0000733269-14-000003.txt : 20140129 0000733269-14-000003.hdr.sgml : 20140129 20140129161253 ACCESSION NUMBER: 0000733269-14-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20140129 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140129 DATE AS OF CHANGE: 20140129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACXIOM CORP CENTRAL INDEX KEY: 0000733269 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 710581897 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13163 FILM NUMBER: 14556968 BUSINESS ADDRESS: STREET 1: 601 E. 3RD STREET CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5012521000 MAIL ADDRESS: STREET 1: 601 E. 3RD STREET CITY: LITTLE ROCK STATE: AR ZIP: 72201 FORMER COMPANY: FORMER CONFORMED NAME: CCX NETWORK INC DATE OF NAME CHANGE: 19880816 8-K 1 f8kjan2914.htm FORM 8-K (3RD QUARTER FY14 EARNINGS) f8kjan2914.htm
 
 
 
 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
  
     
 
FORM 8-K
  
     
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
  
     
 
Date of report (Date of earliest event reported):  January 29, 2014
  
     
 
ACXIOM CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
  
     
 
DELAWARE
(State or Other Jurisdiction of Incorporation)
 
  
0-13163
71-0581897
(Commission File Number)
(IRS Employer Identification No.)
   
601 E. Third St., Little Rock, Arkansas
72201
(Address of Principal Executive Offices)
(Zip Code)
 
501-342-1000
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 

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):


o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

 
Item 2.02                      Results of Operations and Financial Condition.

On January 29, 2014, Acxiom Corporation (the “Company”) issued a press release announcing the results of its financial performance for the third quarter of fiscal year 2014. The Company will hold a conference call at 4:00 p.m. CT 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. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

The Company’s press release and other communications from time to time include certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

The attached press release includes non-GAAP measures of (i) income from operations and diluted earnings per share attributable to Acxiom shareholders excluding unusual items and (ii) free cash flow available to equity. Operating income excluding unusual items and diluted earnings per share attributable to Acxiom shareholders excluding unusual items represent income from the Company’s operations less one-time expenses related to gains, losses and other items, the impact of business separation expenses recorded in selling, general and administrative expense, and the impact of an investment gain recorded in other income.  The Company’s management believes that these non-GAAP measures are meaningful since they represent the recurring income from the Company’s operations before one-time items, which are not a recurring part of the Company’s ordinary course operations.  The non-GAAP measures are reconciled to the corresponding GAAP measures of income from operations and diluted earnings per share attributable to Acxiom shareholders in a schedule to the press release.

Free cash flow available to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt. The Company’s management believes that this measure of free cash flow available to equity is meaningful since it represents the amount of money available for the Company’s discretionary spending after funding all required obligations including scheduled debt payments, and it therefore provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes. Free cash flow available to equity is reconciled to operating cash flow, the nearest comparable GAAP measure, in a schedule to the press release.

The non-GAAP financial measures used by the Company may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as substitutes for measures of financial performance or liquidity prepared in accordance with GAAP.


Item 9.01                      Financial Statements and Exhibits
 
(d)           Exhibits
 
The following exhibits are furnished herewith:
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated January 29, 2014

 
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:   January 29, 2014


ACXIOM CORPORATION

 
   By: /s/ Jerry C. Jones    
   Name: Jerry C. Jones    
   Title: Chief Ethics and Legal Officer & Executive Vice President    
       
 
 

 
 
 

EXHIBIT INDEX
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated January 29, 2014


 
 
 
 

EX-99.1 2 q3fy14fin.htm 3RD QUARTER FY14 EARNINGS RELEASE & FINANCIALS q3fy14fin.htm
 
 
 

ACXIOM LOGO

For more information, contact:
Katharine Boyce
Acxiom Investor Relations
501-342-1321
investor.relations@acxiom.com
 EACXM
 
 
ACXIOM ANNOUNCES THIRD QUARTER RESULTS
 
Strong Momentum for Acxiom Audience Operating System™
Increasing EPS Guidance for the Year
 
LITTLE ROCK, Ark. – January 29, 2014 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its third quarter ended December 31, 2013.
 
Total revenue for the third quarter was $278 million, up 2 percent from $273 million for the third quarter of fiscal 2013. Income from operations for the quarter was $20 million compared to $27 million for the prior-year period. Excluding unusual items, operating income was $29 million, up 10 percent from $27 million for the same period last year. Marketing and Data Services revenue for the third quarter increased 6 percent to $207 million compared to $195 million for the third quarter of last year. IT Infrastructure Management revenue was $62 million in the recent quarter, down 11 percent as expected from $70 million in the same period last year. Earnings per diluted share attributable to Acxiom stockholders were flat at $0.19. Excluding unusual items, diluted earnings per share were $0.25, up from $0.19 a year ago.  Included in the current quarter is a tax-related adjustment which positively impacted both earnings-per-share measures by roughly $0.04 per share.
 
