Acxiom (NASDAQ:ACXM)
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Acxiom(R) Corporation (NASDAQ: ACXM) today announced financial
results for the first quarter of fiscal 2008 ended June 30, 2007.
Revenue for the three-month period was $338.2 million, an increase of
0.4 percent over $336.7 million for the comparable prior-year period.
Income from operations for the three-month period equaled $4.1 million
compared to $36.3 million for the quarter ended June 30, 2006. The
diluted loss per share of $.15 includes the impact of $20.6 million,
or 24 cents per diluted share, in unusual expense items, net of income
tax effect, in the quarter detailed below.
Charles D. Morgan, Acxiom's company leader and chairman of the
board stated, "We remain focused on operating results while we advance
the acquisition process with Silver Lake and ValueAct Capital. We
continue to believe that successfully completing this deal is in the
best interests of Acxiom and its constituents."
Details of Acxiom's first-quarter performance include:
-- Revenue of $338.2 million, up 0.4 percent from $336.7 million
in the first quarter a year ago.
-- Income from operations of $4.1 million, an 88.6 percent
decrease compared to $36.3 million in the first quarter last
year.
-- Unusual items that added $20.6 million in expenses in the
quarter. Included were costs related to the pending
transaction with Silver Lake and ValueAct Capital of $15.1
million, which are non-deductible for tax purposes, and $5.5
million predominantly related to the write-off of certain
long-term assets related to an amended contract with an
information technology outsourcing client. These expenses
reduced first-quarter diluted earnings per share by $.24.
-- Diluted loss per share of $.15, compared to diluted earnings
per share of $.20 in the first quarter last year.
-- Net loss of $11.5 million, compared to net earnings of $17.8
million in the first quarter of fiscal 2007.
-- Operating cash flow of $39.1 million and negative free cash
flow available to equity of $9.8 million. The free cash flow
available to equity is a non-GAAP financial measure, and
reconciliation to the comparable GAAP measure, operating cash
flow, is attached to this press release.
Acxiom in fiscal 2008 implemented a new organizational alignment
with three operating divisions. First-quarter revenue by division was:
-- Services Division: The division develops, sells and delivers
industry-tailored solutions globally through the integration
of products, services and consulting. Revenue for the quarter
was $181.0 million, up 4 percent compared to the first quarter
a year ago.
-- Information Products Division: The division develops and sells
all global data products, including InfoBase(R) and
Personicx(R), as well as fraud and risk mitigation products
sold in the U.S., including InsightIdentify. It focuses on
product development, product lifecycle management, data
content management and innovation. Revenue for the quarter was
$96.7 million, a 2 percent increase over the same quarter last
year.
-- Infrastructure Management Division: The division develops and
delivers information technology products and services that
improve a company's ability to manage its information
technology delivery platform at lower costs and higher
efficiencies. Such offerings include traditional IT
outsourcing and transformational solutions such as the Acxiom
data factory. Revenue for the quarter was $113.5 million, down
6 percent from the same quarter last year.
First Quarter Recognition
-- Computerworld magazine again named Acxiom one of the 100 Best
Places to Work in Information Technology, the fourth time in
the last six years the company has received the honor.
Computerworld's rankings are based on a comprehensive
questionnaire that assesses companies' benefits, diversity,
career development, training programs and retention rates.
-- Wells Fargo & Company named Acxiom the winner of the "First
Choice" award as part of its Vendor Recognition Program.
Acxiom was one of four business partners that Wells Fargo's
Technology Information Group recognized during its annual
vendor summit in April.
About Acxiom Corporation
Acxiom Corporation (NASDAQ: ACXM; www.acxiom.com) integrates data,
services and technology to create and deliver customer and information
management solutions for many of the largest, most respected companies
in the world. The core components of Acxiom's innovative solutions are
Customer Data Integration (CDI) technology, data, database services,
IT outsourcing, consulting and analytics, and privacy leadership.
Founded in 1969, Acxiom is headquartered in Little Rock, Ark., with
locations throughout the United States and Europe, and in Australia,
China, and Canada. For more information, visit www.acxiom.com.
Acxiom is a registered trademark of Acxiom Corporation.
This release contains forward-looking statements that are subject
to certain risks and uncertainties that could cause actual results to
differ materially. Such statements may include but are not necessarily
limited to the following: that we expect to remain focused on
improving operating results, that we are advancing the acquisition
process with ValueAct Capital and Silver Lake and that we continue to
believe that completing the anticipated transaction is in the best
interest of Acxiom and all of its constituents. The following are
important factors, among others, that could cause actual results to
differ materially from these forward-looking statements: The
possibility that certain contracts may not be closed, or may not be
closed within the anticipated time frames; the possibility that the
anticipated transaction may not be closed, or may not be closed within
the anticipated time frames; the possibility that clients may attempt
to reduce the amount of business they do with the Company; the
possibility that in the event of a change of control of the Company
that certain of the clients of the Company would invoke certain
provisions in their contracts resulting in a decline in the revenue
and profit of the Company; the possibility that certain contracts may
not generate the anticipated revenue or profitability; the possibility
that negative changes in economic or other conditions might lead to a
reduction in demand for our products and services; the possibility of
an economic slowdown or that economic conditions in general will not
be as expected; the possibility that the historical seasonality of our
business may change; the possibility that significant customers may
experience extreme, severe economic difficulty; the possibility that
the integration of acquired businesses may not be as successful as
planned; the possibility that the fair value of certain of our assets
may not be equal to the carrying value of those assets now or in
future time periods; the possibility that sales cycles may lengthen;
the possibility that we may not be able to attract and retain
qualified technical and leadership associates, or that we may lose key
associates to other organizations; the possibility that we won't be
able to properly motivate our sales force or other associates; the
possibility that we won't be able to achieve cost reductions and avoid
unanticipated costs; the possibility that we won't be able to continue
to receive credit upon satisfactory terms and conditions; the
possibility that competent, competitive products, technologies or
services will be introduced into the marketplace by other companies;
the possibility that we may be subjected to pricing pressure due to
market conditions and/or competitive products and services; the
possibility that there will be changes in consumer or business
information industries and markets that negatively impact the Company;
the possibility that changes in accounting pronouncements may occur
and may impact these projections; the possibility that we won't be
able to protect proprietary information and technology or to obtain
necessary licenses on commercially reasonable terms; the possibility
that we may encounter difficulties when entering new markets or
industries; the possibility that there will be changes in the
legislative, accounting, regulatory and consumer environments
affecting our business, including but not limited to litigation,
legislation, regulations and customs relating to our ability to
collect, manage, aggregate and use data; the possibility that data
suppliers might withdraw data from us, leading to our inability to
provide certain products and services; the possibility that we may
enter into short-term contracts which would affect the predictability
of our revenues; the possibility that the amount of ad hoc,
volume-based and project work will not be as expected; the possibility
that we may experience a loss of data center capacity or interruption
of telecommunication links or power sources; the possibility that we
may experience failures or breaches of our network and data security
systems, leading to potential adverse publicity, negative customer
reaction, or liability to third parties; the possibility that postal
rates may increase, thereby leading to reduced volumes of business;
the possibility that our clients may cancel or modify their agreements
with us; the possibility that we will not successfully complete
customer contract requirements on time or meet the service levels
specified in the contracts, which may result in contract penalties or
lost revenue; the possibility that we experience processing errors
which result in credits to customers, re-performance of services or
payment of damages to customers; the possibility that the services of
the United States Postal Service, their global counterparts and other
delivery systems may be disrupted; and the possibility that we may be
affected by other competitive factors.
