Acxiom (NASDAQ:ACXM)
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Acxiom® Corporation
(Nasdaq: ACXM) today announced financial results for the third quarter
of fiscal 2008 ended December 31, 2007. Acxiom will hold a conference
call at 4:30 p.m. CST today to discuss this information further.
Interested parties are invited to listen to the call, which will be
broadcast via the Internet at www.acxiom.com.
Revenue for the three-month period was $350.3 million, a decrease of 0.7
percent from the third quarter of fiscal 2007. Operating income for the
quarter was $96.9 million including the unusual items detailed below.
This represents an increase of 89 percent compared to the same quarter a
year ago. Earnings of $.69 per diluted share include the impact of $.49
per share in unusual benefit, net of income tax effect, in the quarter
as detailed below.
For the nine-month period ended December 31, 2007, revenue totaled $1.04
billion, up 0.2 percent from the same period in the prior year. Income
from operations for the nine months was $121.4 million compared to
$129.5 million a year ago. Diluted earnings per share were $.66 compared
to $.75 in the prior year. The diluted earnings per share include the
impact of $28.1 million, or $.21 per share, of benefit from unusual
items, net of income tax effect, for the nine-month period.
Third-quarter earnings per diluted share of $.69 include a $63.5
million, or $.49 per diluted share, net benefit related to gains, losses
and other items. The significant components of the gains, losses and
other items are:
A $65 million payment received from Silver Lake and ValueAct Capital
after the termination of the firms’
agreement to acquire Acxiom
A $2.6 million gain realized from the sale of the software
distribution unit of Acxiom’s operations in
France
A $3 million payment to retiring company leader Charles Morgan
$0.3 million in transaction costs related to the Silver Lake/ValueAct
transaction
$0.8 million for ongoing restructuring activities in Europe
“Our revenue and earnings on continuing
operations continue to be impacted by the difficulty in the financial
services industry, which has resulted in reduced spending by many of our
clients,” interim company leader Charles D.
Morgan said. “With many of our largest clients
affected by the downturn, it has had a significant impact on an
important sector of our business. As we have discussed previously, due
to the decrease in revenue during the first half of our fiscal year, we
took measures to reduce expenses. Although these initiatives had a
meaningful impact on expenses this quarter, these measures did not fully
offset the reduction in revenue in the third quarter. We expect to
experience continued reduced spending from some of our clients,
especially in the financial services industry.”
Details of Acxiom’s third-quarter performance
include:
Revenue of $350.3 million, down 0.7 percent from $352.8 million in the
third quarter a year ago
Income from operations of $96.9 million, up 88.9 percent from $51.3
million in the third quarter last year; income from operations
included $63.5 million generated by gains, losses and other items
Diluted earnings per share of $.69 compared to $.31 in the third
quarter of fiscal 2007; included is $.49 in diluted earnings per share
that represents the net of gains, losses and other items
Operating cash flow of $130.1 million and free cash flow available to
equity of $83.9 million; free cash flow available to equity is a
non-GAAP financial measure; a reconciliation to the comparable GAAP
measure, operating cash flow, is attached to this press release
The repurchase of approximately 4.0 million shares of Acxiom stock for
$49.1 million
Segment information
Information Services Division: The division develops, sells and
delivers industry-tailored solutions globally through the integration
of products, services and consulting. Revenue for the quarter was
$184.5 million, down 1.7 percent from the third quarter of the
previous year. For the nine months ended December 31, 2007, revenue
was $556.7 million, up 2.4 percent from the previous year. Operating
income for the quarter was $25.6 million, down 32.5 percent from the
third quarter of the previous year. For the nine months just ended,
operating income was $78.3 million, down 23.4 percent from the
previous nine-month period.
Information Products Division: The division develops and sells
all global data products, including InfoBase-X®
and PersonicX®, as
well as fraud and risk mitigation products sold in the U.S., including
InsightIdentify. It focuses on product development, product lifecycle
management, data content management and innovation. Revenue for the
quarter was $111.2 million, up 4.9 percent from the third quarter of
the previous year. For the nine months ended December 31, 2007,
revenue was $316.1 million, up 3.4 percent from the previous year.
Operating income for the quarter was $8.2 million, up 20.2 percent
from the third quarter of the previous year. For the nine months just
ended, operating income was $10.7 million, up 7.3 percent from the
previous nine-month period.