Operating cash flow was up 48 percent to $195 million for the trailing twelve-month period compared to $133 million for the same period a year ago. Free cash flow to equity was up 136 percent to $103 million for the trailing twelve-month period compared to $44 million for the same prior-year period. Free cash flow to equity for the prior-year trailing twelve-month period excludes $73 million in proceeds from the sale of the company’s background screening business. Free cash flow to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.
 
A schedule outlining the impact of unusual items on the current and prior-year results is attached.
 
“We are thrilled with the progress made since our release of the Acxiom Audience Operating System,” said Acxiom CEO Scott Howe. “After just four months since launch, we now have more than 30 customers that are implementing or testing one or more aspects of AOS™.”
 
 
1
 
Third Quarter Highlights:
 
·  
Acxiom and Starcom MediaVest Group (SMG) are entering into a partnership by which SMG becomes the first agency to license Acxiom Audience Operating System (AOS) and bring it to market. SMG is the largest media agency in the world.
 
·  
Acxiom signed seven new AOS agreements during the quarter with customers in several key industries including: Financial Services, Insurance, Telecommunications and Retail.
 
·  
Acxiom increased its share repurchase authorization from $200 million to $250 million. The company repurchased approximately 400,000 shares for $13.8 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 12.3 million shares, or approximately 15 percent of the outstanding common stock, for $193 million.
 
·  
Subsequent to quarter end, Acxiom was named “Supplier of the Year” By Media Magazine, one of the industry’s most respected publications, for its contributions to the industry with its recent launches of AOS and AboutTheData.com™.
 
·  
On November 6th, Acxiom announced its plans to reduce its annual cost base by roughly $20 to $30 million over the next 6 to 12 months. The company is well underway on this initiative, and to date has taken steps to realize approximately $15 million in annualized cost reductions.
 
Segment Results:
 
·  
Marketing and Data Services: Revenue for the third quarter was $207 million, up from $195 million for the same period a year ago. U.S. revenue increased 6 percent to $175 million in the current quarter compared to $165 million for the third quarter of last year. Income from operations for the third quarter was $23 million, up from $18 million for the prior-year period. Operating margin was 11 percent as compared to 9 percent for the third quarter of last year.
 
·  
IT Infrastructure Management: Revenue for the third quarter decreased as expected by 11 percent to $62 million compared to $70 million for the same period a year ago. Income from operations for the recent quarter was $6 million compared to $10 million for the prior-year period. Operating margin was approximately 10 percent, down from 14 percent in the third quarter of last year.
 
·  
Other Services: Revenue for the third quarter was $9 million, up from $8 million in the comparable prior-year period. Operating margin improved to approximately 6 percent compared to a loss in the third quarter of last year.
 
Financial Guidance
 
The following projections are forward-looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward-Looking Statements section of this press release. Our guidance excludes unusual items. Acxiom’s estimates for fiscal 2014 are as follows:
 
 
2
 
·  
As previously disclosed, we expect revenue for the fiscal year to be down slightly compared to $1.099 billion in fiscal 2013. The small revenue decrease is primarily driven by an expected decline in IT Infrastructure Management revenues.
 
·  
We now expect earnings per diluted share attributable to Acxiom stockholders to be as much as $0.82. This is an increase from our previous guidance of roughly flat compared to the prior-year period.
 
 
Conference Call
 
Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.
 
Web Link to Financials
 
You may link to http://www.acxiom.com/FY14_Q3_Financials for the detailed financial information we typically attach to our earnings releases.
 
About Acxiom
 
Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.
 
Forward-Looking Statements
 
This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share for fiscal 2014, statements regarding cost base reductions, and statements regarding new customers and new product launches and capabilities. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to
 
 
3
 
continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.
 
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.
 
We undertake no obligation to update the information contained in this press release or any other forward-looking statement.
 
Acxiom is a registered trademark of Acxiom Corporation.
 
