,476 | (13,350 | ) | (2.4 | %) | ||||||||||
Operating costs and expenses:
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Cost of revenue
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419,212 | 435,776 | 16,564 | 3.8 | % | |||||||||||
Selling, general and administrative
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74,090 | 76,236 | 2,146 | 2.8 | % | |||||||||||
Gains, losses and other items, net
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192 | 2,709 | 2,517 | 92.9 | % | |||||||||||
Total operating costs and expenses
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493,494 | 514,721 | 21,227 | 4.1 | % | |||||||||||
Income from operations
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55,632 | 47,755 | 7,877 | 16.5 | % | |||||||||||
% Margin
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10.1 | % | 8.5 | % | ||||||||||||
Other expense:
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Interest expense
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(6,557 | ) | (10,174 | ) | 3,617 | 35.6 | % | |||||||||
Other, net
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(601 | ) | (1,052 | ) | 451 | 42.9 | % | |||||||||
Total other expense
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(7,158 | ) | (11,226 | ) | 4,068 | 36.2 | % | |||||||||
Earnings from continuing operations before income taxes
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48,474 | 36,529 | 11,945 | 32.7 | % | |||||||||||
Income taxes
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18,903 | 15,591 | (3,312 | ) | (21.2 | %) | ||||||||||
Net earnings from continuing operations
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29,571 | 20,938 | 8,633 | 41.2 | % | |||||||||||
Earnings from discontinued operations, net of tax
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- | 2,054 | (2,054 | ) | (100.0 | %) | ||||||||||
Net earnings
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29,571 | 22,992 | 6,579 | 28.6 | % | |||||||||||
Less: Net loss attributable to noncontrolling interest
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(273 | ) | (275 | ) | 2 | 0.7 | % | |||||||||
Net earnings attributable to Acxiom
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29,844 | 23,267 | 6,577 | 28.3 | % | |||||||||||
Basic earnings per share:
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Net earnings from continuing operations
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0.39 | 0.26 | 0.13 | 50.0 | % | |||||||||||
Earnings from discontinued operations
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0.00 | 0.03 | (0.03 | ) | (100.0 | %) | ||||||||||
Net earnings
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0.39 | 0.28 | 0.11 | 39.3 | % | |||||||||||
Net earnings attributable to Acxiom stockholders
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0.39 | 0.29 | 0.10 | 34.5 | % | |||||||||||
Diluted earnings per share:
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Net earnings from continuing operations
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0.38 | 0.26 | 0.12 | 46.2 | % | |||||||||||
Earnings from discontinued operations
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0.00 | 0.03 | (0.03 | ) | (100.0 | %) | ||||||||||
Net earnings
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0.38 | 0.28 | 0.10 | 35.7 | % | |||||||||||
Net earnings attributable to Acxiom stockholders
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0.38 | 0.28 | 0.10 | 35.7 | % | |||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
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RECONCILIATION OF GAAP TO NON-GAAP EPS
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(Unaudited)
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(Dollars in thousands, except earnings per share)
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||||||||||||||||
For the Three Months Ended
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For the Six Months Ended
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September 30,