Infrastructure Management Division: The division develops and
delivers information technology products and services that improve a
company’s ability to manage its information
technology delivery platform with lower costs and higher efficiencies.
Such offerings include traditional IT outsourcing and transformational
solutions such as the Acxiom data factory. Revenue for the quarter was
$112.9 million, down 4.3 percent from the third quarter of the
previous year. For the nine months ended December 31, 2007, revenue
was $339.3 million, down 5.1 percent from the previous year. Operating
income for the quarter was $11.1 million, down 18.5 percent from the
third quarter of the previous year. For the nine months just ended,
operating income was $36.0 million, down 8.9 percent from the previous
nine-month period.
Recent developments
New Chief Executive Officer announced
On January 17, 2008, Acxiom announced the naming of John Meyer as its
new CEO and President. Meyer has most recently been president of the
Global Services group of Alcatel-Lucent. Prior to Alcatel-Lucent, Meyer
served in a variety of executive capacities with EDS. Meyer will join
Acxiom on February 4, 2008, and will also serve as a member of the board
of directors.
Meyer said that “Acxiom's position as the
leading provider of offline and online marketing services is the envy of
the market. Acxiom's proud history of innovation and delivery excellence
has created value for its clients for decades. It is an honor to join
the Company and do all I can to build on its successes. I look forward
to working with our associates to create value for our clients and
shareholders.”
EMC Update
In December 2005, the Company and EMC entered into an agreement whereby
EMC purchased Acxiom’s existing grid
operating system for a total payment of $30 million, which the Company
previously received. As part of the agreement, EMC has the option, in
exchange for a $20 million payment by the end of January, to acquire the
Acxiom unit responsible for the further development of the technology
initially sold to EMC as well as new technology and functionality
created by the unit that could be utilized by the Company and EMC.
EMC has informed the company that it does not intend to exercise the
option, per its original terms, and the parties are now engaged in
negotiations concerning an ongoing commercial relationship.
ValueAct SmallCap Fund
Upon the request of ValueAct Capital Group and pursuant to the August 5,
2006 agreement between the company and ValueAct Capital Group, on
January 17, 2008 permission was granted to ValueAct SmallCap Master
Fund, L.P. to purchase up to $30 million of the common stock of the
company in open market or privately negotiated transactions. It is the
understanding of the company that ValueAct Capital Group is associated
with but does not control ValueAct SmallCap Master Fund, L.P.
Outlook
The Company is updating its outlook for the remainder of its 2008 fiscal
year. Previous guidance is superseded by the updated guidance and should
not be relied upon. Revenue for the 12 months ending March 31, 2008 is
expected to be flat to down 1 percent compared to fiscal 2007. Earnings
per diluted share, before the effect of any unusual items recorded
during the fiscal year, are expected to be in the range of $.60 to $.65.
Reflecting the $28.1 million of unusual items recorded during the first
three quarters of the fiscal year, earnings per diluted share for the
fiscal year are expected to be from $.81 to $.86.
These projections are forward looking, and actual results may differ
materially. These projections may be impacted by mergers, acquisitions,
divestitures or other business combinations that may be completed in the
future as well as the other factors set forth below.
About Acxiom
Acxiom Corporation (Nasdaq: ACXM) integrates data, services and
technology to create and deliver customer and information management
solutions for many of the largest, most respected companies in the
world. The core components of Acxiom’s
innovative solutions are Customer Data Integration (CDI) technology,
data, database services, IT outsourcing, consulting and analytics, and
privacy leadership. Founded in 1969, Acxiom is headquartered in Little
Rock, Arkansas, with locations throughout the United States and Europe,
and in Australia, China and Canada.
For more information, visit www.acxiom.com.