To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

 
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ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                         
                         
   
For the Three Months Ended
  
   
December 31,
  
                 $       %  
   
2013
    
2012
    
Variance
    
Variance
  
                           
Revenue:
                          
    Marketing and data services
     206,662       195,146       11,516       5.9 %
    IT Infrastructure management services
     62,099       69,916       (7,817 )     (11.2 %)
    Other services
     9,112       8,040       1,072       13.3 %
     Total revenue
     277,873       273,102       4,771       1.7 %
                                 
Operating costs and expenses:
                                
    Cost of revenue
     210,053       208,848       (1,205 )     (0.6 %)
    Selling, general and administrative
     43,383       37,482       (5,901 )     (15.7 %)
    Gains, losses and other items, net
     4,657       (126 )     4,783       3796.0 %
                                 
        Total operating costs and expenses
     258,093       246,204       (11,889 )     (4.8 %)
                                 
    Income from operations
     19,780       26,898       (7,118 )     (26.5 %)
     % Margin
     7.1 %     9.8 %                
   Other income (expense):
                                
     Interest expense
     (3,114 )     (3,178 )     64       2.0 %
     Other, net
     1,484       565       919       162.7 %
                                 
   Total other expense
     (1,630 )     (2,613 )     983       37.6 %
                                 
   Earnings before income taxes
     18,150       24,285       (6,135 )     (25.3 %)
                                 
   Income taxes
     3,083       9,836       6,753       68.7 %
                                 
   Net earnings
     15,067       14,449       618       4.3 %
                                 
  Less: Net loss attributable to noncontrolling interest
     -       (76 )     76       100.0 %
                                 
  Net earnings attributable to Acxiom
     15,067       14,525       542       3.7 %
                                 
Basic earnings per share:
                                
   Net earnings
     0.20       0.19       0.01       5.3 %
   Net earnings attributable to Acxiom stockholders
     0.20       0.20       0.00       0.0 %
                                 
                                 
Diluted earnings per share:
                                
   Net earnings
     0.19       0.19       0.00       0.0 %
   Net earnings attributable to Acxiom stockholders
     0.19       0.19       0.00       0.0 %
                                 

 


 
5 
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                         
                         
   
For the Nine Months Ended
  
   
December 31,
  
                 $       %  
   
2013
    
2012
    
Variance
    
Variance
  
                           
Revenue:
                          
    Marketing and data services
     595,407       586,230       9,177       1.6 %
    IT Infrastructure management services
     198,309       210,267       (11,958 )     (5.7 %)
    Other services
     26,621       25,731       890       3.5 %
     Total revenue
     820,337       822,228       (1,891 )     (0.2 %)
                                 
Operating costs and expenses:
                                
    Cost of revenue
     621,953       627,323       5,370       0.9 %
    Selling, general and administrative
     123,857       112,309       (11,548 )     (10.3 %)
    Gains, losses and other items, net
     11,044       66       (10,978 )     (16633.3 %)
                                 
        Total operating costs and expenses
     756,854       739,698       (17,156 )     (2.3 %)
                                 
    Income from operations
     63,483       82,530       (19,047 )     (23.1 %)
     % Margin
     7.7 %     10.0 %                
   Other income (expense):
                                
     Interest expense
     (9,113 )     (9,735 )     622       6.4 %
     Other, net
     1,238       (36 )     1,274       3538.9 %
                                 
   Total other expense
     (7,875 )     (9,771 )     1,896       19.4 %
                                 
   Earnings before income taxes
     55,608       72,759       (17,151 )     (23.6 %)
                                 
   Income taxes
     17,582       28,739       11,157       38.8 %
                                 
   Net earnings
     38,026       44,020       (5,994 )     (13.6 %)
                                 
  Less: Net loss attributable to noncontrolling interest
     (60 )     (349 )     289       82.8 %
                                 
  Net earnings attributable to Acxiom
     38,086       44,369       (6,283 )     (14.2 %)
                                 
Basic earnings per share:
                                
   Net earnings
     0.51       0.59       (0.08 )     (13.6 %)
   Net earnings attributable to Acxiom stockholders
     0.51       0.59       (0.08 )     (13.6 %)
                                 
                                 
Diluted earnings per share:
                                
   Net earnings
     0.50       0.57       (0.07 )     (12.3 %)
   Net earnings attributable to Acxiom stockholders
     0.50       0.58       (0.08 )     (13.8 %)
                                 


 
6 
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP EPS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                         
   
For the Three Months Ended
    
For the Nine Months Ended
  
   
December 31,
    
December 31,
  
   
2013
    
2012
    
2013
    
2012
  
                         
                         
   Earnings before income taxes
     18,150       24,285       55,608       72,759  
                                 
   Income taxes
     3,083       9,836       17,582       28,739  
                                 
   Net earnings
     15,067       14,449       38,026       44,020  
                                 
   Less: Net loss attributable to noncontrolling interest
     -       (76 )     (60 )     (349 )
                                 
