Acxiom Announces Fourth Quarter and Fiscal Year Results

Wed May 15, 2013 4:05pm EDT

* Reuters is not responsible for the content in this press release.

Acxiom Announces Fourth Quarter and Fiscal Year Results

Announces New Products, Customers and Partnerships

Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company today announced financial results for its fourth quarter and fiscal year ended March 31, 2013.

Fourth Quarter Fiscal 2013

Revenue from continuing operations was $277 million for the quarter, down 3.5 percent compared to $287 million for the prior-year period. Income from continuing operations decreased 9 percent to $20 million in the current quarter, compared to $22 million in the prior year. Excluding unusual items, operating income for the quarter decreased to $22 million as compared to $35 million in the prior year. Earnings per diluted share attributable to Acxiom stockholders were $0.18 in the current quarter, compared to diluted earnings per share in the prior-year quarter of $0.58. Excluding unusual items for both periods, diluted earnings per share of $0.19 decreased 14 percent as compared to $0.22.

Operating cash flow was $74 million for the quarter, compared to $56 million for the comparable period a year ago, an increase of 31 percent. Free cash flow to equity decreased to $42 million for the quarter, compared to $103 million for the comparable period. Free cash flow to equity in the prior-year period included $73 million in proceeds from the sale of the company’s background screening business. Excluding the proceeds from the sale, free cash flow to equity increased 44 percent compared to $29 million in the prior period. Free cash flow available to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

Fiscal Year 2013

Revenue from continuing operations for the fiscal year ended March 31, 2013 decreased approximately 3 percent to $1,099 million, compared to $1,131 million in fiscal 2012. Earnings per diluted share attributable to Acxiom stockholders were $0.75 in fiscal 2013, compared to $0.96 in the prior year. Excluding unusual items and discontinued operations from both periods, earnings per diluted share attributable to Acxiom stockholders were $0.76 as compared to $0.72 in the prior year.

Operating cash flow decreased 35 percent to $150 million during the year, compared to $229 million in fiscal 2012. Free cash flow available to equity was $56 million, compared to $203 million in the prior year. The prior year result included $73 million in proceeds from the sale of the company’s background screening business. Both operating cash flow and free cash flow to equity were down as a result of changes in working capital and increased tax payments.

A schedule is attached to this release outlining the impact of the unusual items on the current and prior-year results.

“Fiscal 2013 was a year of transition for the company”, said Acxiom CEO Scott Howe. “This past year we re-ignited product innovation, invested in our clients and our associates and continued to support our shareholders through our stock repurchase program. Looking ahead to 2014 we expect to continue to invest in our new product suite, add new customers and anticipate product launches in the later part of the fiscal year.”

Fourth Quarter Highlights:

  • Acxiom introduced AbiliTagTM to address data needs for publishers. This solution is the first in a series of technologies and products to be announced. AbiliTag enables publishers to onboard first-party advertising data and allows for measurement and attribution across multiple channels. This product revolutionizes how publishers can monetize their advertising inventory. AbiliTag follows industry guidelines and best practices to protect consumer privacy.
  • Acxiom announced Audience PropensitiesTM. Audience Propensities offers insight into potential spending, in-market timing, brand affinity, media consumption and shopping behaviors. This product currently serves 13 major industries and enables marketers to more scientifically select media and more efficiently reach their audiences.
  • The company announced the Acxiom PrivateCloudTM. The Acxiom PrivateCloud offering is for organizations that require security-enriched cloud computing. PrivateCloud provides a virtual private data center dedicated to each tenant. It incorporates managed firewall, vulnerability scanning and enterprise anti-virus protection as standard services.
  • Acxiom announced a partnership with Facebook. Our clients are now able to reach members of Facebook’s very large and engaged audience with advertising targeted with the help of Acxiom data. The partnership enables Acxiom’s clients to reach with confidence their customers and prospects across both mobile and desktop devices with frequency and consistency. Our partnership with Facebook represents a big step toward achieving our objective, to provide one-to-one marketing at scale.
  • The company signed agreements with several new customers including: Foot Locker and Total Wine & More. Also, we have expanded our relationship with Macy’s and extended our relationship with two of the largest U.S. financial institutions.
  • The company repurchased approximately 500,000 shares for $9 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 10.4 million shares, or approximately 13 percent of the outstanding common stock, for $140 million. The company’s total share repurchase authorization is $200 million.