This release and today’s conference call
contain forward-looking statements that are subject to certain risks and
uncertainties that could cause actual results to differ materially. Such
statements may include but are not necessarily limited to the following:
that the projected revenue and earnings per share will be within the
estimated ranges. The following are factors, among others, that could
cause actual results to differ materially from these forward-looking
statements: The possibility that certain contracts may not be closed, or
may not be closed within the anticipated time frames; the possibility
that clients may attempt to reduce the amount of business they do with
the Company; the possibility that in the event that a change of control
of the Company was sought that certain of the clients of the Company
would invoke certain provisions in their contracts resulting in a
decline in the revenue and profit of the Company; the possibility that
certain contracts may not generate the anticipated revenue or
profitability; the possibility that negative changes in economic or
other conditions might lead to a reduction in demand for our products
and services; the possibility of an economic slowdown or that economic
conditions in general will not be as expected; the possibility that the
historical seasonality of our business may change; the possibility that
significant customers may experience extreme, severe economic
difficulty; the possibility that the integration of acquired businesses
may not be as successful as planned; the possibility that the fair value
of certain of our assets may not be equal to the carrying value of those
assets now or in future time periods; the possibility that sales cycles
may lengthen; the possibility that we may not be able to attract and
retain qualified technical and leadership associates, or that we may
lose key associates to other organizations; the possibility that we won’t
be able to properly motivate our sales force or other associates; the
possibility that we won’t be able to achieve
cost reductions and avoid unanticipated costs; the possibility that we
won’t be able to continue to receive credit
upon satisfactory terms and conditions; the possibility that competent,
competitive products, technologies or services will be introduced into
the marketplace by other companies; the possibility that we may be
subjected to pricing pressure due to market conditions and/or
competitive products and services; the possibility that there will be
changes in consumer or business information industries and markets that
negatively impact the Company; the possibility that changes in
accounting pronouncements may occur and may impact these projections;
the possibility that we won’t be able to
protect proprietary information and technology or to obtain necessary
licenses on commercially reasonable terms; the possibility that we may
encounter difficulties when entering new markets or industries; the
possibility that there will be changes in the legislative, accounting,
regulatory and consumer environments affecting our business, including
but not limited to litigation, legislation, regulations and customs
relating to our ability to collect, manage, aggregate and use data; the
possibility that data suppliers might withdraw data from us, leading to
our inability to provide certain products and services; the possibility
that we may enter into short-term contracts which would affect the
predictability of our revenues; the possibility that the amount of ad
hoc, volume-based and project work will not be as expected; the
possibility that we may experience a loss of data center capacity or
interruption of telecommunication links or power sources; the
possibility that we may experience failures or breaches of our network
and data security systems, leading to potential adverse publicity,
negative customer reaction, or liability to third parties; the
possibility that postal rates may increase, thereby leading to reduced
volumes of business; the possibility that our clients may cancel or
modify their agreements with us; the possibility that we will not
successfully complete customer contract requirements on time or meet the
service levels specified in the contracts, which may result in contract
penalties or lost revenue; the possibility that we experience processing
errors which result in credits to customers, re-performance of services
or payment of damages to customers; the possibility that the services of
the United States Postal Service, their global counterparts and other
delivery systems may be disrupted; and the possibility that we may be
affected by other competitive factors.
With respect to the provision of products or services outside our
primary base of operations in the United States, all of the above
factors apply, along with the difficulty of doing business in numerous
sovereign jurisdictions due to differences in scale, competition,
culture, laws and regulations.
Other factors are detailed from time to time in our periodic reports and
registration statements filed with the United States Securities and
Exchange Commission. We believe that we have the product and technology
offerings, facilities, associates and competitive and financial
resources for continued business success, but future revenues, costs,
margins and profits are all influenced by a number of factors, including
those discussed above, all of which are inherently difficult to forecast.