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September 30,
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2012
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2011
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2012
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2011
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Earnings from continuing operations before income taxes
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26,837 | 21,367 | 48,474 | 36,529 | ||||||||||||
Income taxes
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10,465 | 9,528 | 18,903 | 15,591 | ||||||||||||
Net earnings from continuing operations
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16,372 | 11,839 | 29,571 | 20,938 | ||||||||||||
Earnings from discontinued operations, net of tax
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- | 1,138 | - | 2,054 | ||||||||||||
Net earnings
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16,372 | 12,977 | 29,571 | 22,992 | ||||||||||||
Less: Net gain (loss) attributable to noncontrolling interest
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(139 | ) | 685 | (273 | ) | (275 | ) | |||||||||
Net earnings attributable to Acxiom
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16,511 | 12,292 | 29,844 | 23,267 | ||||||||||||
Earnings per share attributable to Acxiom stockholders:
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Basic
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0.22 | 0.15 | 0.39 | 0.29 | ||||||||||||
Diluted
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0.21 | 0.15 | 0.38 | 0.29 | ||||||||||||
Unusual items:
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MENA disposal
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- | 2,512 | - | 2,512 | ||||||||||||
Disposal of Netherlands and Portugal operations
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- | (47 | ) | - | (75 | ) | ||||||||||
Restructuring charges and other adjustments
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32 | - | 192 | 272 | ||||||||||||
Total unusual items, continuing operations
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32 | 2,465 | 192 | 2,709 | ||||||||||||
Earnings from continuing operations before income taxes
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||||||||||||||||
and excluding unusual items
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26,869 | 23,832 | 48,666 | 39,238 | ||||||||||||
Income taxes
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10,477 | 9,531 | 18,978 | 15,692 | ||||||||||||
Non-GAAP earnings from continuing operations
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16,392 | 14,301 | 29,688 | 23,546 | ||||||||||||
Earnings from discontinued operations, net of tax
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- | 1,138 | - | 2,054 | ||||||||||||
Non-GAAP net earnings
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16,392 | 15,439 | 29,688 | 25,600 | ||||||||||||
Less: Net loss attributable to noncontrolling interest
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(139 | ) | (179 | ) | (273 | ) | (1,139 | ) | ||||||||
Non-GAAP Net earnings attributable to Acxiom
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16,531 | 15,618 | 29,961 | 26,739 | ||||||||||||
Non-GAAP earnings per share attributable to Acxiom stockholders:
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||||||||||||||||
Basic
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0.21 | 0.19 | 0.40 | 0.33 | ||||||||||||
Diluted
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0.21 | 0.19 | 0.39 | 0.33 | ||||||||||||
Diluted weighted average shares
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77,025 | 81,597 | 77,541 | 81,805 | ||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
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RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
|
||||||||||||||||
(Unaudited)
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||||||||||||||||
(Dollars in thousands, except earnings per share)