   Net earnings attributable to Acxiom
     15,067       14,525       38,086       44,369  
                                 
Earnings per share attributable to Acxiom stockholders:
                                
                                 
    Basic
     0.20       0.20       0.51       0.59  
                                 
    Diluted
     0.19       0.19       0.50       0.58  
                                 
Unusual items:
                                
  Business separation expenses
     4,897       -       7,083       -  
  Legal settlement accruals
     1,000       -       4,200       -  
  Restructuring charges and other adjustments
     3,657       (126 )     6,844       66  
  Gain on investment
     (2,567 )     -       (2,567 )     -  
                                 
 Total unusual items
     6,987       (126 )     15,560       66  
                                 
   Earnings before income taxes and excluding unusual items
     25,137       24,159       71,168       72,825  
                                 
   Income taxes
     5,690       9,786       23,575       28,763  
                                 
   Non-GAAP net earnings
     19,447       14,373       47,593       44,062  
                                 
   Less: Net gain (loss) attributable to noncontrolling interest
     -       (76 )     (60 )     (349 )
                                 
   Non-GAAP net earnings attributable to Acxiom
     19,447       14,449       47,653       44,411  
                                 
Non-GAAP earnings per share attributable to Acxiom stockholders:
                                
                                 
    Basic
     0.26       0.19       0.64       0.59  
                                 
    Diluted
     0.25       0.19       0.62       0.58  
                                 
Diluted weighted average shares
     77,839       75,878       76,456       76,987  
                                 
                                 


 
7 
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                         
   
For the Three Months Ended
    
For the Nine Months Ended
  
   
December 31,
    
December 31,
  
   
2013
    
2012
    
2013
    
2012
  
                         
   Income from operations
     19,780       26,898       63,483       82,530  
                                 
   Unusual items
     9,554       (126 )     18,127       66  
                                 
   Income from operations before unusual items
     29,334       26,772       81,610       82,596  
                                 
                                 



 
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,
  
   
2013
    
2012
  
             
Basic earnings per share:
            
    Numerator - net earnings
     15,067       14,449  
    Denominator - weighted-average shares outstanding
     75,009       74,103  
        Basic earnings per share
     0.20       0.19  
                 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
                
    Numerator - net earnings attributable to Acxiom
     15,067       14,525  
    Denominator - weighted-average shares outstanding
     75,009       74,103  
        Basic earnings per share - net earnings  attributable to Acxiom stockholders
     0.20       0.20  
                 
Diluted earnings per share:
                
    Numerator - net earnings
     15,067       14,449  
    Denominator - weighted-average shares outstanding
     75,009       74,103  
    Dilutive effect of common stock options, warrants and restricted stock
     2,830       1,775  
      77,839       75,878  
                 
        Diluted earnings per share
     0.19       0.19  
                 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
                
    Numerator - net earnings attributable to Acxiom
     15,067       14,525  
    Denominator - weighted-average shares outstanding
     75,009       74,103  
    Dilutive effect of common stock options, warrants, and restricted stock
     2,830       1,775  
      77,839       75,878  
                 
        Diluted earnings per share - net earnings attributable to Acxiom stockholders
     0.19       0.19  
                 
                 

 


 
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,
  
   
2013
    
2012
  
             
Basic earnings per share:
            
    Numerator - net earnings
     38,026       44,020  
    Denominator - weighted-average shares outstanding
     74,155       75,195  
        Basic earnings per share
     0.51       0.59  
                 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
                
    Numerator - net earnings attributable to Acxiom
     38,086       44,369  
    Denominator - weighted-average shares outstanding
     74,155       75,195  
        Basic earnings per share - net earnings attributable to Acxiom stockholders
     0.51       0.59  
                 
Diluted earnings per share:
                
    Numerator - net earnings
     38,026       44,020  
    Denominator - weighted-average shares outstanding
     74,155       75,195  
    Dilutive effect of common stock options, warrants and restricted stock
     2,301       1,792  
      76,456       76,987  
                 
        Diluted earnings per share
     0.50       0.57  
                 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
                
    Numerator - net earnings attributable to Acxiom
     38,086       44,369  
    Denominator - weighted-average shares outstanding
     74,155       75,195  
    Dilutive effect of common stock options, warrants, and restricted stock
     2,301       1,792  
      76,456       76,987  
                 
        Diluted earnings per share - net earnings attributable to Acxiom stockholders
     0.50       0.58  
                 