We undertake no obligation to update the information contained in this
press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
December 31,
$
%
2007
2006
Variance
Variance
Revenue:
Services
262,697
265,798
(3,101
)
(1.2
%)
Data
87,572
87,043
529
0.6
%
Total revenue
350,269
352,841
(2,572
)
(0.7
%)
Operating costs and expenses:
Cost of revenue
Services
201,648
199,704
1,944
1.0
%
Data
60,551
53,004
7,547
14.2
%
Total cost of revenue
262,199
252,708
9,491
3.8
%
Services gross margin
23.2
%
24.9
%
Data gross margin
30.9
%
39.1
%
Total gross margin
25.1
%
28.4
%
Selling, general and administrative
54,669
49,065
5,604
11.4
%
Gains, losses and other items, net
(63,489
)
(225
)
(63,264
)
100.0
%
Total operating costs and expenses
253,379
301,548
(48,169
)
(16.0
%)
Income from operations
96,890
51,293
45,597
88.9
%
Other income (expense):
Interest expense
(12,797
)
(14,911
)
2,114
(14.2
%)
Other, net
1,394
1,157
237
20.5
%
Total other income (expense)
(11,403
)
(13,754
)
2,351
(17.1
%)
Earnings before income taxes
85,487
37,539
47,948
127.7
%
Income taxes
30,791
12,594
18,197
144.5
%
Net earnings
54,696
24,945
29,751
119.3
%
Earnings per share:
Basic
0.69
0.32
0.37
115.6
%
Diluted
0.69
0.31
0.38
122.6
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Nine Months Ended
December 31,
$
%
2007
2006
Variance
Variance
Revenue:
Services
795,085
793,789
1,296
0.2
%
Data
244,378
244,076
302
0.1
%
Total revenue
1,039,463
1,037,865
1,598
0.2
%
Operating costs and expenses:
Cost of revenue
Services
622,431
597,161
25,270
4.2
%
Data
171,434
153,638
17,796
11.6
%
Total cost of revenue
793,865
750,799
43,066
5.7
%
Services gross margin
21.7
%
24.8
%
Data gross margin
29.8
%
37.1
%
Total gross margin
23.6
%
27.7
%
Selling, general and administrative
162,380
157,818
4,562
2.9
%
Gains, losses and other items, net
(38,167
)
(225
)
(37,942
)
100.0
%
Total operating costs and expenses
918,078
908,392
9,686
1.1
%
Income from operations
121,385
129,473
(8,088
)
(6.2
%)
Other income (expense):
Interest expense
(40,214
)
(31,630
)
(8,584
)
27.1
%
Other, net
2,908
4,489
(1,581
)
(35.2
%)
Total other income (expense)
(37,306
)
(27,141
)
(10,165
)
37.5
%
Earnings before income taxes
84,079
102,332
(18,253
)
(17.8
%)
Income taxes
30,362
37,863
(7,501
)
(19.8
%)
Net earnings
53,717
64,469
(10,752
)
(16.7
%)
Earnings per share:
Basic
0.67
0.77
(0.10
)
(13.0
%)
Diluted
0.66
0.75
(0.09
)
(12.0
%)
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
December 31,
September 30,
$
%
2007
2007
Variance
Variance
Revenue:
Services
262,697
267,653
(4,956
)
(1.9
%)
Data
87,572
83,373
4,199
5.0
%
Total revenue
350,269
351,026
(757
)
(0.2
%)
Operating costs and expenses:
Cost of revenue
Services
201,648
208,697
(7,049
)
(3.4
%)
Data
60,551
56,998
3,553
6.2
%
Total cost of revenue
262,199
265,695
(3,496
)
(1.3
%)
Services gross margin
23.2
%
22.0
%
Data gross margin
30.9
%
31.6
%
Total gross margin
25.1
%
24.3
%
Selling, general and administrative
54,669
55,042
(373
)
(0.7
%)
Gains, losses and other items, net
(63,489
)
9,932
(73,421
)
(739.2
%)
Total operating costs and expenses
253,379
330,669
(77,290
)
(23.4
%)
Income from operations
96,890
20,357
76,533
376.0
%
Other income (expense):
Interest expense
(12,797
)
(13,842
)
1,045
(7.5
%)
Other, net
1,394
1,331
63
4.7
%
Total other income (expense)
(11,403
)
(12,511
)
1,108
(8.9
%)
Earnings before income taxes
85,487
7,846
77,641
989.6
%
Income taxes
30,791
(2,696
)
33,487
(1242.1
%)
Net earnings
54,696
10,542
44,154
418.8
%
Earnings per share:
Basic
0.69
0.13
0.56
430.8
%
Diluted
0.69
0.13
0.56
430.8
%
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
December 31,
December 31,
September 30,
2007
2006
2007
Basic earnings per share:
Numerator - net earnings
54,696
24,945
10,542
Denominator - weighted-average shares outstanding
79,418
77,717
80,646
Basic earnings per share
0.69
0.32
0.13