Segment Results:

  • Marketing and Data Services: Revenue for the fourth quarter decreased 3 percent to $197 million, as compared to $203 million for the same period a year ago. U.S. revenue of $168 million was relatively flat. Income from operations for the fourth quarter was $21 million, compared to $30 million in the prior year. Operating margin was 11 percent, compared to 15 percent in the previous year. The decrease in margin is primarily attributable to investments in data and our Audience Operating System.
  • IT Infrastructure Management: Revenue for the fourth quarter decreased 4 percent to $65 million, compared to $68 million for the same period a year ago. Income from operations for the quarter was $2 million, compared to $6 million in the prior year. Operating margin was approximately 4 percent, compared to 9 percent a year ago. The decline in operating income and margin was primarily associated with a one-time contract adjustment for an existing customer.
  • Other Services: Revenue was $14 million as compared to $16 million in the prior year. Loss from operations was roughly $1 million in each 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 does not take into account any unusual items. Acxiom’s estimates for fiscal 2014 are as follows:

  • We expect revenue for the fiscal year to be roughly flat as compared to $1.099 billion in Fiscal 2013. Revenue growth in Marketing and Data Services is expected to be offset by a decline in revenue in IT Infrastructure Management.
  • Earnings per diluted share attributable to Acxiom shareholders are also expected to be roughly flat.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CDT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. 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/FY13_Q4_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 as well as statements regarding future investments, new customers and new product launches. 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, which could lead to decreases in our operating results; 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 continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that 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, 2012, which was filed with the Securities and Exchange Commission on May 25, 2012.

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.

                 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Three Months Ended
March 31,
$ %
2013 2012 Variance Variance
 
Revenue:
Marketing and data services 197,452 203,400 (5,948 ) (2.9 %)
IT Infrastructure management services 65,202 67,590 (2,388 ) (3.5 %)
Other services 14,477   16,265   (1,788 ) (11.0 %)
Total revenue 277,131 287,255 (10,124 ) (3.5 %)
 
Operating costs and expenses:
Cost of revenue 213,587 213,788 201 0.1 %
Selling, general and administrative 41,411 38,577 (2,834 ) (7.3 %)
Gains, losses and other items, net 1,944   12,600   10,656 84.6 %
 
Total operating costs and expenses 256,942   264,965   8,023 3.0 %
 
Income from operations 20,189   22,290   (2,101 ) (9.4 %)
% Margin 7.3 % 7.8 %
Other income (expense):
Interest expense (2,959 ) (3,391 ) 432 12.7 %
Other, net 188   (219 ) 407 185.8 %
 
Total other income (expense) (2,771 ) (3,610 ) 839 23.2 %
 
Earnings from continuing operations before income taxes 17,418 18,680 (1,262 ) (6.8 %)
 
Income taxes 4,319   3,838   (481 ) (12.5 %)
 
Net earnings from continuing operations 13,099 14,842 (1,743 ) (11.7 %)
 
Earnings from discontinued operations, net of tax -   31,031   (31,031 ) (100.0 %)
 
Net earnings 13,099 45,873 (32,774 ) (71.4 %)
 
Less: Net loss attributable to noncontrolling interest (139 ) (193 ) 54 28.0 %
 
Net earnings attributable to Acxiom 13,238   46,066   (32,828 ) (71.3 %)
 