Other factors are detailed from time to time in our periodic
reports and registration statements filed with the United States
Securities and Exchange Commission. We believe that we have the
product and technology offerings, facilities, associates and
competitive and financial resources for continued business success,
but future revenues, costs, margins and profits are all influenced by
a number of factors, including those discussed above, all of which are
inherently difficult to forecast.
We undertake no obligation to update the information contained in
this press release or any other forward-looking statement.
Acxiom, InfoBase and Personicx are registered trademarks of Acxiom
Corporation.
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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
June 30,
-----------------------------------
$ %
2007 2006 Variance Variance
-------- -------- -----------------
Revenue:
Services 264,735 261,892 2,843 1.1%
Data 73,433 74,813 (1,380) (1.8%)
-------- --------
Total revenue 338,168 336,705 1,463 0.4%
Operating costs and expenses:
Cost of revenue
Services 212,086 196,073 16,013 8.2%
Data 53,885 49,572 4,313 8.7%
-------- --------
Total cost of revenue 265,971 245,645 20,326 8.3%
Services gross margin 19.9% 25.1%
Data gross margin 26.6% 33.7%
Total gross margin 21.3% 27.0%
Selling, general and
administrative 52,669 54,745 (2,076) (3.8%)
Gains, losses and other items,
net 15,390 - 15,390 100.0%
-------- --------
Total operating costs and
expenses 334,030 300,390 33,640 11.2%
-------- --------
Income from operations 4,138 36,315 (32,177) (88.6%)
-------- --------
Other income (expense):
Interest expense (13,575) (7,769) (5,806) 74.7%
Other, net 183 647 (464) (71.7%)
-------- --------
Total other income (expense) (13,392) (7,122) (6,270) 88.0%
-------- --------
Earnings (loss) before income
taxes (9,254) 29,193 (38,447) (131.7%)
Income taxes 2,267 11,385 (9,118) (80.1%)
-------- --------
Net earnings (loss) (11,521) 17,808 (29,329) (164.7%)
======== ========
Earnings (loss) per share:
Basic (0.15) 0.20 (0.35) (175.0%)
======== ========
Diluted (0.15) 0.20 (0.35) (175.0%)
======== ========
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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
-------------------------------------
June 30, March 31, $ %
2007 2007 Variance Variance
--------- --------- -----------------
Revenue:
Services 264,735 267,314 (2,579) (1.0%)
Data 73,433 89,957 (16,524) (18.4%)
--------- ---------
Total revenue 338,168 357,271 (19,103) (5.3%)
Operating costs and expenses:
Cost of revenue
Services 212,086 209,830 2,256 1.1%
Data 53,885 52,991 894 1.7%
--------- ---------
Total cost of revenue 265,971 262,821 3,150 1.2%
Services gross margin 19.9% 21.5%
Data gross margin 26.6% 41.1%
Total gross margin 21.3% 26.4%
Selling, general and
administrative 52,669 56,031 (3,362) (6.0%)
Gains, losses and other items,
net 15,390 9,122 6,268 68.7%
--------- ---------
Total operating costs and
expenses 334,030 327,974 6,056 1.8%
--------- ---------
Income from operations 4,138 29,297 (25,159) (85.9%)
--------- ---------
Other income (expense):
Interest expense (13,575) (15,002) 1,427 (9.5%)
Other, net 183 1,444 (1,261) (87.3%)
--------- ---------
Total other income (expense) (13,392) (13,558) 166 (1.2%)
--------- ---------
Earnings (loss) before income
taxes (9,254) 15,739 (24,993) (158.8%)
Income taxes 2,267 9,468 (7,201) (76.1%)
--------- ---------
Net earnings (loss) (11,521) 6,271 (17,792) (283.7%)
========= =========
Earnings (loss) per share:
Basic (0.15) 0.08 (0.23) (287.5%)
========= =========
Diluted (0.15) 0.08 (0.23) (287.5%)
========= =========
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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
---------------------------
June 30, June 30, March 31,
2007 2006 2007
-------- -------- ---------
Basic earnings per share:
Numerator - net earnings (loss) (11,521) 17,808 6,271
Denominator - weighted-average shares
outstanding 79,341 88,155 78,385
-------- -------- ---------
Basic earnings (loss) per share (0.15) 0.20 0.08
======== ======== =========
Diluted earnings per share:
Numerator - net earnings (loss) (11,521) 17,808 6,271
Denominator - weighted-average shares
outstanding 79,341 88,155 78,385
Dilutive effect of common stock options,
warrants and restricted stock - 2,268 1,750
-------- -------- ---------
79,341 90,423 80,135
-------- -------- ---------
Diluted earnings (loss) per share (0.15) 0.20 0.08
======== ======== =========
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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
--------------------------
June 30, June 30,
Revenue: 2007 2006
------------- ------------
Information services 181,045 173,685
Information products 96,678 94,968
Infrastructure management 113,520 120,491
Eliminations (53,075) (52,439)
------------- ------------
Total revenue 338,168 336,705
============= ============
Income from operations:
Information services 24,267 29,290
Information products (5,684) (830)
Infrastructure management 12,136 14,094
Corporate & other (26,581) (6,239)
------------- ------------
Total income from operations 4,138 36,315
============= ============
Margin:
Information services 13.4% 16.9%
Information products -5.9% -0.9%
Infrastructure management 10.7% 11.7%
Total margin 1.2% 10.8%
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ACXIOM CORPORATION AND SUBSIDIARIES
DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
------------------------------------
June 30, June 30, $ %
2007 2006 Variance Variance
-------- -------- ------------------
Data 53,841 54,530 (689) (1.3%)
Passthrough data 19,592 20,283 (691) (3.4%)
-------- --------
Total data revenue 73,433 74,813 (1,380) (1.8%)
======== ========
Cost of data revenue:
Data 34,293 29,289 5,004 17.1%
Passthrough data 19,592 20,283 (691) (3.4%)
-------- --------
Total cost of data 53,885 49,572 4,313 8.7%
======== ========
Margin:
Data 36.3% 46.3%
Passthrough data 0.0% 0.0%
Total data 26.6% 33.7%
For the Three Months Ended
-----------------------------
March 31, $ %
2007 Variance Variance
--------- -----------------
Data 69,596 (15,755) (22.6%)
Passthrough data 20,361 (769) (3.8%)
---------
Total data revenue 89,957 (16,524) (18.4%)
=========
Cost of data revenue:
Data 32,630 1,663 5.1%
Passthrough data 20,361 (769) (3.8%)
---------
Total cost of data 52,991 894 1.7%
=========
Margin:
Data 53.1%
Passthrough data 0.0%
Total data 41.1%
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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
June 30, March 31, $ %
2007 2007 Variance Variance
---------- ---------- -----------------
Assets
-------------------------------
Current assets:
Cash and cash equivalents 61,379 37,776 23,603 62.5%
Trade accounts receivable,
net 280,956 285,850 (4,894) (1.7%)
Refundable income taxes 8,374 7,657 717 9.4%
Deferred income taxes 22,318 22,341 (23) (0.1%)
Other current assets 56,114 59,252 (3,138) (5.3%)
---------- ----------
Total current assets 429,141 412,876 16,265 3.9%
---------- ----------
Property and equipment 748,957 733,175 15,782 2.2%
Less - accumulated
depreciation and
amortization 446,464 420,883 25,581 6.1%
