Acxiom Announces Third Quarter Results

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Acxiom Announces Third Quarter Results

U.S. marketing and data services revenue up 4 percent

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Acxiom® Corporation (NAS: ACXM) , a recognized leader in marketing services and technology, today announced financial results for its third quarter ended December 31, 2012.


Revenue from continuing operations was $273 million, down 3 percent compared to $281 million for the prior-year period. Income from continuing operations increased 73 percent to $27 million in the current quarter, compared to $16 million in the prior year. Excluding unusual items, operating income for the quarter decreased 13 percent as compared to $31 million in the prior year. Marketing and data services revenue increased slightly to $190 million, compared to $187 million; U.S. marketing and data services revenue increased 4 percent to $160 million, compared to $155 million. As expected, IT infrastructure management revenue decreased 9 percent to $70 million in the current quarter compared to $77 million. Earnings per diluted share attributable to Acxiom stockholders were up 90 percent in the current quarter to $0.19, compared to diluted earnings per share in the prior-year quarter of $0.10. Diluted earnings per share decreased 14 percent as compared to $0.22, excluding unusual items in the prior-year quarter.

Operating cash flow was $132 million for the trailing twelve months, compared to $215 million for the comparable period a year ago. Free cash flow to equity increased slightly to $117 million for the trailing twelve months, compared to $115 million for the comparable period. Free cash flow to equity for the trailing twelve months 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 higher working capital and increased tax payments. Free cash flow available to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

"Revenue from our top 100 U.S. marketing and data services customers was up over 7 percent this quarter and up over 9 percent year to date," said Acxiom CEO Scott Howe. "While we are pleased with this performance, we also recognize we have work to do in order to further expand our client base and reignite growth with our small and mid-tier customers."

Third Quarter Highlights:

  • Acxiom continues to invest in its new digital products suite. During the quarter, the company released the following new products: InfoBase data for major ad platforms and over 1,500 predictive models for 10 major industry verticals. The company intends to hold a product briefing with investors on March 6 in New York City. The briefing will be presented by Dr. Phil Mui, key members of the engineering team and Nada Stirratt, the company's Chief Revenue Officer.
  • Acxiom repurchased 1,040,000 shares for $18.3 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 9.9 million shares, or approximately 12 percent of the outstanding common stock, for $131 million. The company has remaining capacity of approximately $19 million out of the total stock repurchase authorization of $150 million.
  • Acxiom announced its annual invitation-only client forum known as Engageto be heldon March 6-8 in New York City. Over 200 top clients and prospects are registered to attend the conference which provides the opportunity for the world's largest marketers to discuss case studies and new technologies. President Bill Clinton will deliver the keynote address and statistician Nate Silver will also be featured.
  • Acxiom appointed Dana Hayes, Jr. as Group VP of Partner Development. Hayes will lead efforts to build strategic partnerships and distribution relationships for global data driven marketing and advertising. He has more than 15 years of experience in digital media and marketing in leadership roles with companies such as weather.com and Tribune Company.

Segment Results:

  • Marketing and Data Services: Revenue for the third quarter increased slightly to $190 million, as compared to $187 million for the same period a year ago. U.S. revenue of $160 million increased 4 percent but was offset by declines internationally. Income from operations for the third quarter was $18 million, compared to $21 million in the prior period. Operating margin was 10 percent, compared to 11 percent in the previous year.
  • IT Infrastructure Management: Revenue for the third quarter decreased 9 percent to $70 million, compared to $77 million for the same period a year ago. Income from operations for the quarter was roughly flat at $10 million. Operating margin was approximately 14 percent, compared to 13 percent a year ago.
  • Other Services: Revenue was $13 million as compared to $16 million in the prior year. Loss from operations was roughly flat at $1 million.

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 charges. Acxiom's estimates for fiscal 2013 are as follows:

  • We expect revenue for the fiscal year to be down approximately 2.5 percent as compared to $1.131 billion in the prior year. The decline is projected primarily as a result of decreases in IT infrastructure management and international operations.
  • We now expect earnings per diluted share of up to $.73 as compared to our previous guidance of roughly $.70.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

Web Link to Financials

You may link to http://www.acxiom.com/FY13_Q3_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves clients around the world from locations in the United States, Europe, Asia-Pacific, and South America. 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 from continuing operations and earnings per share as well as statements regarding 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.

 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
        
For the Three Months Ended
December 31,
$%
20122011Variance  Variance
 
Revenue:
Marketing and data services190,138187,4612,6771.4%
IT Infrastructure management services69,91677,173(7,257)(9.4%)
Other services13,048 16,259 (3,211)(19.7%)
Total revenue273,102280,893(7,791)(2.8%)
 
Operating costs and expenses:
Cost of revenue209,027213,9254,8982.3%
Selling, general and administrative37,30336,318(985)(2.7%)
Impairment of goodwill and other intangibles-17,80317,803100.0%
Gains, losses and other items, net(126)(2,671)2,54595.3%
 
Total operating costs and expenses246,204 265,375 19,1717.2%
 
Income from operations26,898 15,518 11,38073.3%
% Margin9.8%5.5%
Other income (expense):
Interest expense(3,178)(3,883)70518.2%
Other, net565 (98)663676.5%
 
Total other income (expense)(2,613)(3,981)1,36834.4%
 
Earnings from continuing operations before income taxes24,28511,53712,748110.5%
 
Income taxes9,836 9,700 (136)(1.4%)
 
Net earnings from continuing operations14,4491,83712,612686.6%
 
Earnings from discontinued operations, net of tax- 814 (814)(100.0%)
 
Net earnings14,4492,65111,798445.0%
 
Less: Net loss attributable to noncontrolling interest(76)(5,279)5,20398.6%
 
Net earnings attributable to Acxiom14,525 7,930 6,59583.2%
 
Basic earnings per share:
Net earnings from continuing operations0.190.020.17850.0%
Earnings from discontinued operations0.00 0.01 (0.01)(100.0%)
Net earnings0.19 0.03 0.16533.3%
 
Net earnings attributable to Acxiom stockholders0.20 0.10 0.10100.0%
 
 
Diluted earnings per share:
Net earnings from continuing operations0.190.020.17850.0%
Earnings from discontinued operations0.00 0.01 (0.01)(100.0%)
Net earnings0.19 0.03 0.16533.3%
 
Net earnings attributable to Acxiom stockholders0.19 0.10 0.0990.0%
 
        
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
For the Nine Months Ended
December 31,
$%
20122011Variance  Variance
 
Revenue:
Marketing and data services570,286568,3141,9720.3%
IT Infrastructure management services210,267223,935(13,668)(6.1%)
Other services41,675 51,120 (9,445)(18.5%)
Total revenue822,228843,369(21,141)(2.5%)
 
Operating costs and expenses:
Cost of revenue628,239649,70121,4623.3%
Selling, general and administrative111,393112,5541,1611.0%
Impairment of goodwill and other intangibles-17,80317,803100.0%
Gains, losses and other items, net66 38 (28)(73.7%)
 
Total operating costs and expenses739,698 780,096 40,3985.2%
 
Income from operations82,530 63,273 19,25730.4%
% Margin10.0%7.5%
Other income (expense):
Interest expense(9,735)(14,057)4,32230.7%
Other, net(36)(1,150)1,11496.9%
 
Total other income (expense)(9,771)(15,207) Read Full Story

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