Basic earnings per share:
Net earnings from continuing operations 0.18 0.19 (0.01 ) (5.3 %)
Earnings from discontinued operations -   0.40   (0.40 ) (100.0 %)
Net earnings 0.18   0.59   (0.41 ) (69.5 %)
 
Net earnings attributable to Acxiom stockholders 0.18   0.59   (0.41 ) (69.5 %)
 
 
Diluted earnings per share:
Net earnings from continuing operations 0.17 0.19 (0.02 ) (10.5 %)
Earnings from discontinued operations -   0.39   (0.39 ) (100.0 %)
Net earnings 0.17   0.58   (0.41 ) (70.7 %)
 
Net earnings attributable to Acxiom stockholders 0.18   0.58   (0.40 ) (69.0 %)
                 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Twelve Months Ended
March 31,
$ %
2013 2012 Variance Variance
 
Revenue:
Marketing and data services 767,738 771,714 (3,976 ) (0.5 %)
IT Infrastructure management services 275,469 291,525 (16,056 ) (5.5 %)
Other services 56,152   67,385   (11,233 ) (16.7 %)
Total revenue 1,099,359 1,130,624 (31,265 ) (2.8 %)
 
Operating costs and expenses:
Cost of revenue 841,826 863,489 21,663 2.5 %
Selling, general and administrative 152,804 151,131 (1,673 ) (1.1 %)
Impairment of goodwill and other intangibles - 17,803 17,803 100.0 %
Gains, losses and other items, net 2,010   12,638   10,628 84.1 %
 
Total operating costs and expenses 996,640   1,045,061   48,421 4.6 %
 
Income from operations 102,719   85,563   17,156 20.1 %
% Margin 9.3 % 7.6 %
Other income (expense):
Interest expense (12,694 ) (17,448 ) 4,754 27.2 %
Other, net 152   (1,369 ) 1,521 111.1 %
 
Total other income (expense) (12,542 ) (18,817 ) 6,275 33.3 %
 
Earnings from continuing operations before income taxes 90,177 66,746 23,431 35.1 %
 
Income taxes 33,058   29,129   (3,929 ) (13.5 %)
 
Net earnings from continuing operations 57,119 37,617 19,502 51.8 %
 
Earnings from discontinued operations, net of tax -   33,899   (33,899 ) (100.0 %)
 
Net earnings 57,119 71,516 (14,397 ) (20.1 %)
 
Less: Net loss attributable to noncontrolling interest (488 ) (5,747 ) 5,259 91.5 %
 
Net earnings attributable to Acxiom 57,607   77,263   (19,656 ) (25.4 %)
 
Basic earnings per share:
Net earnings (loss) from continuing operations 0.76 0.47 0.29 61.7 %
Earnings from discontinued operations -   0.43   (0.43 ) (100.0 %)
Net earnings 0.76   0.90   (0.14 ) 15.6 %
 
Net earnings (loss) attributable to Acxiom stockholders 0.77   0.97   (0.20 ) 20.6 %
 
 
Diluted earnings per share:
Net earnings from continuing operations 0.75 0.47 0.28 59.6 %
Earnings from discontinued operations -   0.42   (0.42 ) (100.0 %)
Net earnings 0.75   0.89   (0.14 ) (15.7 %)
 
Net earnings attributable to Acxiom stockholders 0.75   0.96   (0.21 ) (21.9 %)
                 
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 Twelve Months Ended
March 31, March 31,
2013 2012 2013 2012
 
 
Earnings from continuing operations before income taxes 17,418 18,680 90,177 66,746
 
Income taxes 4,319   3,838   33,058   29,129  
 
Net earnings from continuing operations 13,099 14,842 57,119 37,617
 
Earnings from discontinued operations, net of tax -   31,031   -   33,899  
 
Net earnings 13,099 45,873 57,119 71,516
 
Less: Net loss attributable to noncontrolling interest (139 ) (193 ) (488 ) (5,747 )
 
Net earnings attributable to Acxiom 13,238   46,066   57,607   77,263  
 
Earnings per share attributable to Acxiom stockholders:
 