---------- ----------
Property and equipment, net 302,493 312,292 (9,799) (3.1%)
---------- ----------
Software, net of accumulated
amortization 50,533 44,289 6,244 14.1%
Goodwill 522,279 522,046 233 0.0%
Purchased software licenses,
net of accumulated
amortization 145,368 151,326 (5,958) (3.9%)
Unbilled and notes receivable,
excluding current portions 14,479 16,742 (2,263) (13.5%)
Deferred costs, net 136,184 137,684 (1,500) (1.1%)
Data acquisition costs 36,672 35,398 1,274 3.6%
Other assets, net 23,248 23,251 (3) (0.0%)
---------- ----------
1,660,397 1,655,904 4,493 0.3%
========== ==========
Liabilities and Stockholders'
Equity
-------------------------------
Current liabilities:
Current installments of long-
term obligations 104,341 106,921 (2,580) (2.4%)
Trade accounts payable 62,034 54,808 7,226 13.2%
Accrued payroll and related
expenses 26,562 33,663 (7,101) (21.1%)
Other accrued expenses 77,474 79,078 (1,604) (2.0%)
Deferred revenue 102,589 113,318 (10,729) (9.5%)
---------- ----------
Total current liabilities 373,000 387,788 (14,788) (3.8%)
---------- ----------
Long-term obligations:
Long-term debt and capital
leases, net of current
installments 622,950 631,184 (8,234) (1.3%)
Software and data licenses,
net of current installments 12,290 17,695 (5,405) (30.5%)
---------- ----------
Total long-term obligations 635,240 648,879 (13,639) (2.1%)
---------- ----------
Deferred income taxes 96,726 97,926 (1,200) (1.2%)
Commitments and contingencies
Stockholders' equity:
Common stock 11,331 11,145 186 1.7%
Additional paid-in capital 760,952 718,336 42,616 5.9%
Retained earnings 451,323 462,844 (11,521) (2.5%)
Accumulated other
comprehensive income 20,365 17,526 2,839 16.2%
Treasury stock, at cost (688,540) (688,540) 0 0.0%
---------- ----------
Total stockholders' equity 555,431 521,311 34,120 6.5%
---------- ----------
1,660,397 1,655,904 4,493 0.3%
========== ==========
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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three
Months Ended
June 30,
-----------------
2007 2006
-----------------
Cash flows from operating activities:
Net earnings (11,521) 17,808
Non-cash operating activities:
Depreciation and amortization 59,102 59,047
Loss (gain) on disposal or impairment of assets,
net 310 (84)
Deferred income taxes (1,226) (233)
Non-cash stock compensation expense 1,358 553
Changes in operating assets and liabilities:
Accounts receivable 7,721 (1,796)
Other assets (792) 3,186
Accounts payable and other liabilities (3,097) (9,743)
Deferred revenue (12,723) (12,388)
-------- --------
Net cash provided by operating activities 39,132 56,350
-------- --------
Cash flows from investing activities:
Capitalized software (8,447) (5,719)
Capital expenditures (2,867) (217)
Cash collected from the sale and license of
software - 5,000
Deferral of costs (14,129) (16,887)
Payments received from investments - 783
Net cash paid in acquisitions (2,680) -
-------- --------
Net cash used by investing activities (28,123) (17,040)
-------- --------
Cash flows from financing activities:
Proceeds from debt 2,127 28,873
Payments of debt (31,283) (67,866)
Sale of common stock 35,820 6,773
Acquisition of treasury stock - (11,965)
Tax benefit of stock options exercised 5,624 1,079
-------- --------
Net cash used by financing activities 12,288 (43,106)
-------- --------
Effect of exchange rate changes on cash 307 254
-------- --------
Net increase (decrease) in cash and cash
equivalents 23,604 (3,542)
Cash and cash equivalents at beginning of period 37,776 7,705
-------- --------
Cash and cash equivalents at end of period 61,380 4,163
======== ========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 13,888 7,830
Income taxes 115 5,268
Payments on capital leases and installment
payment arrangements 19,137 18,905
Payments on software and data license
liabilities 6,493 7,847
Other debt payments, excluding line of credit 3,526 1,711
Revolving credit payments 2,127 39,403
Noncash investing and financing activities:
Acquisition of property and equipment under
capital lease
and installment payment arrangements 7,222 19,426
Construction and other financing 5,351 5,904
Software licenses and maintenance acquired
under software obligation - 15,266
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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
---------------------------------------------- --------
06/30/06 09/30/06 12/31/06 03/31/07 YTD FY2007 06/30/07
---------------------------------------------- --------
Net cash
provided by
operating
activities 56,350 64,409 62,659 76,534 259,952 39,132
Plus:
Payments
received
from
investments 783 1,925 - 50 2,758 -
Less:
Capitalized
software (5,719) (6,926) (6,798) (8,000) (27,443) (8,447)
Capital
expenditures (217) (3,260) (2,518) (8,230) (14,225) (2,867)
Deferral of
costs (16,887) (16,559) (16,149) (17,092) (66,687) (14,129)
Payments on
capital
leases and
installment
payment
arrangements (18,905) (21,951) (16,700) (18,579) (76,135) (19,137)
Payments on
software and
data license
liabilities (7,847) (7,304) (6,000) (5,746) (26,897) (6,493)
Other
required
debt
payments (1,711) (1,804) (3,117) (3,603) (10,235) (3,526)
---------------------------------------------- --------
Subtotal 5,847 8,530 11,377 15,334 41,088 (15,467)
Plus:
Tax benefit
of stock
options and
warrants 1,079 1,765 1,237 61 4,142 5,624
---------------------------------------------- --------
Subtotal 6,926 10,295 12,614 15,395 45,230 (9,843)
Plus:
Cash
collected
from sale of
software 5,000 5,000 - - 10,000 -
---------------------------------------------- --------
Total 11,926 15,295 12,614 15,395 55,230 (9,843)
============================================== ========
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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
--------------------------------------------------
06/30/06 09/30/06 12/31/06 03/31/07 FY2007
--------------------------------------------------
Revenue:
Services 261,892 266,099 265,798 267,314 1,061,103
Data 74,813 82,220 87,043 89,957 334,033
--------------------------------------------------
Total revenue 336,705 348,319 352,841 357,271 1,395,136
Operating costs and
expenses:
Cost of revenue
Services 196,073 201,384 199,704 209,830 806,991
Data 49,572 51,062 53,004 52,991 206,629
--------------------------------------------------
Total cost of
revenue 245,645 252,446 252,708 262,821 1,013,620
Selling, general
and
administrative 54,745 54,008 49,065 56,031 213,849
Gains, losses and
other items, net 0 0 (225) 9,122 8,897
--------------------------------------------------
Total operating
costs and
expenses 300,390 306,454 301,548 327,974 1,236,366
Income from
operations 36,315 41,865 51,293 29,297 158,770
% Margin 10.8% 12.0% 14.5% 8.2% 11.4%
Other income
(expense)
Interest expense (7,769) (8,950) (14,911) (15,002) (46,632)
Other, net 647 2,685 1,157 1,444 5,933
--------------------------------------------------
Total other income
(expense) (7,122) (6,265) (13,754) (13,558) (40,699)
Earnings (loss)
before income
taxes 29,193 35,600 37,539 15,739 118,071
Income taxes 11,385 13,884 12,594 9,468 47,331
--------------------------------------------------