Diluted earnings per share:
Numerator - net earnings
54,696
24,945
10,542
Denominator - weighted-average shares outstanding
79,418
77,717
80,646
Dilutive effect of common stock options, warrants and restricted
stock
253
2,238
1,839
79,671
79,955
82,485
Diluted earnings per share
0.69
0.31
0.13
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Nine Months Ended
December 31,
December 31,
2007
2006
Basic earnings per share:
Numerator - net earnings
53,717
64,469
Denominator - weighted-average shares outstanding
79,802
83,957
Basic earnings per share
0.67
0.77
Diluted earnings per share:
Numerator - net earnings
53,717
64,469
Denominator - weighted-average shares outstanding
79,802
83,957
Dilutive effect of common stock options, warrants and restricted
stock
1,380
2,237
81,182
86,194
Diluted earnings per share
0.66
0.75
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
December 31,
Revenue:
2007
2006
Information services
184,504
187,673
Information products
111,225
106,002
Infrastructure management
112,916
117,966
Eliminations
(58,376
)
(58,800
)
Total revenue
350,269
352,841
Income from operations:
Information services
25,626
37,954
Information products
8,216
6,834
Infrastructure management
11,138
13,666
Corporate & other
51,910
(7,161
)
Total income from operations
96,890
51,293
Margin:
Information services
13.9
%
20.2
%
Information products
7.4
%
6.4
%
Infrastructure management
9.9
%
11.6
%
Total margin
27.7
%
14.5
%
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Nine Months Ended
December 31,
December 31,
Revenue:
2007
2006
Information services
556,713
543,501
Information products
316,127
305,871
Infrastructure management
339,319
357,740
Eliminations
(172,696
)
(169,247
)
Total revenue
1,039,463
1,037,865
Income from operations:
Information services
78,315
102,259
Information products
10,654
9,925
Infrastructure management
36,016
39,523
Corporate & other
(3,600
)
(22,234
)
Total income from operations
121,385
129,473
Margin:
Information services
14.1
%
18.8
%
Information products
3.4
%
3.2
%
Infrastructure management
10.6
%
11.0
%
Total margin
11.7
%
12.5
%
ACXIOM CORPORATION AND SUBSIDIARIES
DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
December 31,
$
%
September 30,
$
%
2007
2006
Variance
Variance
2007
Variance
Variance
Data
67,095
68,520
(1,425
)
(2.1
%)
63,534
3,561
5.6
%
Passthrough data
20,477
18,523
1,954
10.5
%
19,839
638
3.2
%
Total data revenue
87,572
87,043
529
0.6
%
83,373
4,199
5.0
%
Cost of data revenue:
Data
40,074
34,481
5,593
16.2
%
37,159
2,915
7.8
%
Passthrough data
20,477
18,523
1,954
10.5
%
19,839
638
3.2
%
Total cost of data
60,551
53,004
7,547
14.2
%
56,998
3,553
6.2
%
Margin:
Data
40.3
%
49.7
%
41.5
%
Passthrough data
0.0
%
0.0
%
0.0
%
Total data
30.9
%
39.1
%
31.6
%
ACXIOM CORPORATION AND SUBSIDIARIES
DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE
(Unaudited)
(Dollars in thousands)
For the Nine Months Ended
December 31,
December 31,
$
%
2007
2006
Variance
Variance
Data
184,470
185,704
(1,234
)
(0.7
%)
Passthrough data
59,908
58,372
1,536
2.6
%
Total data revenue
244,378
244,076
302
0.1
%
Cost of data revenue:
Data
111,526
95,266
16,260
17.1
%
Passthrough data
59,908
58,372
1,536
2.6
%
Total cost of data
171,434
153,638
17,796
11.6
%
Margin:
Data
39.5
%
48.7
%
Passthrough data
0.0
%
0.0
%
Total data
29.8
%
37.1
%
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
December 31,
March 31,
$
%
2007
2007
Variance
Variance
Assets
Current assets:
Cash and cash equivalents
66,265
37,776
28,489
75.4
%
Trade accounts receivable, net
286,627
285,850
777
0.3
%
Refundable income taxes
-
7,657
(7,657
)
(100.0
%)
Deferred income taxes
22,211
22,341
(130
)
(0.6
%)
Other current assets
46,017
59,252
(13,235
)
(22.3
%)
Total current assets
421,120
412,876
8,244
2.0
%
Property and equipment
772,176
733,175
39,001
5.3
%
Less - accumulated depreciation and amortization