                 

 
10 
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
             
             
   
For the Three Months Ended
  
             
   
December 31,
    
December 31,
  
Revenue:
  
2013
    
2012
  
             
Marketing and data services
     206,662       195,146  
IT Infrastructure management services
     62,099       69,916  
Other services
     9,112       8,040  
                 
Total revenue
     277,873       273,102  
                 
                 
Income from operations:
                
                 
Marketing and data services
     22,518       18,186  
IT Infrastructure management services
     6,316       9,622  
Other services
     500       (1,036 )
Corporate
     (9,554 )     126  
                 
Total income from operations
     19,780       26,898  
                 
Margin:
                
                 
Marketing and data services
     10.9 %     9.3 %
IT Infrastructure management services
     10.2 %     13.8 %
Other services
     5.5 %     -12.9 %
                 
Total margin
     7.1 %     9.8 %
                 
                 



 
11
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
             
             
   
For the Nine Months Ended
  
             
   
December 31,
    
December 31,
  
Revenue:
  
2013
    
2012
  
             
Marketing and data services
     595,407       586,230  
IT Infrastructure management services
     198,309       210,267  
Other services
     26,621       25,731  
                 
Total revenue
     820,337       822,228  
                 
                 
Income from operations:
                
                 
Marketing and data services
     51,189       59,151  
IT Infrastructure management services
     29,044       26,973  
Other services
     1,377       (3,528 )
Corporate
     (18,127 )     (66 )
                 
Total income from operations
     63,483       82,530  
                 
Margin:
                
                 
Marketing and data services
     8.6 %     10.1 %
IT Infrastructure management services
     14.6 %     12.8 %
Other services
     5.2 %     -13.7 %
                 
Total margin
     7.7 %     10.0 %




 
12
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
December 31,
    
March 31,
           $   %
   
2013
    
2013
    
Variance
    
Variance
  
Assets
                          
Current assets:
                          
  Cash and cash equivalents
     380,908       222,974       157,934       70.8 %
  Trade accounts receivable, net
     168,931       159,882       9,049       5.7 %
  Deferred income taxes
     14,055       13,496       559       4.1 %
  Refundable income taxes
     -       5,809       (5,809 )     (100.0 %)
  Other current assets
     53,405       58,935       (5,530 )     (9.4 %)
                                 
     Total current assets
     617,299       461,096       156,203       33.9 %
                                 
Property and equipment
     846,950       822,439       24,511       3.0 %
  Less - accumulated depreciation and amortization
     632,172       591,687       40,485       6.8 %
                                 
Property and equipment, net
     214,778       230,752       (15,974 )     (6.9 %)
                                 
Software, net of accumulated amortization
     37,063       24,471       12,592       51.5 %
Goodwill
     380,591       381,129       (538 )     (0.1 %)
Purchased software licenses, net of accumulated amortization
     19,509       23,604       (4,095 )     (17.3 %)
Deferred costs, net
     24,564       42,971       (18,407 )     (42.8 %)
Data acquisition costs
     8,142       10,631       (2,489 )     (23.4 %)
Other assets, net
     11,935       13,052       (1,117 )     (8.6 %)
                                 
      1,313,881       1,187,706       126,175       10.6 %
                                 
Liabilities and Stockholders' Equity
                                
Current liabilities:
                                
  Current installments of long-term debt
     25,636       16,105       9,531       59.2 %
  Trade accounts payable
     23,562       35,786       (12,224 )     (34.2 %)
  Accrued payroll and related expenses
     51,287       62,390       (11,103 )     (17.8 %)
  Other accrued expenses
     75,394       68,270       7,124       10.4 %
  Deferred revenue
     50,149       41,388       8,761       21.2 %
  Income taxes
     1,719       637       1,082       169.9 %
                                 
   Total current liabilities
     227,747       224,576       3,171       1.4 %
                                 
Long-term debt
     297,703       237,400       60,303       25.4 %
                                 
Deferred income taxes
     91,823       94,918       (3,095 )     (3.3 %)
                                 
Other liabilities
     11,253       11,444       (191 )     (1.7 %)
                                 
  Stockholders' equity:
                                
  Common stock
     12,527       12,134       393       3.2 %
  Additional paid-in capital
     964,906       885,184       79,722       9.0 %
  Retained earnings
     632,052       593,966       38,086       6.4 %
  Accumulated other comprehensive income
     13,197       11,423       1,774       15.5 %
  Treasury stock, at cost
     (937,327 )     (882,959 )     (54,368 )     (6.2 %)
Total Acxiom stockholders' equity
     685,355       619,748       65,607       10.6 %
  Noncontrolling interest
     -       (380 )     380       100.0 %
                                 