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||||||||||||||||
For the Three Months Ended
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For the Six Months Ended
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September 30,
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September 30,
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|||||||||||||||
2012
|
2011
|
2012
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2011
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Income from operations
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30,208 | 27,051 | 55,632 | 47,755 | ||||||||||||
Unusual items
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32 | 2,465 | 192 | 2,709 | ||||||||||||
Income from operations before unusual items
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30,240 | 29,516 | 55,824 | 50,464 | ||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
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CALCULATION OF EARNINGS PER SHARE
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(Unaudited)
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(In thousands, except earnings per share)
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For the Three Months Ended
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September 30,
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September 30,
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|||||||
2012
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2011
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Basic earnings per share from continuing operations:
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Numerator - net earnings
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16,372 | 11,839 | ||||||
Denominator - weighted-average shares outstanding
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75,009 | 80,985 | ||||||
Basic earnings per share
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0.22 | 0.15 | ||||||
Basic earnings per share - net earnings attributable to Acxiom stockholders:
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||||||||
Numerator - net earnings attributable to Acxiom
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16,511 | 12,292 | ||||||
Denominator - weighted-average shares outstanding
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75,009 | 80,985 | ||||||
Basic earnings per share - net earnings attributable to Acxiom stockholders
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0.22 | 0.15 | ||||||
Diluted earnings per share from continuing operations:
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||||||||
Numerator - net earnings
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16,372 | 11,839 | ||||||
Denominator - weighted-average shares outstanding
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75,009 | 80,985 | ||||||
Dilutive effect of common stock options, warrants and restricted stock
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2,016 | 612 | ||||||
77,025 | 81,597 | |||||||
Diluted earnings per share from continuing operations
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0.21 | 0.15 | ||||||
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
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||||||||
Numerator - net earnings attributable to Acxiom
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16,511 | 12,292 | ||||||
Denominator - weighted-average shares outstanding
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75,009 | 80,985 | ||||||
Dilutive effect of common stock options, warrants, and restricted stock
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2,016 | 612 | ||||||
77,025 | 81,597 | |||||||
Diluted earnings per share - net earnings attributable to Acxiom stockholders
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0.21 | 0.15 | ||||||
ACXIOM CORPORATION AND SUBSIDIARIES
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||||||||
CALCULATION OF EARNINGS PER SHARE