493,394
420,883
72,511
17.2
%
Property and equipment, net
278,782
312,292
(33,510
)
(10.7
%)
Software, net of accumulated amortization
60,836
44,289
16,547
37.4
%
Goodwill
518,608
522,046
(3,438
)
(0.7
%)
Purchased software licenses, net of accumulated amortization
132,344
151,326
(18,982
)
(12.5
%)
Unbilled and notes receivable, excluding current portions
6,584
16,742
(10,158
)
(60.7
%)
Deferred costs, net
130,958
137,684
(6,726
)
(4.9
%)
Data acquisition costs
50,552
35,398
15,154
42.8
%
Other assets, net
22,555
23,251
(696
)
(3.0
%)
1,622,339
1,655,904
(33,565
)
(2.0
%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term obligations
85,450
106,921
(21,471
)
(20.1
%)
Trade accounts payable
46,631
54,808
(8,177
)
(14.9
%)
Accrued payroll and related expenses
28,478
33,663
(5,185
)
(15.4
%)
Other accrued expenses
92,036
79,078
12,958
16.4
%
Deferred revenue
70,904
113,318
(42,414
)
(37.4
%)
Income taxes
7,426
-
7,426
100.0
%
Total current liabilities
330,925
387,788
(56,863
)
(14.7
%)
Long-term obligations:
Long-term debt and capital leases, net of current installments
594,627
631,184
(36,557
)
(5.8
%)
Software and data licenses, net of current installments
10,631
17,695
(7,064
)
(39.9
%)
Total long-term obligations
605,258
648,879
(43,621
)
(6.7
%)
Deferred income taxes
98,340
97,926
414
0.4
%
Commitments and contingencies
Stockholders' equity:
Common stock
11,396
11,145
251
2.3
%
Additional paid-in capital
774,527
718,336
56,191
7.8
%
Retained earnings
511,711
462,844
48,867
10.6
%
Accumulated other comprehensive income
27,777
17,526
10,251
58.5
%
Treasury stock, at cost
(737,595
)
(688,540
)
(49,055
)
7.1
%
Total stockholders' equity
587,816
521,311
66,505
12.8
%
1,622,339
1,655,904
(33,565
)
(2.0
%)
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the
Three Months Ended
December 31,
2007
2006
Cash flows from operating activities:
Net earnings
54,696
24,945
Non-cash operating activities:
Depreciation and amortization
57,424
54,396
Loss (gain) on disposal or impairment of assets, net
(2,643
)
187
Deferred income taxes
2,091
(553
)
Non-cash stock compensation expense
2,648
1,555
Changes in operating assets and liabilities:
Accounts receivable
8,564
(8,933
)
Other assets
17,777
(769
)
Accounts payable and other liabilities
3,296
979
Deferred revenue
(13,759
)
(9,148
)
Net cash provided by operating activities
130,094
62,659
Cash flows from investing activities:
Disposition of operations
14,250
-
Capitalized software
(8,507
)
(6,798
)
Capital expenditures
(6,891
)
(2,518
)
Deferral of costs
(17,460
)
(16,149
)
Payments received from investments
1,804
-
Net cash paid in acquisitions
(3,720
)
(14,400
)
Net cash used by investing activities
(20,524
)
(39,865
)
Cash flows from financing activities:
Proceeds from debt
-
(513
)
Payments of debt
(49,380
)
(25,817
)
Dividends paid
(4,850
)
(4,663
)
Sale of common stock
2,711
8,896
Acquisition of treasury stock
(45,565
)
(6,001
)
Tax benefit of stock options exercised
25
1,237
Net cash used by financing activities
(97,059
)
(26,861
)
Effect of exchange rate changes on cash
(77
)
249
Net increase (decrease) in cash and cash equivalents
12,434
(3,818
)
Cash and cash equivalents at beginning of period
53,831
91,832
Cash and cash equivalents at end of period
66,265
88,014
Supplemental cash flow information:
Cash paid during the period for:
Interest
12,270
14,813
Income taxes
4,743
8,196
Payments on capital leases and installment payment arrangements
17,542
16,700
Payments on software and data license liabilities
6,226
6,000
Other debt payments, excluding line of credit
5,612
3,117
Prepayment of debt
20,000
-
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease and
installment payment arrangements
5,004
10,427
Disposal of asset under financing
(5,304
)
-
Construction and other financing
3,995
4,511
Assets acquired under data obligation
15,306
-