Net earnings
(loss) 17,808 21,716 24,945 6,271 70,740
==================================================
Diluted
earnings
(loss) per
share 0.20 0.25 0.31 0.08 0.84
==================================================
Q1 FY07 to Q1 Q4 FY07 to Q1
FY08 FY08
--------- ---------------- ----------------
06/30/07 % $ % $
-------------------------- ----------------
Revenue:
Services 264,735 1.1% 2,843 -1.0% (2,579)
Data 73,433 -1.8% (1,380) -18.4% (16,524)
-------------------------- ----------------
Total revenue 338,168 0.4% 1,463 -5.3% (19,103)
Operating costs and
expenses:
Cost of revenue
Services 212,086 8.2% 16,013 1.1% 2,256
Data 53,885 8.7% 4,313 1.7% 894
-------------------------- ----------------
Total cost of revenue 265,971 8.3% 20,326 1.2% 3,150
Selling, general and
administrative 52,669 -3.8% (2,076) -6.0% (3,362)
Gains, losses and other
items, net 15,390 - 15,390 68.7% 6,268
-------------------------- ----------------
Total operating costs
and expenses 334,030 11.2% 33,640 1.8% 6,056
Income from operations 4,138 -88.6% (32,177) -85.9% (25,159)
% Margin 1.2%
Other income (expense)
Interest expense (13,575) 74.7% (5,806) -9.5% 1,427
Other, net 183 -71.7% (464) -87.3% (1,261)
-------------------------- ----------------
Total other income
(expense) (13,392) 88.0% (6,270) -1.2% 166
Earnings (loss) before
income taxes (9,254) -131.7% (38,447) -158.8% (24,993)
Income taxes 2,267 -80.1% (9,118) -76.1% (7,201)
-------------------------- ----------------
Net earnings (loss) (11,521) -164.7% (29,329) -283.7% (17,792)
========================== ================
Diluted earnings
(loss) per share (0.15) -175.0% (0.35) -287.5% (0.23)
========================== ================
*T
-0-
*T
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - INTERNAL FORMAT
(Unaudited)
(Dollars in thousands, except earnings per share)
--------------------------------------------------
06/30/06 09/30/06 12/31/06 03/31/07 FY2007
--------------------------------------------------
Revenue 336,705 348,319 352,841 357,271 1,395,136
Operating costs and
expenses:
Salaries and
benefits 135,917 139,557 139,724 154,801 569,999
Computer,
communications
and other
equipment 73,119 72,685 71,132 73,409 290,345
Data costs 43,372 44,196 43,761 42,569 173,898
Other operating
costs and
expenses 47,982 50,016 47,156 48,071 193,225
Gains, losses and
other items, net - - (225) 9,122 8,897
--------------------------------------------------
Total operating
costs and
expenses 300,390 306,454 301,548 327,972 1,236,364
--------------------------------------------------
Income from
operations 36,315 41,865 51,293 29,299 158,772
--------------------------------------------------
Operating Margin 10.8% 12.0% 14.5% 8.2% 11.4%
Other income
(expense):
Interest expense (7,769) (8,950) (14,911) (15,002) (46,632)
Other, net 647 2,685 1,157 1,444 5,933
--------------------------------------------------
Total other income
(expense) (7,122) (6,265) (13,754) (13,558) (40,699)
--------------------------------------------------
Earnings (loss)
before income taxes 29,193 35,600 37,539 15,741 118,073
--------------------------------------------------
Income taxes 11,385 13,884 12,594 9,468 47,331
--------------------------------------------------
Net earnings (loss) 17,808 21,716 24,945 6,273 70,742
==================================================
Diluted earnings
(loss) per
share 0.20 0.25 0.31 0.08 0.84
==================================================
Q1 FY07 to Q1 Q4 FY07 to Q1
FY08 FY08
-------- ---------------- ----------------
06/30/07 % $ % $
-------- ---------------- ----------------
Revenue 338,168 0.4% 1,463 -5.3% (19,103)
Operating costs and
expenses:
Salaries and benefits 148,739 9.4% 12,822 -3.9% (6,062)
Computer, communications
and other equipment 72,444 -0.9% (675) -1.3% (965)
Data costs 42,518 -2.0% (854) -0.1% (51)
Other operating costs and
expenses 54,939 14.5% 6,957 14.3% 6,868
Gains, losses and other
items, net 15,390 - 15,390 68.7% 6,268
-------- ---------------- ----------------
Total operating costs
and expenses 334,030 11.2% 33,640 1.8% 6,058
-------- ---------------- ----------------
Income from operations 4,138 -88.6% (32,177) -85.9% (25,161)
-------- ---------------- ----------------
Operating Margin 1.2%
Other income (expense):
Interest expense (13,575) 74.7% (5,806) -9.5% 1,427
Other, net 183 -71.7% (464) -87.3% (1,261)
-------- ---------------- ----------------
Total other income
(expense) (13,392) 88.0% (6,270) -1.2% 166
-------- ---------------- ----------------
Earnings (loss) before
income taxes (9,254) -131.7% (38,447) -158.8% (24,995)
-------- ---------------- ----------------
Income taxes 2,267 -80.1% (9,118) -76.1% (7,201)
-------- ---------------- ----------------
Net earnings (loss) (11,521) -164.7% (29,329) -283.7% (17,794)
======== ================ ================
Diluted earnings (loss)
per share (0.15) -175.0% (0.35) -287.5% (0.23)
======== ================ ================
*T
-0-
*T
ACXIOM CORPORATION AND SUBSIDIARIES
MARGIN ANALYSIS
(Unaudited)
--------------------------------------------
06/30/06 09/30/06 12/31/06 03/31/07 FY2007
--------------------------------------------
Gross profit 91,060 95,873 100,133 94,450 381,516
Gross margin 27.0% 27.5% 28.4% 26.4% 27.3%
Operating margin 10.8% 12.0% 14.5% 8.2% 11.4%
Services gross profit 65,819 64,715 66,094 57,484 254,112
Services gross margin 25.1% 24.3% 24.9% 21.5% 23.9%
Data gross profit 25,241 31,158 34,039 36,966 127,404
Data gross margin 33.7% 37.9% 39.1% 41.1% 38.1%
Q1 FY07 to Q1 Q4 FY07 to Q1
FY08 FY08
--------- ----------------- ----------------
06/30/07 % $ % $
--------- ----------------- ----------------
Gross profit 72,197 -20.7% (18,863) -23.6% (22,253)
Gross margin 21.3%
Operating margin 1.2%
Services gross profit 52,649 -20.0% (13,170) -8.4% (4,835)
Services gross margin 19.9%
Data gross profit 19,548 -22.6% (5,693) -47.1% (17,418)
Data gross margin 26.6%
*T
-0-
*T
ACXIOM CORPORATION AND SUBSIDIARIES
EXPENSE TREND ANALYSIS
(Unaudited)
-------------------------------------------- --------
06/30/06 09/30/06 12/31/06 03/31/07 FY2007 06/30/07
-------------------------------------------- --------
Salaries and
benefits % of
revenue 40.4% 40.1% 39.6% 43.3% 40.9% 44.0%
Computer,
communications
and other
equipment % of
revenue 21.7% 20.9% 20.2% 20.5% 20.8% 21.4%
Data costs % of
revenue 12.9% 12.7% 12.4% 11.9% 12.5% 12.6%
Other operating
costs and
expenses % of
revenue 14.3% 14.4% 13.4% 13.5% 13.8% 16.2%
Total operating
costs and
expenses % of
revenue 89.2% 88.0% 85.5% 91.8% 88.6% 98.8%
SG&A % of revenue 16.3% 15.5% 13.9% 15.7% 15.3% 15.6%
*T
Acxiom® Corporation
(NASDAQ: ACXM) today announced financial results for the first quarter
of fiscal 2008 ended June 30, 2007. Revenue for the three-month period
was $338.2 million, an increase of 0.4 percent over $336.7 million for
the comparable prior-year period. Income from operations for the
three-month period equaled $4.1 million compared to $36.3 million for
the quarter ended June 30, 2006. The diluted loss per share of $.15
includes the impact of $20.6 million, or 24 cents per diluted share, in
unusual expense items, net of income tax effect, in the quarter detailed
below.