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(Unaudited)
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(In thousands, except earnings per share)
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||||||||
For the Six Months Ended
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||||||||
September 30,
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September 30,
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|||||||
2012
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2011
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Basic earnings per share from continuing operations:
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||||||||
Numerator - net earnings
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29,571 | 20,938 | ||||||
Denominator - weighted-average shares outstanding
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75,741 | 80,963 | ||||||
Basic earnings per share
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0.39 | 0.26 | ||||||
Basic earnings per share - net earnings attributable to Acxiom stockholders:
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||||||||
Numerator - net earnings attributable to Acxiom
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29,844 | 23,267 | ||||||
Denominator - weighted-average shares outstanding
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75,741 | 80,963 | ||||||
Basic earnings per share - net earnings attributable to Acxiom stockholders
|
0.39 | 0.29 | ||||||
Diluted earnings per share from continuing operations:
|
||||||||
Numerator - net earnings
|
29,571 | 20,938 | ||||||
Denominator - weighted-average shares outstanding
|
75,741 | 80,963 | ||||||
Dilutive effect of common stock options, warrants and restricted stock
|
1,800 | 842 | ||||||
77,541 | 81,805 | |||||||
Diluted earnings per share from continuing operations
|
0.38 | 0.26 | ||||||
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
|
||||||||
Numerator - net earnings attributable to Acxiom
|
29,844 | 23,267 | ||||||
Denominator - weighted-average shares outstanding
|
75,741 | 80,963 | ||||||
Dilutive effect of common stock options, warrants, and restricted stock
|
1,800 | 842 | ||||||
77,541 | 81,805 | |||||||
Diluted earnings per share - net earningsattributable to Acxiom stockholders
|
0.38 | 0.28 | ||||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||
RESULTS BY SEGMENT
|
||||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
For the Three Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
Revenue:
|
2012
|
2011
|
||||||
Marketing and data services
|
194,409 | 195,857 | ||||||
IT Infrastructure management services
|
70,061 | 73,712 | ||||||
Other services
|
12,997 | 16,863 | ||||||
Total revenue
|
277,467 | 286,432 | ||||||
Income from continuing operations:
|
||||||||
Marketing and data services
|
23,331 | 27,078 | ||||||
IT Infrastructure management services
|
8,520 | 5,091 | ||||||
Other services
|
(1,611 | ) | (2,653 | ) | ||||
Corporate
|
(32 | ) | (2,465 | ) | ||||
Total income from continuing operations
|
30,208 | 27,051 | ||||||
Margin:
|
||||||||
Marketing and data services
|
12.0 | % | 13.8 | % | ||||
IT Infrastructure management services
|
12.2 | % | 6.9 | % | ||||
Other services
|
-12.4 | % | -15.7 | % | ||||
Total margin
|
10.9 | % | 9.4 | % | ||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||
RESULTS BY SEGMENT
|
||||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
For the Six Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
Revenue:
|
2012
|
2011
|
||||||
Marketing and data services
|
380,148 | 380,853 | ||||||
IT Infrastructure management services
|
140,351 | 146,762 | ||||||
Other services
|
28,627 | 34,861 | ||||||
Total revenue
|
549,126 | 562,476 | ||||||
Income from continuing operations:
|
||||||||
Marketing and data services
|
41,306 | 44,338 | ||||||
IT Infrastructure management services
|
17,351 | 9,338 | ||||||
Other services
|
(2,833 | ) | (3,212 | ) | ||||
Corporate
|
(192 | ) | (2,709 | ) | ||||
Total income from continuing operations
|
55,632 | 47,755 | ||||||
Margin:
|
||||||||
Marketing and data services
|
10.9 | % | 11.6 | % | ||||
IT Infrastructure management services
|
12.4 | % | 6.4 | % | ||||
Other services
|
-9.9 | % | -9.2 | % | ||||
Total margin
|
10.1 | % | 8.5 | % | ||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
September 30,
|
March 31,
|
$ | % | |||||||||||||
2012
|
2012
|
Variance
|
Variance
|
|||||||||||||
Assets
|
||||||||||||||||
Current assets:
|
||||||||||||||||
Cash and cash equivalents
|
188,404 | 229,648 | (41,244 | ) | (18.0 | %) | ||||||||||
Trade accounts receivable, net
|
166,675 | 169,446 | (2,771 | ) | (1.6 | %) | ||||||||||
Deferred income taxes
|
14,837 | 15,107 | (270 | ) | (1.8 | %) | ||||||||||
Other current assets
|
58,990 | 57,804 | 1,186 | 2.1 | % | |||||||||||
Total current assets
|
428,906 | 472,005 | (43,099 | ) | (9.1 | %) | ||||||||||
Property and equipment
|
805,620 | 913,073 | (107,453 | ) | (11.8 | %) | ||||||||||
Less - accumulated depreciation and amortization
|
569,340 | 659,700 | (90,360 | ) | (13.7 | %) | ||||||||||
Property and equipment, net
|
236,280 | 253,373 | (17,093 | ) | (6.7 | %) | ||||||||||
Software, net of accumulated amortization
|
16,280 | 13,211 | 3,069 | 23.2 | % | |||||||||||
Goodwill
|
382,272 | 382,285 | (13 | ) | (0.0 | %) | ||||||||||
Purchased software licenses, net of accumulated amortization
|
23,791 | 25,294 | (1,503 | ) | (5.9 | %) | ||||||||||
Deferred costs, net
|
52,286 | 61,977 | (9,691 | ) | (15.6 | %) | ||||||||||
Data acquisition costs
|
11,985 | 15,009 | (3,024 | ) | (20.1 | %) | ||||||||||
Other assets, net
|
2,933 | 3,697 | (764 | ) | (20.7 | %) | ||||||||||
1,154,733 | 1,226,851 | (72,118 | ) | (5.9 | %) | |||||||||||
Liabilities and Stockholders' Equity
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Current installments of long-term debt
|
22,492 | 26,336 | (3,844 | ) | (14.6 | %) | ||||||||||
Trade accounts payable
|
17,781 | 31,030 | (13,249 | ) | (42.7 | %) | ||||||||||
Accrued payroll and related expenses
|
39,382 | 54,839 | (15,457 | ) | (28.2 | %) | ||||||||||
Other accrued expenses
|
81,073 | 77,062 | 4,011 | 5.2 | % | |||||||||||
Deferred revenue
|
47,432 | 59,949 | (12,517 | ) | (20.9 | %) | ||||||||||
Income taxes
|
2,499 | 16,400 | (13,901 | ) | (84.8 | %) | ||||||||||
Total current liabilities
|
210,659 | 265,616 | (54,957 | ) | (20.7 | %) | ||||||||||
Long-term debt
|
244,347 | 251,886 | (7,539 | ) | (3.0 | %) | ||||||||||
Deferred income taxes
|
89,578 | 93,039 | (3,461 | ) | (3.7 | %) | ||||||||||
Other liabilities
|
4,354 | 4,455 | (101 | ) | (2.3 | %) | ||||||||||
Stockholders' equity:
|
||||||||||||||||
Common stock
|
12,094 | 12,003 | 91 | 0.8 | % | |||||||||||
Additional paid-in capital
|
872,389 | 860,165 | 12,224 | 1.4 | % | |||||||||||
Retained earnings
|
566,203 | 536,359 | 29,844 | 5.6 | % | |||||||||||
Accumulated other comprehensive income
|
13,652 | 13,601 | 51 | 0.4 | % | |||||||||||
Treasury stock, at cost
|
(858,378 | ) | (810,381 | ) | (47,997 | ) | (5.9 | %) | ||||||||
Total Acxiom stockholders' equity
|
605,960 | 611,747 | (5,787 | ) | (0.9 | %) | ||||||||||
Noncontrolling interest
|
(165 | ) | 108 | (273 | ) | (252.8 | %) | |||||||||
Total equity
|
605,795 | 611,855 | (6,060 | ) | (1.0 | %) | ||||||||||
1,154,733 | 1,226,851 | (72,118 | ) | (5.9 | %) | |||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
For the Three Months Ended
|
||||||||
September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
16,372 | 12,977 | ||||||
Non-cash operating activities:
|
||||||||
Depreciation and amortization
|
29,236 | 34,959 | ||||||
Loss on disposal or impairment of assets
|
1 | 2,888 | ||||||
Deferred income taxes
|
(2,063 | ) | 1,098 | |||||
Non-cash stock compensation expense
|
3,150 | 2,845 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
6,551 | (6,054 | ) | |||||
Other assets
|
(3,339 | ) | 3,925 | |||||
Deferred costs
|
(627 | ) | (445 | ) | ||||
Accounts payable and other liabilities
|
(4,668 | ) | 9,750 | |||||
Deferred revenue
|
(5,378 | ) | (4,229 | ) | ||||
Net cash provided by operating activities
|