  Total equity
     685,355       619,368       65,987       10.7 %
                                 
      1,313,881       1,187,706       126,175       10.6 %



 
13
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Unaudited)
  
(Dollars in thousands)
  
             
   
For the Three Months Ended
  
             
   
December 31,
  
             
   
2013
    
2012
  
             
Cash flows from operating activities:
            
  Net earnings
     15,067       14,449  
  Non-cash operating activities:
                
    Depreciation and amortization
     25,608       29,363  
    Gain on disposal or impairment of assets
     (2,567 )     -  
    Loss on early extinguishment of debt
     664       -  
    Deferred income taxes
     (3,138 )     (2,962 )
    Non-cash stock compensation expense
     3,455       3,103  
    Changes in operating assets and liabilities:
                
      Accounts receivable
     7,395       (15,867 )
      Other assets
     6,646       5,492  
      Deferred costs
     (89 )     (326 )
      Accounts payable and other liabilities
     8,114       5,525  
      Deferred revenue
     2,617       (234 )
      Net cash provided by operating activities
     63,772       38,543  
Cash flows from investing activities:
                
    Capitalized software
     (5,495 )     (5,443 )
    Capital expenditures
     (6,700 )     (10,260 )
    Data acquisition costs
     (1,786 )     (2,766 )
    Payments from investments
     3,633       -  
      Net cash used by investing activities
     (10,348 )     (18,469 )
Cash flows from financing activities:
                
    Proceeds from debt
     300,000       -  
    Payments of debt
     (220,934 )     (6,252 )
    Fees for debt refinancing
     (4,370 )     -  
    Sale of common stock
     50,547       2,128  
    Acquisition of treasury stock
     (13,826 )     (18,256 )
    Acquisition of NCI
     (600 )     -  
      Net cash used by financing activities
     110,817       (22,380 )
      Effect of exchange rate changes on cash
     51       122  
                 
  Net change in cash and cash equivalents
     164,292       (2,184 )
  Cash and cash equivalents at beginning of period
     216,616       188,404  
  Cash and cash equivalents at end of period
     380,908       186,220  
                 
   Supplemental cash flow information:
                
    Cash paid during the period for:
                
      Interest
     3,281       3,178  
      Income taxes
     4,766       12,104  
      Payments on capital leases and installment payment arrangements
     1,675       4,002  
      Payments on software and data license liabilities
     -       78  
      Other debt payments, excluding line of credit
     4,259       2,172  
      Prepayment of debt
     215,000       -  
                 
                 
                 
                 



 
14
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Unaudited)
  
(Dollars in thousands)
  
             
   
For the Nine Months Ended
  
             
   
December 31,
  
             
   
2013
    
2012
  
             
Cash flows from operating activities:
            
  Net earnings
     38,026       44,020  
  Non-cash operating activities:
                
    Depreciation and amortization
     76,127       89,594  
    Loss (gain) on disposal or impairment of assets
     (2,567 )     25  
    Loss on early extinguishment of debt
     664       -  
    Deferred income taxes
     (3,666 )     (6,428 )
    Non-cash stock compensation expense
     10,344       8,906  
    Changes in operating assets and liabilities:
                
      Accounts receivable
     1,531       (13,925 )
      Other assets
     6,791       756  
      Deferred costs
     (89 )     (1,600 )
      Accounts payable and other liabilities
     (12,553 )     (32,607 )
      Deferred revenue
     6,534       (12,830 )
      Net cash provided by operating activities
     121,142       75,911  
Cash flows from investing activities:
                
    Capitalized software
     (19,109 )     (13,190 )
    Capital expenditures
     (24,889 )     (21,976 )
    Data acquisition costs
     (4,660 )     (6,464 )
    Payments from investments
     3,633       -  
      Net cash used by investing activities
     (45,025 )     (41,630 )
Cash flows from financing activities:
                
    Proceeds from debt
     300,000       -  
    Payments of debt
     (230,167 )     (19,790 )
    Fees for debt refinancing
     (4,370 )     -  
    Sale of common stock
     69,106       7,863  
    Acquisition of treasury stock
     (52,663 )     (65,356 )
    Acquisition of NCI
     (600 )     -  
    Contingent consideration paid for prior acquisitions
     -       (287 )
      Net cash used by financing activities
     81,306       (77,570 )
      Effect of exchange rate changes on cash
     511       (139 )
                 