Basic 0.18   0.59   0.77   0.97  
 
Diluted 0.18   0.58   0.75   0.96  
 
Unusual items:
 
MENA disposal - - - 2,512
Disposal of operations (878 ) - (878 ) -
Impairment of goodwill and other intangibles - - - 17,803
Adjustment of earnout liability - - - (2,598 )
Restructuring charges and other adjustments 2,822   12,600   2,888   12,724  
 
Total unusual items, continuing operations 1,944   12,600   2,010   30,441  
 

Earnings from continuing operations before income taxes and excluding unusual items

19,362 31,280 92,187 97,187
 
Income taxes 5,398   14,082   34,163   40,423  
 
Non-GAAP net earnings 13,964 17,198 58,024 56,764
 
Less: Net loss attributable to noncontrolling interest (139 ) -   (488 ) (1,370 )
 
Non-GAAP Net earnings attributable to Acxiom 14,103   17,198   58,512   58,134  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.19   0.22   0.78   0.73  
 
Diluted 0.19   0.22   0.76   0.72  
 
Diluted weighted average shares 75,027   78,947   76,497   80,394  
                 
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 Twelve Months Ended
March 31, March 31,
2013 2012 2013 2012
 
Income from operations 20,189 22,290 102,719 85,563
 
Unusual items 1,944 12,600 2,010 30,441
 
Income from operations before unusual items 22,133 34,890 104,729 116,004
           
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
 
 
For the Three Months Ended
 
March 31, March 31,
2013 2012
 
Basic earnings per share from continuing operations:
Numerator - net earnings 13,099 14,842
Denominator - weighted-average shares outstanding 73,670 77,818
Basic earnings per share 0.18 0.19
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 13,238 46,066
Denominator - weighted-average shares outstanding 73,670 77,818
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.18 0.59
 
Diluted earnings per share from continuing operations:
Numerator - net earnings 13,099 14,842
 
Denominator - weighted-average shares outstanding 73,670 77,818
Dilutive effect of common stock options, warrants and restricted stock 1,357 1,129
75,027 78,947
 
Diluted earnings per share from continuing operations 0.17 0.19
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 13,238 46,066
 
Denominator - weighted-average shares outstanding 73,670 77,818
Dilutive effect of common stock options, warrants, and restricted stock 1,357 1,129
75,027 78,947
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.18 0.58
             
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
 
 
For the Twelve Months Ended
 
March 31, March 31,
2013 2012
 
Basic earnings per share from continuing operations:
Numerator - net earnings 57,119 37,617
Denominator - weighted-average shares outstanding 74,814 79,483
Basic earnings per share 0.76 0.47
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 57,607 77,263
Denominator - weighted-average shares outstanding 74,814 79,483
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.77 0.97
 
Diluted earnings per share from continuing operations:
Numerator - net earnings 57,119 37,617
 
Denominator - weighted-average shares outstanding 74,814 79,483
Dilutive effect of common stock options, warrants and restricted stock 1,683 911
76,497 80,394
 
Diluted earnings per share from continuing operations 0.75 0.47
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 57,607 77,263
 
Denominator - weighted-average shares outstanding 74,814 79,483
Dilutive effect of common stock options, warrants, and restricted stock 1,683 911
76,497 80,394
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.75 0.96
       
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
 
For the Three Months Ended
 
March 31, March 31,
Revenue: 2013 2012
 
Marketing and data services 197,452 203,400
IT Infrastructure management services 65,202 67,590
Other services 14,477 16,265
 
Total revenue 277,131 287,255
 
 
Income from continuing operations:
 
Marketing and data services 21,236 30,094
IT Infrastructure management services 2,357 5,855
Other services (1,460) (1,059)
Corporate (1,944) (12,600)
 
Total income from continuing operations 20,189 22,290
 
Margin:
 