Charles D. Morgan, Acxiom’s company leader and
chairman of the board stated, “We remain
focused on operating results while we advance the acquisition process
with Silver Lake and ValueAct Capital. We continue to believe that
successfully completing this deal is in the best interests of Acxiom and
its constituents.”
Details of Acxiom’s first-quarter performance
include:
Revenue of $338.2 million, up 0.4 percent from $336.7 million in the
first quarter a year ago.
Income from operations of $4.1 million, an 88.6 percent decrease
compared to $36.3 million in the first quarter last year.
Unusual items that added $20.6 million in expenses in the quarter.
Included were costs related to the pending transaction with Silver
Lake and ValueAct Capital of $15.1 million, which are non-deductible
for tax purposes, and $5.5 million predominantly related to the
write-off of certain long-term assets related to an amended contract
with an information technology outsourcing client. These expenses
reduced first-quarter diluted earnings per share by $.24.
Diluted loss per share of $.15, compared to diluted earnings per share
of $.20 in the first quarter last year.
Net loss of $11.5 million, compared to net earnings of $17.8 million
in the first quarter of fiscal 2007.
Operating cash flow of $39.1 million and negative free cash flow
available to equity of $9.8 million. The free cash flow available to
equity is a non-GAAP financial measure, and reconciliation to the
comparable GAAP measure, operating cash flow, is attached to this
press release.
Acxiom in fiscal 2008 implemented a new organizational alignment with
three operating divisions. First-quarter revenue by division was:
Services Division: The division develops, sells and delivers
industry-tailored solutions globally through the integration of
products, services and consulting. Revenue for the quarter was $181.0
million, up 4 percent compared to the first quarter a year ago.
Information Products Division: The division develops and sells
all global data products, including InfoBase®
and Personicx®, as
well as fraud and risk mitigation products sold in the U.S., including
InsightIdentify. It focuses on product development, product lifecycle
management, data content management and innovation. Revenue for the
quarter was $96.7 million, a 2 percent increase over the same quarter
last year.
Infrastructure Management Division: The division develops and
delivers information technology products and services that improve a
company’s ability to manage its information
technology delivery platform at lower costs and higher efficiencies.
Such offerings include traditional IT outsourcing and transformational
solutions such as the Acxiom data factory. Revenue for the quarter was
$113.5 million, down 6 percent from the same quarter last year.
First Quarter Recognition
Computerworld magazine again named Acxiom one of the 100 Best Places
to Work in Information Technology, the fourth time in the last six
years the company has received the honor. Computerworld's rankings are
based on a comprehensive questionnaire that assesses companies'
benefits, diversity, career development, training programs and
retention rates.
Wells Fargo & Company named Acxiom the winner of the "First Choice"
award as part of its Vendor Recognition Program. Acxiom was one of
four business partners that Wells Fargo's Technology Information Group
recognized during its annual vendor summit in April.
About Acxiom Corporation
Acxiom Corporation (NASDAQ: ACXM; www.acxiom.com)
integrates data, services and technology to create and deliver customer
and information management solutions for many of the largest, most
respected companies in the world. The core components of Acxiom's
innovative solutions are Customer Data Integration (CDI) technology,
data, database services, IT outsourcing, consulting and analytics, and
privacy leadership. Founded in 1969, Acxiom is headquartered in Little
Rock, Ark., with locations throughout the United States and Europe, and
in Australia, China, and Canada. For more information, visit www.acxiom.com.
Acxiom is a registered trademark of Acxiom Corporation.
This release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to
differ materially. Such statements may include but are not necessarily
limited to the following: that we expect to remain focused on improving
operating results, that we are advancing the acquisition process with
ValueAct Capital and Silver Lake and that we continue to believe that
completing the anticipated transaction is in the best interest of Acxiom
and all of its constituents. The following are important factors, among
others, that could cause actual results to differ materially from these
forward-looking statements: The possibility that certain contracts may
not be closed, or may not be closed within the anticipated time frames;
the possibility that the anticipated transaction may not be closed, or
may not be closed within the anticipated time frames; the possibility
that clients may attempt to reduce the amount of business they do with
the Company; the possibility that in the event of a change of control of
the Company that certain of the clients of the Company would invoke
certain provisions in their contracts resulting in a decline in the
revenue and profit of the Company; the possibility that certain
contracts may not generate the anticipated revenue or profitability; the
possibility that negative changes in economic or other conditions might
lead to a reduction in demand for our products and services; the
possibility of an economic slowdown or that economic conditions in
general will not be as expected; the possibility that the historical
seasonality of our business may change; the possibility that significant
customers may experience extreme, severe economic difficulty; the
possibility that the integration of acquired businesses may not be as
successful as planned; the possibility that the fair value of certain of
our assets may not be equal to the carrying value of those assets now or
in future time periods; the possibility that sales cycles may lengthen;
the possibility that we may not be able to attract and retain qualified
technical and leadership associates, or that we may lose key associates
to other organizations; the possibility that we won’t
be able to properly motivate our sales force or other associates; the
possibility that we won’t be able to achieve
cost reductions and avoid unanticipated costs; the possibility that we
won’t be able to continue to receive credit
upon satisfactory terms and conditions; the possibility that competent,
competitive products, technologies or services will be introduced into
the marketplace by other companies; the possibility that we may be
subjected to pricing pressure due to market conditions and/or
competitive products and services; the possibility that there will be
changes in consumer or business information industries and markets that
negatively impact the Company; the possibility that changes in
accounting pronouncements may occur and may impact these projections;
the possibility that we won’t be able to
protect proprietary information and technology or to obtain necessary
licenses on commercially reasonable terms; the possibility that we may
encounter difficulties when entering new markets or industries; the
possibility that there will be changes in the legislative, accounting,
regulatory and consumer environments affecting our business, including
but not limited to litigation, legislation, regulations and customs
relating to our ability to collect, manage, aggregate and use data; the
possibility that data suppliers might withdraw data from us, leading to
our inability to provide certain products and services; the possibility
that we may enter into short-term contracts which would affect the
predictability of our revenues; the possibility that the amount of ad
hoc, volume-based and project work will not be as expected; the
possibility that we may experience a loss of data center capacity or
interruption of telecommunication links or power sources; the
possibility that we may experience failures or breaches of our network
and data security systems, leading to potential adverse publicity,
negative customer reaction, or liability to third parties; the
possibility that postal rates may increase, thereby leading to reduced
volumes of business; the possibility that our clients may cancel or
modify their agreements with us; the possibility that we will not
successfully complete customer contract requirements on time or meet the
service levels specified in the contracts, which may result in contract
penalties or lost revenue; the possibility that we experience processing
errors which result in credits to customers, re-performance of services
or payment of damages to customers; the possibility that the services of
the United States Postal Service, their global counterparts and other
delivery systems may be disrupted; and the possibility that we may be
affected by other competitive factors.