      Net change in cash and cash equivalents
     157,934       (43,428 )
  Cash and cash equivalents at beginning of period
     222,974       229,648  
  Cash and cash equivalents at end of period
     380,908       186,220  
                 
  Supplemental cash flow information:
                
    Cash paid during the period for:
                
      Interest
     9,267       9,678  
      Income taxes
     15,774       48,268  
      Payments on capital leases and installment payment arrangements
     6,914       12,948  
      Payments on software and data license liabilities
     -       337  
      Other debt payments, excluding line of credit
     8,253       6,505  
      Prepayment of debt
     215,000       -  
    Noncash investing and financing activities:
                
      Acquisition of property and equipment under capital lease
                
           and installment payment arrangements
     -       2,157  

 


 
15
 

                                                                   
ACXIOM CORPORATION AND SUBSIDIARIES
              
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
              
AND RECONCILIATION TO OPERATING CASH FLOW
              
(Unaudited)
              
(Dollars in thousands)
              
                                                                   
                                                                   
   
06/30/12
    
09/30/12
    
12/31/12
    
03/31/13
    
YTD FY2013
    
06/30/13
    
09/30/13
    
12/31/13
    
YTD FY2014
    
TTM 12/31/12
    
TTM 12/31/13
  
                                                                   
Net cash provided (used) by operating activities
     (1,867 )     39,235       38,543       74,221       150,132       16,849       40,521       63,772       121,142       132,354       195,363  
                                                                                         
Less:
                                                                                        
    Disposition of operations
     -       -       -       -       -       -       -       -       -       73,468       -  
    Payments for investments
     -       -       -       -       -       -       -       3,633       3,633       -       3,633  
    Capitalized software
     (3,673 )     (4,074 )     (5,443 )     (6,689 )     (19,879 )     (5,954 )     (7,660 )     (5,495 )     (19,109 )     (15,285 )     (25,798 )
    Capital expenditures
     (3,538 )     (8,178 )     (10,260 )     (16,515 )     (38,491 )     (8,920 )     (9,269 )     (6,700 )     (24,889 )     (34,420 )     (41,404 )
    Data acquisition costs
     (2,302 )     (1,396 )     (2,766 )     (2,106 )     (8,570 )     (1,961 )     (913 )     (1,786 )     (4,660 )     (10,227 )     (6,766 )
    Payments on capital leases and installment payment arrangements
     (4,562 )     (4,384 )     (4,002 )     (3,566 )     (16,514 )     (2,900 )     (2,339 )     (1,675 )     (6,914 )     (17,592 )     (10,480 )
    Other required debt payments
     (2,294 )     (2,298 )     (2,250 )     (3,515 )     (10,357 )     (1,990 )     (2,004 )     (4,259 )     (8,253 )     (11,306 )     (11,768 )
                                                                                         
Total
     (18,236 )     18,905       13,822       41,830       56,321       (4,876 )     18,336       47,490       60,950       116,992       102,780  
                                                                                         
                                                                                         



 
16
 

                                                                   
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                                                                   
                                                         
Q3 FY14 to Q3 FY13
  
   
06/30/12
    
09/30/12
    
12/31/12
    
03/31/13
    
YTD FY2013
    
06/30/13
    
09/30/13
    
12/31/13
    
YTD FY2014
    
%
       $  
Revenue:
                                                                    
Marketing and data services
     192,482       198,602       195,146       202,510       788,740       187,793       200,952       206,662       595,407       5.9 %     11,516  
IT Infrastructure management services
     70,290       70,061       69,916       65,202       275,469       69,385       66,825       62,099       198,309       -11.2 %     (7,817 )
Other services
     8,887       8,804       8,040       9,419       35,150       9,015       8,494       9,112       26,621       13.3 %     1,072  
  Total revenue
     271,659       277,467       273,102       277,131       1,099,359       266,193       276,271       277,873       820,337       1.7 %     4,771  
                                                                                         
Operating costs and expenses:
                                                                                        
Cost of revenue
     209,311       209,164       208,848       213,317       840,640       204,506       207,394       210,053       621,953       0.6 %     1,205  
Selling, general and administrative
     36,764       38,063       37,482       41,681       153,990       37,615       42,859       43,383       123,857       15.7 %     5,901  
Gains, losses and other items, net
     160       32       (126 )     1,944       2,010       -       6,387       4,657       11,044       -3796.0 %     4,783  
                                                                                         
     Total operating costs and expenses
     246,235       247,259       246,204       256,942       996,640       242,121       256,640       258,093       756,854       4.8 %     11,889  
                                                                                         
