Acxiom Announces Fourth Quarter and Fiscal Year Results

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Acxiom Announces Fourth Quarter and Fiscal Year Results

Announces New Products, Customers and Partnerships


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

Fourth Quarter Fiscal 2013

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

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

Fiscal Year 2013

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

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

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

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

Fourth Quarter Highlights:

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

Segment Results:

  • Marketing and Data Services: Revenue for the fourth quarter decreased 3 percent to $197 million, as compared to $203 million for the same period a year ago. U.S. revenue of $168 million was relatively flat. Income from operations for the fourth quarter was $21 million, compared to $30 million in the prior year. Operating margin was 11 percent, compared to 15 percent in the previous year. The decrease in margin is primarily attributable to investments in data and our Audience Operating System.
  • IT Infrastructure Management: Revenue for the fourth quarter decreased 4 percent to $65 million, compared to $68 million for the same period a year ago. Income from operations for the quarter was $2 million, compared to $6 million in the prior year. Operating margin was approximately 4 percent, compared to 9 percent a year ago. The decline in operating income and margin was primarily associated with a one-time contract adjustment for an existing customer.
  • Other Services: Revenue was $14 million as compared to $16 million in the prior year. Loss from operations was roughly $1 million in each year.

Financial Guidance

The following projections are forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward-Looking Statements section of this press release. Our guidance does not take into account any unusual items. Acxiom's estimates for fiscal 2014 are as follows:

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

Conference Call

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

Web Link to Financials

You may link to http://www.acxiom.com/FY13_Q4_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.

Forward Looking Statements

This release and today's conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share as well as statements regarding future investments, new customers and new product launches. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients, which could lead to decreases in our operating results; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption "Item 1A, RISK FACTORS" in our Annual Report on Form 10-K for the year ended March 31, 2012, which was filed with the Securities and Exchange Commission on May 25, 2012.

With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom is a registered trademark of Acxiom Corporation.

To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

         
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Three Months Ended
March 31,
$%
20132012VarianceVariance
 
Revenue:
Marketing and data services197,452203,400(5,948)(2.9%)
IT Infrastructure management services65,20267,590(2,388)(3.5%)
Other services14,477 16,265 (1,788)(11.0%)
Total revenue277,131287,255(10,124)(3.5%)
 
Operating costs and expenses:
Cost of revenue213,587213,7882010.1%
Selling, general and administrative41,41138,577(2,834)(7.3%)
Gains, losses and other items, net1,944 12,600 10,65684.6%
 
Total operating costs and expenses256,942 264,965 8,0233.0%
 
Income from operations20,189 22,290 (2,101)(9.4%)
% Margin7.3%7.8%
Other income (expense):
Interest expense(2,959)(3,391)43212.7%
Other, net188 (219)407185.8%
 
Total other income (expense)(2,771)(3,610)83923.2%
 
Earnings from continuing operations before income taxes17,41818,680(1,262)(6.8%)
 
Income taxes4,319 3,838 (481)(12.5%)
 
Net earnings from continuing operations13,09914,842(1,743)(11.7%)
 
Earnings from discontinued operations, net of tax- 31,031 (31,031)(100.0%)
 
Net earnings13,09945,873(32,774)(71.4%)
 
Less: Net loss attributable to noncontrolling interest(139)(193)5428.0%
 
Net earnings attributable to Acxiom13,238 46,066 (32,828)(71.3%)
 
Basic earnings per share:
Net earnings from continuing operations0.180.19(0.01)(5.3%)
Earnings from discontinued operations- 0.40 (0.40)(100.0%)
Net earnings0.18 0.59 (0.41)(69.5%)
 
Net earnings attributable to Acxiom stockholders0.18 0.59 (0.41)(69.5%)
 
 
Diluted earnings per share:
Net earnings from continuing operations0.170.19(0.02)(10.5%)
Earnings from discontinued operations- 0.39 (0.39)(100.0%)
Net earnings0.17 0.58 (0.41)(70.7%)
 
Net earnings attributable to Acxiom stockholders0.18 0.58 (0.40)(69.0%)
         
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Twelve Months Ended
March 31,
$%
20132012VarianceVariance
 
Revenue:
Marketing and data services767,738771,714(3,976)(0.5%)
IT Infrastructure management services275,469291,525(16,056)(5.5%)
Other services56,152 67,385 (11,233)(16.7%)
Total revenue1,099,3591,130,624(31,265)(2.8%)
 
Operating costs and expenses:
Cost of revenue841,826863,48921,6632.5%
Selling, general and administrative Read Full Story

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