Other factors are detailed from time to time in our periodic reports and
registration statements filed with the United States Securities and
Exchange Commission. We believe that we have the product and technology
offerings, facilities, associates and competitive and financial
resources for continued business success, but future revenues, costs,
margins and profits are all influenced by a number of factors, including
those discussed above, all of which are inherently difficult to forecast.
We undertake no obligation to update the information contained in this
press release or any other forward-looking statement.
Acxiom, InfoBase and Personicx are registered trademarks of Acxiom
Corporation.
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
June 30,
$
%
2007
2006
Variance
Variance
Revenue:
Services
264,735
261,892
2,843
1.1
%
Data
73,433
74,813
(1,380
)
(1.8
%)
Total revenue
338,168
336,705
1,463
0.4
%
Operating costs and expenses:
Cost of revenue
Services
212,086
196,073
16,013
8.2
%
Data
53,885
49,572
4,313
8.7
%
Total cost of revenue
265,971
245,645
20,326
8.3
%
Services gross margin
19.9
%
25.1
%
Data gross margin
26.6
%
33.7
%
Total gross margin
21.3
%
27.0
%
Selling, general and administrative
52,669
54,745
(2,076
)
(3.8
%)
Gains, losses and other items, net
15,390
-
15,390
100.0
%
Total operating costs and expenses
334,030
300,390
33,640
11.2
%
Income from operations
4,138
36,315
(32,177
)
(88.6
%)
Other income (expense):
Interest expense
(13,575
)
(7,769
)
(5,806
)
74.7
%
Other, net
183
647
(464
)
(71.7
%)
Total other income (expense)
(13,392
)
(7,122
)
(6,270
)
88.0
%
Earnings (loss) before income taxes
(9,254
)
29,193
(38,447
)
(131.7
%)
Income taxes
2,267
11,385
(9,118
)
(80.1
%)
Net earnings (loss)
(11,521
)
17,808
(29,329
)
(164.7
%)
Earnings (loss) per share:
Basic
(0.15
)
0.20
(0.35
)
(175.0
%)
Diluted
(0.15
)
0.20
(0.35
)
(175.0
%)
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
June 30,
March 31,
$
%
2007
2007
Variance
Variance
Revenue:
Services
264,735
267,314
(2,579
)
(1.0
%)
Data
73,433
89,957
(16,524
)
(18.4
%)
Total revenue
338,168
357,271
(19,103
)
(5.3
%)
Operating costs and expenses:
Cost of revenue
Services
212,086
209,830
2,256
1.1
%
Data
53,885
52,991
894
1.7
%
Total cost of revenue
265,971
262,821
3,150
1.2
%
Services gross margin
19.9
%
21.5
%
Data gross margin
26.6
%
41.1
%
Total gross margin
21.3
%
26.4
%
Selling, general and administrative
52,669
56,031
(3,362
)
(6.0
%)
Gains, losses and other items, net
15,390
9,122
6,268
68.7
%
Total operating costs and expenses
334,030
327,974
6,056
1.8
%
Income from operations
4,138
29,297
(25,159
)
(85.9
%)
Other income (expense):
Interest expense
(13,575
)
(15,002
)
1,427
(9.5
%)
Other, net
183
1,444
(1,261
)
(87.3
%)
Total other income (expense)
(13,392
)
(13,558
)
166
(1.2
%)
Earnings (loss) before income taxes
(9,254
)
15,739
(24,993
)
(158.8
%)
Income taxes
2,267
9,468
(7,201
)
(76.1
%)
Net earnings (loss)
(11,521
)
6,271
(17,792
)
(283.7
%)
Earnings (loss) per share:
Basic
(0.15
)
0.08
(0.23
)
(287.5
%)
Diluted
(0.15
)
0.08
(0.23
)
(287.5
%)
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
June 30,
June 30,
March 31,
2007
2006
2007
Basic earnings per share:
Numerator - net earnings (loss)
(11,521
)
17,808
6,271
Denominator - weighted-average shares outstanding
79,341
88,155
78,385
Basic earnings (loss) per share
(0.15
)
0.20
0.08
Diluted earnings per share:
Numerator - net earnings (loss)
(11,521
)
17,808
6,271
Denominator - weighted-average shares outstanding
79,341
88,155
78,385
Dilutive effect of common stock options, warrants and restricted
stock
-
2,268
1,750
79,341
90,423
80,135
Diluted earnings (loss) per share
(0.15
)
0.20
0.08
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
June 30,
June 30,
Revenue:
2007
2006
Information services
181,045
173,685
Information products
96,678
94,968
Infrastructure management
113,520
120,491
Eliminations
(53,075
)
(52,439
)
Total revenue
338,168
336,705
Income from operations:
Information services
24,267
29,290
Information products
(5,684
)
(830
)
Infrastructure management
12,136
14,094
Corporate & other
(26,581
)
(6,239
)
Total income from operations
4,138
36,315
Margin:
Information services
13.4
%
16.9
%
Information products
-5.9
%
-0.9
%
Infrastructure management
10.7
%
11.7
%
Total margin
1.2
%
10.8
%
ACXIOM CORPORATION AND SUBSIDIARIES
DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
June 30,
June 30,
$
%
March 31,
$
%
2007
2006
Variance
Variance
2007
Variance
Variance
Data
53,841
54,530
(689
)
(1.3
%)
69,596
(15,755
)
(22.6
%)
Passthrough data
19,592
20,283
(691
)
(3.4
%)
20,361
(769
)
(3.8
%)
Total data revenue
73,433
74,813
(1,380
)
(1.8
%)
89,957
(16,524
)
(18.4
%)
Cost of data revenue:
Data
34,293
29,289
5,004
17.1
%
32,630
1,663
5.1
%
Passthrough data
19,592
20,283
(691
)
(3.4
%)
20,361
(769
)
(3.8
%)
Total cost of data
53,885
49,572
4,313
8.7
%
52,991
894
1.7
%
Margin:
Data
36.3
%
46.3
%
53.1
%
Passthrough data
0.0
%
0.0
%
0.0
%
Total data
26.6
%
33.7
%
41.1
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
June 30,
March 31,
$
%
2007
2007
Variance
Variance