39,235 | 57,714 | ||||||
Cash flows from investing activities:
|
||||||||
Disposition of operations
|
- | (1,043 | ) | |||||
Capitalized software
|
(4,074 | ) | (991 | ) | ||||
Capital expenditures
|
(8,178 | ) | (12,134 | ) | ||||
Data acquisition costs
|
(1,396 | ) | (1,774 | ) | ||||
Net cash used by investing activities
|
(13,648 | ) | (15,942 | ) | ||||
Cash flows from financing activities:
|
||||||||
Payments of debt
|
(6,682 | ) | (81,463 | ) | ||||
Sale of common stock
|
3,974 | 2,779 | ||||||
Acquisition of treasury stock
|
(14,003 | ) | (34,100 | ) | ||||
Net cash used by financing activities
|
(16,711 | ) | (112,784 | ) | ||||
Effect of exchange rate changes on cash
|
246 | (919 | ) | |||||
Net change in cash and cash equivalents
|
9,122 | (71,931 | ) | |||||
Cash and cash equivalents at beginning of period
|
179,282 | 191,094 | ||||||
Cash and cash equivalents at end of period
|
188,404 | 119,163 | ||||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
3,277 | 5,742 | ||||||
Income taxes
|
19,971 | 4,289 | ||||||
Payments on capital leases and installment payment arrangements
|
4,384 | 4,184 | ||||||
Payments on software and data license liabilities
|
130 | 124 | ||||||
Other debt payments
|
2,168 | 2,155 | ||||||
Prepayment of debt
|
- | 75,000 | ||||||
Noncash investing and financing activities:
|
||||||||
Acquisition of property and equipment under capital lease
|
||||||||
and installment payment arrangements
|
- | 944 | ||||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
For the Six Months Ended
|
||||||||
September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
29,571 | 22,992 | ||||||
Non-cash operating activities:
|
||||||||
Depreciation and amortization
|
60,231 | 70,254 | ||||||
Loss on disposal or impairment of assets
|
25 | 2,893 | ||||||
Deferred income taxes
|
(3,466 | ) | 1,135 | |||||
Non-cash stock compensation expense
|
5,803 | 5,200 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
1,942 | (9,676 | ) | |||||
Other assets
|
(4,736 | ) | (4,592 | ) | ||||
Deferred costs
|
(1,274 | ) | (831 | ) | ||||
Accounts payable and other liabilities
|
(38,132 | ) | 6,071 | |||||
Deferred revenue
|
(12,596 | ) | (2,978 | ) | ||||
Net cash provided by operating activities
|
37,368 | 90,468 | ||||||
Cash flows from investing activities:
|
||||||||
Disposition of operations
|
(1,043 | ) | ||||||
Capitalized software
|
(7,747 | ) | (1,520 | ) | ||||
Capital expenditures
|
(11,716 | ) | (24,711 | ) | ||||
Data acquisition costs
|
(3,698 | ) | (4,550 | ) | ||||
Net cash paid in acquisitions
|
- | (255 | ) | |||||
Net cash used by investing activities
|
(23,161 | ) | (32,079 | ) | ||||
Cash flows from financing activities:
|
||||||||
Payments of debt
|
(13,538 | ) | (113,775 | ) | ||||
Sale of common stock
|
5,735 | 2,818 | ||||||
Acquisition of treasury stock
|
(47,100 | ) | (34,100 | ) | ||||
Contingent consideration paid for prior acquisitions
|
(287 | ) | (326 | ) | ||||
Net cash used by financing activities
|
(55,190 | ) | (145,383 | ) | ||||
Effect of exchange rate changes on cash
|
(261 | ) | (866 | ) | ||||
Net change in cash and cash equivalents
|
(41,244 | ) | (87,860 | ) | ||||
Cash and cash equivalents at beginning of period
|
229,648 | 207,023 | ||||||
Cash and cash equivalents at end of period
|
188,404 | 119,163 | ||||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
6,500 | 11,331 | ||||||
Income taxes
|
36,134 | 5,387 | ||||||
Payments on capital leases and installment payment arrangements
|
8,946 | 8,978 | ||||||
Payments on software and data license liabilities
|
259 | 491 | ||||||
Other debt payments
|
4,333 | 4,306 | ||||||
Prepayment of debt
|
- | 100,000 | ||||||
Noncash investing and financing activities:
|
||||||||
Acquisition of property and equipment under capital lease
|
||||||||
and installment payment arrangements
|
2,157 | 4,691 | ||||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
|
||||||||||||||||||||||||||||||||||||||||
AND RECONCILIATION TO OPERATING CASH FLOW
|
||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