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the
Nine Months Ended
December 31,
2007
2006
Cash flows from operating activities:
Net earnings
53,717
64,469
Non-cash operating activities:
Depreciation and amortization
177,345
170,379
Loss (gain) on disposal or impairment of assets, net
(2,717
)
(1,483
)
Deferred income taxes
505
(975
)
Non-cash stock compensation expense
5,678
2,699
Changes in operating assets and liabilities:
Accounts receivable
(1,553
)
(15,768
)
Other assets
19,163
(2,159
)
Accounts payable and other liabilities
4
(7,844
)
Deferred revenue
(42,272
)
(25,900
)
Net cash provided by operating activities
209,870
183,418
Cash flows from investing activities:
Disposition of operations
14,250
-
Capitalized software
(26,774
)
(19,443
)
Capital expenditures
(15,049
)
(5,995
)
Cash collected from the sale and license of software
-
10,000
Deferral of costs
(43,219
)
(49,595
)
Payments received from investments
3,603
2,708
Net cash paid in acquisitions
(9,191
)
(14,400
)
Net cash used by investing activities
(76,380
)
(76,725
)
Cash flows from financing activities:
Proceeds from debt
2,127
649,756
Payments of debt
(108,009
)
(393,742
)
Dividends paid
(4,850
)
(13,471
)
Sale of common stock
44,812
25,801
Acquisition of treasury stock
(45,565
)
(299,301
)
Tax benefit of stock options exercised
5,993
4,081
Net cash used by financing activities
(105,492
)
(26,876
)
Effect of exchange rate changes on cash
491
492
Net increase in cash and cash equivalents
28,489
80,309
Cash and cash equivalents at beginning of period
37,776
7,705
Cash and cash equivalents at end of period
66,265
88,014
Supplemental cash flow information:
Cash paid during the period for:
Interest
40,008
31,375
Income taxes
4,954
31,027
Payments on capital leases and installment payment arrangements
54,330
57,556
Payments on software and data license liabilities
19,998
21,151
Other debt payments, excluding line of credit
11,554
6,632
Prepayment of debt
20,000
-
Revolving credit payments
2,127
308,403
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease and
installment payment arrangements
20,724
44,454
Disposal of asset under financing
(5,304
)
-
Construction and other financing
9,346
18,167
Software licenses and maintenance acquired under software obligation
493
15,266
Asset acquired under data obligation
15,306
-
Note payable issued in acquisition
300
-
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
06/30/06
09/30/06
12/31/06
03/31/07
YTD
FY2007
06/30/07
09/30/07
12/31/07
YTD
FY2008
Net cash provided by operating activities
56,350
64,409
62,659
76,534
259,952
39,132
40,644
130,094
209,870
Plus:
Payments received from investments
783
1,925
-
50
2,758
-
1,799
1,804
3,603
Disposition of operations
-
-
-
-
-
-
-
14,250
14,250
Less:
Capitalized software
(5,719
)
(6,926
)
(6,798
)
(8,000
)
(27,443
)
(8,447
)
(9,820
)
(8,507
)
(26,774
)
Capital expenditures
(217
)
(3,260
)
(2,518
)
(8,230
)
(14,225
)
(2,867
)
(5,291
)
(6,891
)
(15,049
)
Deferral of costs
(16,887
)
(16,559
)
(16,149
)
(17,092
)
(66,687
)
(14,129
)
(11,630
)
(17,460
)
(43,219
)
Payments on capital leases and installment payment arrangements
(18,905
)
(21,951
)
(16,700
)
(18,579
)
(76,135
)
(19,137
)
(17,651
)
(17,542
)
(54,330
)
Payments on software and data license liabilities
(7,847
)
(7,304
)
(6,000
)
(5,746
)
(26,897
)
(6,493
)
(7,279
)
(6,226
)
(19,998
)
Other required debt payments
(1,711
)
(1,804
)
(3,117
)
(3,603
)
(10,235
)
(3,526
)
(2,416
)
(5,612
)
(11,554
)
Subtotal
5,847
8,530
11,377
15,334
41,088
(15,467
)
(11,644
)
83,910
56,799
Plus:
Tax benefit of stock options and warrants
1,079
1,765
1,237
61
4,142
5,624
344
25
5,993
Subtotal
6,926
10,295
12,614
15,395
45,230
(9,843
)
(11,300
)
83,935
62,792
Plus:
Cash collected from sale of software
5,000
5,000
-
-
10,000
-
-
-
-
Total
11,926
15,295
12,614
15,395
55,230
(9,843
)
(11,300
)
83,935
62,792