Assets
Current assets:
Cash and cash equivalents
61,379
37,776
23,603
62.5
%
Trade accounts receivable, net
280,956
285,850
(4,894
)
(1.7
%)
Refundable income taxes
8,374
7,657
717
9.4
%
Deferred income taxes
22,318
22,341
(23
)
(0.1
%)
Other current assets
56,114
59,252
(3,138
)
(5.3
%)
Total current assets
429,141
412,876
16,265
3.9
%
Property and equipment
748,957
733,175
15,782
2.2
%
Less - accumulated depreciation and amortization
446,464
420,883
25,581
6.1
%
Property and equipment, net
302,493
312,292
(9,799
)
(3.1
%)
Software, net of accumulated amortization
50,533
44,289
6,244
14.1
%
Goodwill
522,279
522,046
233
0.0
%
Purchased software licenses, net of accumulated amortization
145,368
151,326
(5,958
)
(3.9
%)
Unbilled and notes receivable, excluding current portions
14,479
16,742
(2,263
)
(13.5
%)
Deferred costs, net
136,184
137,684
(1,500
)
(1.1
%)
Data acquisition costs
36,672
35,398
1,274
3.6
%
Other assets, net
23,248
23,251
(3
)
(0.0
%)
1,660,397
1,655,904
4,493
0.3
%
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term obligations
104,341
106,921
(2,580
)
(2.4
%)
Trade accounts payable
62,034
54,808
7,226
13.2
%
Accrued payroll and related expenses
26,562
33,663
(7,101
)
(21.1
%)
Other accrued expenses
77,474
79,078
(1,604
)
(2.0
%)
Deferred revenue
102,589
113,318
(10,729
)
(9.5
%)
Total current liabilities
373,000
387,788
(14,788
)
(3.8
%)
Long-term obligations:
Long-term debt and capital leases, net of current installments
622,950
631,184
(8,234
)
(1.3
%)
Software and data licenses, net of current installments
12,290
17,695
(5,405
)
(30.5
%)
Total long-term obligations
635,240
648,879
(13,639
)
(2.1
%)
Deferred income taxes
96,726
97,926
(1,200
)
(1.2
%)
Commitments and contingencies
Stockholders' equity:
Common stock
11,331
11,145
186
1.7
%
Additional paid-in capital
760,952
718,336
42,616
5.9
%
Retained earnings
451,323
462,844
(11,521
)
(2.5
%)
Accumulated other comprehensive income
20,365
17,526
2,839
16.2
%
Treasury stock, at cost
(688,540
)
(688,540
)
0
0.0
%
Total stockholders' equity
555,431
521,311
34,120
6.5
%
1,660,397
1,655,904
4,493
0.3
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
June 30,
2007
2006
Cash flows from operating activities:
Net earnings
(11,521
)
17,808
Non-cash operating activities:
Depreciation and amortization
59,102
59,047
Loss (gain) on disposal or impairment of assets, net
310
(84
)
Deferred income taxes
(1,226
)
(233
)
Non-cash stock compensation expense
1,358
553
Changes in operating assets and liabilities:
Accounts receivable
7,721
(1,796
)
Other assets
(792
)
3,186
Accounts payable and other liabilities
(3,097
)
(9,743
)
Deferred revenue
(12,723
)
(12,388
)
Net cash provided by operating activities
39,132
56,350
Cash flows from investing activities:
Capitalized software
(8,447
)
(5,719
)
Capital expenditures
(2,867
)
(217
)
Cash collected from the sale and license of software
-
5,000
Deferral of costs
(14,129
)
(16,887
)
Payments received from investments
-
783
Net cash paid in acquisitions
(2,680
)
-
Net cash used by investing activities
(28,123
)
(17,040
)
Cash flows from financing activities:
Proceeds from debt
2,127
28,873
Payments of debt
(31,283
)
(67,866
)
Sale of common stock
35,820
6,773
Acquisition of treasury stock
-
(11,965
)
Tax benefit of stock options exercised
5,624
1,079
Net cash used by financing activities
12,288
(43,106
)
Effect of exchange rate changes on cash
307
254
Net increase (decrease) in cash and cash equivalents
23,604
(3,542
)
Cash and cash equivalents at beginning of period
37,776
7,705
Cash and cash equivalents at end of period
61,380
4,163
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest
13,888
7,830
Income taxes
115
5,268
Payments on capital leases and installment payment arrangements
19,137
18,905
Payments on software and data license liabilities
6,493
7,847
Other debt payments, excluding line of credit
3,526
1,711
Revolving credit payments
2,127
39,403
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements
7,222
19,426
Construction and other financing
5,351
5,904
Software licenses and maintenance acquired under software obligation
-
15,266
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
06/30/06
09/30/06
12/31/06
03/31/07
YTD FY2007
06/30/07
Net cash provided by operating activities
56,350
64,409
62,659
76,534
259,952
39,132
Plus:
Payments received from investments
783
1,925
-
50
2,758
-
Less:
Capitalized software
(5,719
)
(6,926
)
(6,798
)
(8,000
)
(27,443
)
(8,447
)
Capital expenditures
(217
)
(3,260
)
(2,518
)
(8,230
)
(14,225
)
(2,867
)
Deferral of costs
(16,887
)
(16,559
)
(16,149
)
(17,092
)
(66,687
)
(14,129
)
Payments on capital leases and installment payment arrangements
(18,905
)
(21,951
)
(16,700
)
(18,579
)
(76,135
)
(19,137
)
Payments on software and data license liabilities
(7,847
)
(7,304
)
(6,000
)
(5,746
)
(26,897
)
(6,493
)
Other required debt payments
(1,711
)
(1,804
)
(3,117
)
(3,603
)
(10,235
)
(3,526
)
Subtotal
5,847
8,530
11,377
15,334
41,088
(15,467
)
Plus:
Tax benefit of stock options and warrants
1,079
1,765
1,237
61
4,142
5,624
Subtotal
6,926
10,295
12,614
15,395
45,230