06/30/11
|
09/30/11
|
12/31/11
|
03/31/12
|
FY2012
|
06/30/12
|
09/30/12
|
YTD FY2013
|
TTM 9/30/11
|
TTM 9/30/12
|
|||||||||||||||||||||||||||||||
Net cash provided (used) by operating activities
|
32,754 | 57,714 | 82,540 | 56,443 | 229,451 | (1,867 | ) | 39,235 | 37,368 | 196,733 | 176,351 | |||||||||||||||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||||||||||
Disposition of operations
|
- | (1,043 | ) | - | 73,468 | 72,425 | - | - | - | (1,043 | ) | 73,468 | ||||||||||||||||||||||||||||
Capitalized software
|
(529 | ) | (991 | ) | (1,647 | ) | (2,095 | ) | (5,262 | ) | (3,673 | ) | (4,074 | ) | (7,747 | ) | (3,508 | ) | (11,489 | ) | ||||||||||||||||||||
Capital expenditures
|
(12,577 | ) | (12,134 | ) | (14,436 | ) | (12,444 | ) | (51,591 | ) | (3,538 | ) | (8,178 | ) | (11,716 | ) | (53,246 | ) | (38,596 | ) | ||||||||||||||||||||
Data acquisition costs
|
(2,776 | ) | (1,774 | ) | (3,999 | ) | (3,763 | ) | (12,312 | ) | (2,302 | ) | (1,396 | ) | (3,698 | ) | (10,965 | ) | (11,460 | ) | ||||||||||||||||||||
Payments on capital leases and installment payment arrangements
|
(4,794 | ) | (4,184 | ) | (4,709 | ) | (4,644 | ) | (18,331 | ) | (4,562 | ) | (4,384 | ) | (8,946 | ) | (19,956 | ) | (18,299 | ) | ||||||||||||||||||||
Payments on software and data license liabilities
|
(367 | ) | (124 | ) | (125 | ) | (2,300 | ) | (2,916 | ) | (129 | ) | (130 | ) | (259 | ) | (4,750 | ) | (2,684 | ) | ||||||||||||||||||||
Other required debt payments
|
(2,151 | ) | (2,155 | ) | (2,159 | ) | (2,164 | ) | (8,629 | ) | (2,165 | ) | (2,168 | ) | (4,333 | ) | (8,603 | ) | (8,656 | ) | ||||||||||||||||||||
Total
|
9,560 | 35,309 | 55,465 | 102,501 | 202,835 | (18,236 | ) | 18,905 | 669 | 94,662 | 158,635 | |||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except earnings per share)
|
||||||||||||||||||||||||||||||||||||||||
Q2 FY13 to Q2 FY12
|
||||||||||||||||||||||||||||||||||||||||
06/30/11
|
09/30/11
|
12/31/11
|
03/31/12
|
FY2012
|
06/30/12
|
09/30/12
|
YTD FY2013
|
%
|
$ | |||||||||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||||||||||||||
Marketing and data services
|
184,996 | 195,857 | 187,461 | 203,400 | 771,714 | 185,739 | 194,409 | 380,148 | -0.7 | % | (1,448 | ) | ||||||||||||||||||||||||||||
IT Infrastructure management services
|
73,050 | 73,712 | 77,173 | 67,590 | 291,525 | 70,290 | 70,061 | 140,351 | -5.0 | % | (3,651 | ) | ||||||||||||||||||||||||||||
Other services
|
17,998 | 16,863 | 16,259 | 16,265 | 67,385 | 15,630 | 12,997 | 28,627 | -22.9 | % | (3,866 | ) | ||||||||||||||||||||||||||||
Total revenue
|
276,044 | 286,432 | 280,893 | 287,255 | 1,130,624 | 271,659 | 277,467 | 549,126 | -3.1 | % | (8,965 | ) | ||||||||||||||||||||||||||||
Operating costs and expenses:
|
||||||||||||||||||||||||||||||||||||||||
Cost of revenue
|
218,289 | 217,487 | 213,925 | 213,788 | 863,489 | 209,326 | 209,886 | 419,212 | -3.5 | % | (7,601 | ) | ||||||||||||||||||||||||||||
Selling, general and administrative
|
36,807 | 39,429 | 36,318 | 38,577 | 151,131 | 36,749 | 37,341 | 74,090 | -5.3 | % | (2,088 | ) | ||||||||||||||||||||||||||||
Impairment of goodwill and other intangibles
|
- | - | 17,803 | - | 17,803 | - | - | - | 0 | |||||||||||||||||||||||||||||||
Gains, losses and other items, net
|
244 | 2,465 | (2,671 | ) | 12,600 | 12,638 | 160 | 32 | 192 | -98.7 | % | (2,433 | ) | |||||||||||||||||||||||||||
Total operating costs and expenses
|
255,340 | 259,381 | 265,375 | 264,965 | 1,045,061 | 246,235 | 247,259 | 493,494 | 4.7 | % | 12,122 | |||||||||||||||||||||||||||||
Income from operations
|
20,704 | 27,051 | 15,518 | 22,290 | 85,563 | 25,424 | 30,208 | 55,632 | 11.7 | % | 3,157 | |||||||||||||||||||||||||||||
% Margin
|
7.5 | % | 9.4 | % | 5.5 | % | 7.8 | % | 7.6 | % | 9.4 | % | 10.9 | % | 10.1 | % | ||||||||||||||||||||||||
Other expense
|
||||||||||||||||||||||||||||||||||||||||
Interest expense
|
(5,455 | ) | (4,719 | ) | (3,883 | ) | (3,391 | ) | (17,448 | ) | (3,240 | ) | (3,317 | ) | (6,557 | ) | 29.7 | % | 1,402 | |||||||||||||||||||||
Other, net
|