Marketing and data services 10.8% 14.8%
IT Infrastructure management services 3.6% 8.7%
Other services -10.1% -6.5%
 
Total margin 7.3% 7.8%
       
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
 
For the Twelve Months Ended
 
March 31, March 31,
Revenue: 2013 2012
 
Marketing and data services 767,738 771,714
IT Infrastructure management services 275,469 291,525
Other services 56,152   67,385  
 
Total revenue 1,099,359   1,130,624  
 
 
Income from continuing operations:
 
Marketing and data services 80,513 95,820
IT Infrastructure management services 29,330 24,988
Other services (5,114 ) (4,804 )
Corporate (2,010 ) (30,441 )
 
Total income from continuing operations 102,719   85,563  
 
Margin:
 
Marketing and data services 10.5 % 12.4 %
IT Infrastructure management services 10.6 % 8.6 %
Other services -9.1 % -7.1 %
 
Total margin 9.3 % 7.6 %
                 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
 
March 31, March 31, $ %
2013 2012 Variance Variance

Assets

Current assets:
Cash and cash equivalents 222,974 229,648 (6,674 ) (2.9 %)
Trade accounts receivable, net 159,882 169,446 (9,564 ) (5.6 %)
Deferred income taxes 13,496 15,107 (1,611 ) (10.7 %)
Refundable income taxes 5,809 - 5,809 100.0 %
Other current assets 58,935   57,804   1,131 2.0 %
 
Total current assets 461,096   472,005   (10,909 ) (2.3 %)
 
Property and equipment 822,439 913,073 (90,634 ) (9.9 %)
Less - accumulated depreciation and amortization 591,687   659,700   (68,013 ) (10.3 %)
 
Property and equipment, net 230,752   253,373   (22,621 ) (8.9 %)
 
Software, net of accumulated amortization 24,471 13,211 11,260 85.2 %
Goodwill 381,129 382,285 (1,156 ) (0.3 %)
Purchased software licenses, net of accumulated amortization 23,604 25,294 (1,690 ) (6.7 %)
Deferred costs, net 42,971 61,977 (19,006 ) (30.7 %)
Data acquisition costs 10,631 15,009 (4,378 ) (29.2 %)
Other assets, net 13,052   9,623   3,429 35.6 %
 
1,187,706   1,232,777   (45,071 ) (3.7 %)
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 16,105 26,336 10,231 38.8 %
Trade accounts payable 35,786 31,030 (4,756 ) (15.3 %)
Accrued payroll and related expenses 62,390 54,839 (7,551 ) (13.8 %)
Other accrued expenses 68,270 67,847 (423 ) (0.6 %)
Deferred revenue 41,388 59,949 18,561 31.0 %
Income taxes 637   16,400   15,763 96.1 %
 
Total current liabilities 224,576   256,401   31,825 12.4 %
 
Long-term debt 237,400 251,886 14,486 5.8 %
 
Deferred income taxes 94,918 98,965 4,047 4.1 %
 
Other liabilities 11,444 13,670 2,226 16.3 %
 
Stockholders' equity:
Common stock 12,134 12,003 131 1.1 %
Additional paid-in capital 885,184 860,165 25,019 2.9 %
Retained earnings 593,966 536,359 57,607 10.7 %
Accumulated other comprehensive income 11,423 13,601 (2,178 ) (16.0 %)
Treasury stock, at cost (882,959 ) (810,381 ) (72,578 ) (9.0 %)
Total Acxiom stockholders' equity 619,748 611,747 8,001 1.3 %
Noncontrolling interest (380 ) 108   (488 ) (451.9 %)
 
Total equity 619,368   611,855   7,513 1.2 %
 
1,187,706   1,232,777   (45,071 ) (3.7 %)
       