(9,843
)
Plus:
Cash collected from sale of software
5,000
5,000
-
-
10,000
-
Total
11,926
15,295
12,614
15,395
55,230
(9,843
)
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
Q1 FY07 to Q1 FY08
Q4 FY07 to Q1 FY08
06/30/06
09/30/06
12/31/06
03/31/07
FY2007
06/30/07
%
$
%
$
Revenue:
Services
261,892
266,099
265,798
267,314
1,061,103
264,735
1.1
%
2,843
-1.0
%
(2,579
)
Data
74,813
82,220
87,043
89,957
334,033
73,433
-1.8
%
(1,380
)
-18.4
%
(16,524
)
Total revenue
336,705
348,319
352,841
357,271
1,395,136
338,168
0.4
%
1,463
-5.3
%
(19,103
)
Operating costs and expenses:
Cost of revenue
Services
196,073
201,384
199,704
209,830
806,991
212,086
8.2
%
16,013
1.1
%
2,256
Data
49,572
51,062
53,004
52,991
206,629
53,885
8.7
%
4,313
1.7
%
894
Total cost of revenue
245,645
252,446
252,708
262,821
1,013,620
265,971
8.3
%
20,326
1.2
%
3,150
Selling, general and administrative
54,745
54,008
49,065
56,031
213,849
52,669
-3.8
%
(2,076
)
-6.0
%
(3,362
)
Gains, losses and other items, net
0
0
(225
)
9,122
8,897
15,390
-
15,390
68.7
%
6,268
Total operating costs and expenses
300,390
306,454
301,548
327,974
1,236,366
334,030
11.2
%
33,640
1.8
%
6,056
Income from operations
36,315
41,865
51,293
29,297
158,770
4,138
-88.6
%
(32,177
)
-85.9
%
(25,159
)
% Margin
10.8
%
12.0
%
14.5
%
8.2
%
11.4
%
1.2
%
Other income (expense)
Interest expense
(7,769
)
(8,950
)
(14,911
)
(15,002
)
(46,632
)
(13,575
)
74.7
%
(5,806
)
-9.5
%
1,427
Other, net
647
2,685
1,157
1,444
5,933
183
-71.7
%
(464
)
-87.3
%
(1,261
)
Total other income (expense)
(7,122
)
(6,265
)
(13,754
)
(13,558
)
(40,699
)
(13,392
)
88.0
%
(6,270
)
-1.2
%
166
Earnings (loss) before income taxes
29,193
35,600
37,539
15,739
118,071
(9,254
)
-131.7
%
(38,447
)
-158.8
%
(24,993
)
Income taxes
11,385
13,884
12,594
9,468
47,331
2,267
-80.1
%
(9,118
)
-76.1
%
(7,201
)
Net earnings (loss)
17,808
21,716
24,945
6,271
70,740
(11,521
)
-164.7
%
(29,329
)
-283.7
%
(17,792
)
Diluted earnings (loss) per share
0.20
0.25
0.31
0.08
0.84
(0.15
)
-175.0
%
(0.35
)
-287.5
%
(0.23
)
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - INTERNAL FORMAT
(Unaudited)
(Dollars in thousands, except earnings per share)
Q1 FY07 to Q1 FY08
Q4 FY07 to Q1 FY08
06/30/06
09/30/06
12/31/06
03/31/07
FY2007
06/30/07
%
$
%
$
Revenue
336,705
348,319
352,841
357,271
1,395,136
338,168
0.4
%
1,463
-5.3
%
(19,103
)
Operating costs and expenses:
Salaries and benefits
135,917
139,557
139,724
154,801
569,999
148,739
9.4
%
12,822
-3.9
%
(6,062
)
Computer, communications and other equipment
73,119
72,685
71,132
73,409
290,345
72,444
-0.9
%
(675
)
-1.3
%
(965
)
Data costs
43,372
44,196
43,761
42,569
173,898
42,518
-2.0
%
(854
)
-0.1
%
(51
)
Other operating costs and expenses
47,982
50,016
47,156
48,071
193,225
54,939
14.5
%
6,957
14.3
%
6,868
Gains, losses and other items, net
-
-
(225
)
9,122
8,897
15,390
-
15,390
68.7
%
6,268
Total operating costs and expenses
300,390
306,454
301,548
327,972
1,236,364
334,030
11.2
%
33,640
1.8
%
6,058
Income from operations
36,315
41,865
51,293
29,299
158,772
4,138
-88.6
%
(32,177
)
-85.9
%
(25,161
)
Operating Margin
10.8
%
12.0
%
14.5
%
8.2
%
11.4
%
1.2
%
Other income (expense):
Interest expense
(7,769
)
(8,950
)
(14,911
)
(15,002
)
(46,632
)
(13,575
)
74.7
%
(5,806
)
-9.5
%
1,427
Other, net
647
2,685
1,157
1,444
5,933
183
-71.7
%
(464
)
-87.3
%
(1,261
)
Total other income (expense)
(7,122
)
(6,265
)
(13,754
)
(13,558
)
(40,699
)
(13,392
)
88.0
%
(6,270
)
-1.2
%
166
Earnings (loss) before income taxes
29,193
35,600
37,539
15,741
118,073
(9,254
)
-131.7
%
(38,447
)
-158.8
%
(24,995
)
Income taxes
11,385
13,884
12,594
9,468
47,331
2,267
-80.1
%
(9,118
)
-76.1
%
(7,201
)
Net earnings (loss)
17,808
21,716
24,945
6,273
70,742
(11,521
)
-164.7
%
(29,329
)
-283.7
%
(17,794
)
Diluted earnings (loss) per share
0.20
0.25
0.31
0.08
0.84
(0.15
)
-175.0
%
(0.35
)
-287.5
%
(0.23
)
ACXIOM CORPORATION AND SUBSIDIARIES
MARGIN ANALYSIS
(Unaudited)
Q1 FY07 to Q1 FY08
Q4 FY07 to Q1 FY08
06/30/06
09/30/06
12/31/06
03/31/07
FY2007
06/30/07
%
$
%
$
Gross profit
91,060
95,873
100,133
94,450
381,516
72,197
-20.7
%
(18,863
)
-23.6
%
(22,253
)
Gross margin
27.0
%
27.5
%
28.4
%
26.4
%
27.3
%
21.3
%
Operating margin
10.8
%
12.0
%
14.5
%
8.2
%
11.4
%
1.2
%
Services gross profit
65,819
64,715
66,094
57,484
254,112
52,649
-20.0
%
(13,170
)
-8.4
%
(4,835
)
Services gross margin
25.1
%
24.3
%
24.9
%
21.5
%
23.9
%
19.9
%
Data gross profit
25,241
31,158
34,039
36,966
127,404
19,548
-22.6
%
(5,693
)
-47.1
%
(17,418
)
Data gross margin
33.7
%
37.9
%
39.1
%
41.1
%
38.1
%
26.6
%
ACXIOM CORPORATION AND SUBSIDIARIES
EXPENSE TREND ANALYSIS
(Unaudited)
06/30/06
09/30/06
12/31/06
03/31/07
FY2007
06/30/07
Salaries and benefits % of revenue
40.4%
40.1%
39.6%
43.3%
40.9%
44.0%
Computer, communications and other equipment % of revenue
21.7%
20.9%
20.2%
20.5%
20.8%
21.4%
Data costs % of revenue
12.9%
12.7%
12.4%
11.9%
12.5%
12.6%
Other operating costs and expenses % of revenue
14.3%
14.4%
13.4%
13.5%
13.8%
16.2%
Total operating costs and expenses % of revenue
89.2%
88.0%
85.5%
91.8%
88.6%
98.8%
SG&A % of revenue
16.3%
15.5%
13.9%
15.7%
15.3%
15.6%