(87 | ) | (965 | ) | (98 | ) | (219 | ) | (1,369 | ) | (547 | ) | (54 | ) | (601 | ) | 94.4 | % | 911 | |||||||||||||||||||||
Total other expense
|
(5,542 | ) | (5,684 | ) | (3,981 | ) | (3,610 | ) | (18,817 | ) | (3,787 | ) | (3,371 | ) | (7,158 | ) | 40.7 | % | 2,313 | |||||||||||||||||||||
Earnings from continuing operations before income taxes
|
15,162 | 21,367 | 11,537 | 18,680 | 66,746 | 21,637 | 26,837 | 48,474 | 25.6 | % | 5,470 | |||||||||||||||||||||||||||||
Income taxes
|
6,063 | 9,528 | 9,700 | 3,838 | 29,129 | 8,438 | 10,465 | 18,903 | -9.8 | % | (937 | ) | ||||||||||||||||||||||||||||
Net earnings from continuing operations
|
9,099 | 11,839 | 1,837 | 14,842 | 37,617 | 13,199 | 16,372 | 29,571 | 38.3 | % | 4,533 | |||||||||||||||||||||||||||||
Earnings from discontinued operations, net of tax
|
916 | 1,138 | 814 | 31,031 | 33,899 | - | - | - | -100.0 | % | (1,138 | ) | ||||||||||||||||||||||||||||
Net earnings
|
10,015 | 12,977 | 2,651 | 45,873 | 71,516 | 13,199 | 16,372 | 29,571 | 26.2 | % | 3,395 | |||||||||||||||||||||||||||||
Less: Net earnings (loss) attributable
|
||||||||||||||||||||||||||||||||||||||||
to noncontrolling interest
|
(960 | ) | 685 | (5,279 | ) | (193 | ) | (5,747 | ) | (134 | ) | (139 | ) | (273 | ) | -120.3 | % | (824 | ) | |||||||||||||||||||||
Net earnings attributable to Acxiom
|
10,975 | 12,292 | 7,930 | 46,066 | 77,263 | 13,333 | 16,511 | 29,844 | 34.3 | % | 4,219 | |||||||||||||||||||||||||||||
Diluted earnings per share - net earnings attributable
|
||||||||||||||||||||||||||||||||||||||||
to Acxiom stockholders
|
0.13 | 0.15 | 0.10 | 0.58 | 0.96 | 0.17 | 0.21 | 0.38 | 40.0 | % | 0.06 | |||||||||||||||||||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||
RESULTS BY SEGMENT
|
||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Q2 FY13 to Q2 FY12
|
||||||||||||||||||||||||||||||||||||||||
06/30/11
|
09/30/11
|
12/31/11
|
03/31/12
|
FY2012
|
06/30/12
|
09/30/12
|
YTD FY2013
|
%
|
$ | |||||||||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||||||||||||||
Marketing and data services
|
184,996 | 195,857 | 187,461 | 203,400 | 771,714 | 185,739 | 194,409 | 380,148 | -1 | % | (1,448 | ) | ||||||||||||||||||||||||||||
IT Infrastructure management services
|
73,050 | 73,712 | 77,173 | 67,590 | 291,525 | 70,290 | 70,061 | 140,351 | -5 | % | (3,651 | ) | ||||||||||||||||||||||||||||
Other services
|
17,998 | 16,863 | 16,259 | 16,265 | 67,385 | 15,630 | 12,997 | 28,627 | -23 | % | (3,866 | ) | ||||||||||||||||||||||||||||
Total revenue
|
276,044 | 286,432 | 280,893 | 287,255 | 1,130,624 | 271,659 | 277,467 | 549,126 | -3 | % | (8,965 | ) | ||||||||||||||||||||||||||||
Income (loss) from operations:
|
||||||||||||||||||||||||||||||||||||||||
Marketing and data services
|
17,260 | 27,078 | 21,388 | 30,094 | 95,820 | 17,975 | 23,331 | 41,306 | -14 | % | (3,747 | ) | ||||||||||||||||||||||||||||
IT Infrastructure management services
|
4,247 | 5,091 | 9,795 | 5,855 | 24,988 | 8,831 | 8,520 | 17,351 | 67 | % | 3,429 | |||||||||||||||||||||||||||||
Other services
|
(559 | ) | (2,653 | ) | (533 | ) | (1,059 | ) | (4,804 | ) | (1,222 | ) | (1,611 | ) | (2,833 | ) | 39 | % | 1,042 | |||||||||||||||||||||
Corporate
|
(244 | ) | (2,465 | ) | (15,132 | ) | (12,600 | ) | (30,441 | ) | (160 | ) | (32 | ) | (192 | ) | 99 | % | 2,433 | |||||||||||||||||||||
Total income from operations
|
20,704 | 27,051 | 15,518 | 22,290 | 85,563 | 25,424 | 30,208 | 55,632 | 12 | % | 3,157 | |||||||||||||||||||||||||||||
Margin:
|
||||||||||||||||||||||||||||||||||||||||
Marketing and data services
|
9.3 | % | 13.8 | % | 11.4 | % | 14.8 | % | 12.4 | % | 9.7 | % | 12.0 | % | 10.9 | % | ||||||||||||||||||||||||
IT Infrastructure management services
|
5.8 | % | 6.9 | % | 12.7 | % | 8.7 | % | 8.6 | % | 12.6 | % | 12.2 | % | 12.4 | % | ||||||||||||||||||||||||
Other services
|
-3.1 | % | -15.7 | % | -3.3 | % | -6.5 | % | -7.1 | % | -7.8 | % | -12.4 | % | -9.9 | % | ||||||||||||||||||||||||
Total
|
7.5 | % | 9.4 | % | 5.5 | % | 7.8 | % | 7.6 | % | 9.4 | % | 10.9 | % | 10.1 | % | ||||||||||||||||||||||||