Income from operations
     25,424       30,208       26,898       20,189       102,719       24,072       19,631       19,780       63,483       -26.5 %     (7,118 )
  % Margin
     9.4 %     10.9 %     9.8 %     7.3 %     9.3 %     9.0 %     7.1 %     7.1 %     7.7 %                
Other expense
                                                                                        
  Interest expense
     (3,240 )     (3,317 )     (3,178 )     (2,959 )     (12,694 )     (3,019 )     (2,980 )     (3,114 )     (9,113 )     -2.0 %     64  
  Other, net
     (547 )     (54 )     565       188       152       104       (350 )     1,484       1,238       162.7 %     919  
Total other expense
     (3,787 )     (3,371 )     (2,613 )     (2,771 )     (12,542 )     (2,915 )     (3,330 )     (1,630 )     (7,875 )     -37.6 %     983  
                                                                                         
Earnings before income taxes
     21,637       26,837       24,285       17,418       90,177       21,157       16,301       18,150       55,608       -25.3 %     (6,135 )
Income taxes
     8,438       10,465       9,836       4,319       33,058       8,062       6,437       3,083       17,582       -68.7 %     (6,753 )
                                                                                         
Net earnings
     13,199       16,372       14,449       13,099       57,119       13,095       9,864       15,067       38,026       4.3 %     618  
                                                                                         
Less: Net gain (loss) attributable
                                                                                        
         to noncontrolling interest
     (134 )     (139 )     (76 )     (139 )     (488 )     (85 )     25       -       (60 )     -100.0 %     76  
                                                                                         
Net earnings attributable to Acxiom
     13,333       16,511       14,525       13,238       57,607       13,180       9,839       15,067       38,086       3.7 %     542  
                                                                                         
Diluted earnings per share - net earnings attributable
                                                                                        
to Acxiom stockholders
     0.17       0.21       0.19       0.18       0.75       0.17       0.13       0.19       0.50       0.0 %     0.00  
                                                                                         



 
17
 

ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
                                                                   
                                                         
Q3 FY14 to Q3 FY13
  
   
06/30/12
    
09/30/12
    
12/31/12
    
03/31/13
    
YTD FY2013
    
06/30/13
    
09/30/13
    
12/31/13
    
YTD FY2014
    
%
       $  
                                                                     
Revenue:
                                                                    
                                                                     
Marketing and data services
     192,482       198,602       195,146       202,510       788,740       187,793       200,952       206,662       595,407       6 %     11,516  
IT Infrastructure management services
     70,290       70,061       69,916       65,202       275,469       69,385       66,825       62,099       198,309       -11 %     (7,817 )
Other services
     8,887       8,804       8,040       9,419       35,150       9,015       8,494       9,112       26,621       13 %     1,072  
                                                                                         
Total revenue
     271,659       277,467       273,102       277,131       1,099,359       266,193       276,271       277,873       820,337       2 %     4,771  
                                                                                         
                                                                                         
Marketing and data services
     18,703       22,262       18,186       20,866       80,017       12,657       16,014       22,518       51,189       24 %     4,332  
IT Infrastructure management services
     8,831       8,520       9,622       2,357       29,330       10,761       11,967       6,316       29,044       -34 %     (3,306 )
Other services
     (1,950 )     (542 )     (1,036 )     (1,090 )     (4,618 )     654       223       500       1,377       -148 %     1,536  
Corporate
     (160 )     (32 )     126       (1,944 )     (2,010 )     -       (8,573 )     (9,554 )     (18,127 )     -7683 %     (9,680 )
                                                                                         
Total income from operations
     25,424       30,208       26,898       20,189       102,719       24,072       19,631       19,780       63,483       -26 %     (7,118 )
                                                                                         
Margin:
                                                                                        
                                                                                         
Marketing and data services
     9.7 %     11.2 %     9.3 %     10.3 %     10.1 %     6.7 %     8.0 %     10.9 %     8.6 %                
IT Infrastructure management services
     12.6 %     12.2 %     13.8 %     3.6 %     10.6 %     15.5 %     17.9 %     10.2 %     14.6 %                
Other services
     -21.9 %     -6.2 %     -12.9 %     -11.6 %     -13.1 %     7.3 %     2.6 %     5.5 %     5.2 %                
                                                                                         
Total
     9.4 %     10.9 %     9.8 %     7.3 %     9.3 %     9.0 %     7.1 %     7.1 %     7.7 %                
                                                                                         

 

 
 
18
 


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