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended
March 31,
 
2013     2012
 
Cash flows from operating activities:
Net earnings 13,099 45,873
Non-cash operating activities:
Depreciation and amortization 26,614 31,422
Loss (Gain) on disposal or impairment of assets - (48,380 )
Impairment of goodwill and other intangibles - -
Deferred income taxes 2,850 3,006
Non-cash stock compensation expense 3,096 2,060
Changes in operating assets and liabilities:
Accounts receivable 20,603 1,816
Other assets (9,941 ) (4,705 )
Deferred costs 36 (422 )
Accounts payable and other liabilities 23,719 35,916
Deferred revenue (5,855 ) (10,143 )
Net cash provided by operating activities 74,221   56,443  
Cash flows from investing activities:
Disposal of operations - 73,468
Capitalized software (6,689 ) (2,095 )
Capital expenditures (16,515 ) (12,444 )
Data acquisition costs (2,106 ) (3,763 )
Net cash provided (used) by investing activities (25,310 ) 55,166  
Cash flows from financing activities:
Payments of debt (7,081 ) (9,108 )
Sale of common stock 4,094 4,887
Tax impact of stock options, warrants, and restricted stock 357 (1,310 )
Acquisition of treasury stock (9,023 ) (22,708 )
Net cash used by financing activities (11,653 ) (28,239 )
Effect of exchange rate changes on cash (504 ) 415  
 
Net change in cash and cash equivalents 36,754 83,785
Cash and cash equivalents at beginning of period 186,220   145,863  
Cash and cash equivalents at end of period 222,974   229,648  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 3,031 3,568
Income taxes 9,196 5,594
Payments on capital leases and installment payment arrangements 3,566 4,644
Payments on software and data license liabilities 1,432 2,300
Other debt payments, excluding line of credit 2,083 2,164
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

- 2,509
       
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Twelve Months Ended
March 31,
       
2013     2012
 
Cash flows from operating activities:
Net earnings 57,119 71,516
Non-cash operating activities:
Depreciation and amortization 116,208 134,662
Loss (gain) on disposal or impairment of assets 25 (48,197 )
Impairment of goodwill and other intangibles - 17,803
Deferred income taxes (3,578 ) 2,228
Non-cash stock compensation expense 12,002 8,970
Changes in operating assets and liabilities:
Accounts receivable 6,678 (947 )
Other assets (9,185 ) (4,907 )
Deferred costs (1,564 ) (2,301 )
Accounts payable and other liabilities (8,888 ) 46,624
Deferred revenue (18,685 ) 4,000  
Net cash provided by operating activities 150,132   229,451  
Cash flows from investing activities:
Disposition of operations - 72,425
Capitalized software (19,879 ) (5,262 )
Capital expenditures (38,491 ) (51,591 )
Data acquisition costs (8,570 ) (12,312 )
Payments from investments - 370
Net cash paid in acquisitions -   (255 )
Net cash provided (used) by investing activities (66,940 ) 3,375  
Cash flows from financing activities:
Payments of debt (26,871 ) (154,876 )
Sale of common stock 11,957 12,205
Tax impact of stock options, warrants, and restricted stock 357 (1,310 )
Acquisition of treasury stock (74,378 ) (65,535 )
Contingent consideration paid for prior acquisitions (288 ) (326 )
Net cash used by financing activities (89,223 ) (209,842 )
Effect of exchange rate changes on cash (643 ) (309 )
 
Net change in cash and cash equivalents (6,674 ) 22,675
Cash and cash equivalents at beginning of period 229,648   206,973  
Cash and cash equivalents at end of period 222,974   229,648  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 12,709 19,059
Income taxes 57,464 20,765
Payments on capital leases and installment payment arrangements 16,514 18,331
Payments on software and data license liabilities 1,769 2,916
Other debt payments, excluding line of credit 8,588 8,629
Prepayment of debt - 125,000
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

2,157 11,242
                                         
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     12/31/12     03/31/13     YTD FY2013
 
Net cash provided (used) by operating activities 32,754 57,714 82,540 56,443 229,451 (1,867 ) 39,235 38,543 74,221 150,132
 
Less:
Disposition of operations - (1,043 ) - 73,468 72,425 - - - - -
Capitalized software (529 ) (991 ) (1,647 ) (2,095 ) (5,262 ) (3,673 ) (4,074 ) (5,443 ) (6,689 ) (19,879 )
Capital expenditures (12,577 ) (12,134 ) (14,436 ) (12,444 ) (51,591 ) (3,538 ) (8,178 ) (10,260 ) (16,515 ) (38,491 )
Data acquisition costs (2,776 ) (1,774 ) (3,999 ) (3,763 ) (12,312 ) (2,302 ) (1,396 ) (2,766 ) (2,106 ) (8,570 )
Payments on capital leases and installment payment arrangements (4,794 ) (4,184 ) (4,709 ) (4,644 ) (18,331 ) (4,562 ) (4,384 ) (4,002 ) (3,566 ) (16,514 )
Payments on software and data license liabilities (367 ) (124 ) (125 ) (2,300 ) (2,916 ) (129 ) (130 ) (78 ) (1,432 ) (1,769 )
Other required debt payments (2,151 )     (2,155 )     (2,159 )     (2,164 )     (8,629 ) (2,165 )     (2,168 )     (2,172 )     (2,083 )     (8,588 )
 
Total 9,560       35,309       55,465       102,501       202,835   (18,236 )     18,905       13,822       41,830       56,321  
                                                 
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
                                                    Q4 FY13 to Q4 FY12
06/30/11     09/30/11     12/31/11     03/31/12     FY2012 06/30/12     09/30/12     12/31/12     03/31/13     YTD FY2013 % $
Revenue:
Marketing and data services 184,996 195,857 187,461 203,400 771,714 185,739 194,409 190,138 197,452 767,738 -2.9 % (5,948 )
IT Infrastructure management services 73,050 73,712 77,173 67,590 291,525 70,290 70,061 69,916 65,202 275,469 -3.5 % (2,388 )
Other services 17,998       16,863       16,259       16,265       67,385   15,630       12,997       13,048       14,477       56,152   -11.0 %     (1,788 )
Total revenue 276,044 286,432 280,893 287,255 1,130,624 271,659 277,467 273,102 277,131 1,099,359 -3.5 % (10,124 )
 
Operating costs and expenses:
Cost of revenue 218,289 217,487 213,925 213,788 863,489 209,326 209,886 209,027 213,587 841,826 -0.1 % (201 )
Selling, general and administrative 36,807 39,429 36,318 38,577 151,131 36,749 37,341 37,303 41,411 152,804 7.3 % 2,834
Impairment of goodwill and other intangibles - - 17,803 - 17,803 - - - - - - -
Gains, losses and other items, net 244       2,465       (2,671 )     12,600       12,638   160       32       (126 )     1,944       2,010   -84.6 %     (10,656 )
 
Total operating costs and expenses 255,340 259,381 265,375 264,965 1,045,061 246,235 247,259 246,204 256,942 996,640 -3.0 % (8,023 )
 
Income from operations 20,704 27,051 15,518 22,290 85,563 25,424 30,208 26,898 20,189 102,719 -9.4 % (2,101 )
% Margin 7.5 % 9.4 % 5.5 % 7.8 % 7.6 % 9.4 % 10.9 % 9.8 % 7.3 % 9.3 %
Other expense
Interest expense (5,455 ) (4,719 ) (3,883 ) (3,391 ) (17,448 ) (3,240 ) (3,317 ) (3,178 ) (2,959 ) (12,694 ) 12.7 % 432
Other, net (87 )     (965 )     (98 )     (219 )     (1,369 ) (547 )     (54 )     565       188       152   185.8 %     407  
Total other expense (5,542 ) (5,684 ) (3,981 ) (3,610 ) (18,817 ) (3,787 ) (3,371 ) (2,613 ) (2,771 ) (12,542 ) 23.2 % 839
 
Earnings from continuing operations before income taxes 15,162 21,367 11,537 18,680 66,746 21,637 26,837 24,285 17,418 90,177 -6.8 % (1,262 )
Income taxes 6,063       9,528       9,700       3,838       29,129   8,438       10,465       9,836       4,319       33,058   12.5 %     481  
 
Net earnings from continuing operations 9,099 11,839 1,837 14,842 37,617 13,199 16,372 14,449 13,099 57,119 -11.7 % (1,743 )
 
Earnings from discontinued operations, net of tax 916       1,138       814       31,031       33,899   -       -       -       -       -   -100.0 %     (31,031 )
 
Net earnings 10,015 12,977 2,651 45,873 71,516 13,199 16,372 14,449 13,099 57,119 -71.4 % (32,774 )
 

Less: Net earnings (loss) attributable to noncontrolling interest

(960 )     685       (5,279 )     (193 )     (5,747 ) (134 )     (139 )     (76 )     (139 )     (488 )   28.0 %     54  
 
Net earnings attributable to Acxiom 10,975       12,292       7,930       46,066       77,263   13,333       16,511       14,525       13,238       57,607   -71.3 %     (32,828 )
 

Diluted earnings per share - net earnings attributable to Acxiom stockholders

0.13       0.15       0.10       0.58       0.96   0.17       0.21       0.19       0.18       0.75   -69.0 %     (0.40 )
   
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
                                             
                                                    Q4 FY13 to Q4 FY12
06/30/11     09/30/11     12/31/11     03/31/12     FY2012 06/30/12     09/30/12     12/31/12     03/31/13     YTD FY2013 %     $
 
Revenue:
 
Marketing and data services 184,996 195,857 187,461 203,400 771,714 185,739 194,409 190,138 197,452 767,738 -3 % (5,948 )
IT Infrastructure management services 73,050 73,712 77,173 67,590 291,525 70,290 70,061 69,916 65,202 275,469 -4 % (2,388 )
Other services 17,998       16,863       16,259       16,265       67,385   15,630       12,997       13,048       14,477       56,152   -11 %     (1,788 )
 
Total revenue 276,044       286,432       280,893       287,255       1,130,624   271,659       277,467       273,102       277,131       1,099,359   -4 %     (10,124 )
 
Income (loss) from operations:
 
Marketing and data services 17,260 27,078 21,388 30,094 95,820 17,975 23,331 17,971 21,236 80,513 -29 % (8,858 )
IT Infrastructure management services 4,247 5,091 9,795 5,855 24,988 8,831 8,520 9,622 2,357 29,330 -60 % (3,498 )
Other services (559 ) (2,653 ) (533 ) (1,059 ) (4,804 ) (1,222 ) (1,611 ) (821 ) (1,460 ) (5,114 ) -38 % (401 )
Corporate (244 )     (2,465 )     (15,132 )     (12,600 )     (30,441 ) (160 )     (32 )     126       (1,944 )     (2,010 ) 85 %     10,656  
 
Total income from operations 20,704       27,051       15,518       22,290       85,563   25,424       30,208       26,898       20,189       102,719   -9 %     (2,101 )
 
Margin:
 
Marketing and data services 9.3 % 13.8 % 11.4 % 14.8 % 12.4 % 9.7 % 12.0 % 9.5 % 10.8 % 10.5 %
IT Infrastructure management services 5.8 % 6.9 % 12.7 % 8.7 % 8.6 % 12.6 % 12.2 % 13.8 % 3.6 % 10.6 %
Other services -3.1 % -15.7 % -3.3 % -6.5 % -7.1 % -7.8 % -12.4 % -6.3 % -10.1 % -9.1 %
 
Total 7.5 % 9.4 % 5.5 % 7.8 % 7.6 % 9.4 % 10.9 % 9.8 % 7.3 % 9.3 %

Acxiom Investor Relations
Katharine Boyce, 501-342-1321
investor.relations@acxiom.com
EACXM

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