Acxiom Announces Second Quarter Results
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Q2FY 2013 Financials
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Earnings per share up 40 percent; 11 percent excluding unusual items; Two Acxiom clients named Marketer of the Year by the Direct Marketing Association
LITTLE ROCK, Ark. – October 25, 2012 — Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for its second quarter ended September 30, 2012.
Revenue from continuing operations was $277 million, down 3 percent compared to $286 million for the second quarter last year. Income from continuing operations increased 12 percent to $30 million in the current quarter, compared to $27 million in the prior year. Marketing and data services segment revenue was roughly flat at $194 million, compared to $196 million; U.S. marketing and data services revenue was up 2 percent to $166 million, compared to $162 million. IT infrastructure management segment revenue decreased 5 percent to $70 million in the current quarter compared to $74 million. Earnings per diluted share attributable to Acxiom stockholders were up 40 percent in the current quarter to $0.21, compared to diluted earnings per share of $0.15. Diluted earnings per share increased 11 percent as compared to $0.19 in the prior year, excluding unusual items.
Operating cash flow was $176 million for the trailing twelve months, compared to $197 million for the comparable period a year ago. Free cash flow to equity increased 68 percent to $159 million for the trailing twelve months, compared to $95 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. Free cash flow available to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.
“We are encouraged by several aspects of our first half performance and direction,” said Acxiom CEO Scott Howe. “A leading indicator of our future success is the performance of our customers. We are pleased that two of our clients, United Airlines and Macy’s, were both recently named Marketer of the Year by the Direct Marketing Association. While we have much to do, particularly as it relates to our top-line growth, we are building success stories and are excited about what’s ahead for our company.”
Second Quarter Highlights:
- 0perating margin increased approximately 1.5 percentage points to 10.9 percent, as a result of improvements in the company’s IT infrastructure management segment and international operations. Excluding unusual items operating margin improved by approximately 60 basis points.
- Acxiom repurchased 800,000 shares for $14 million during the quarter. Since August 2011, the company has repurchased 9 million shares, or approximately 11 percent of the outstanding common stock, for $115 million. The company has remaining capacity of approximately $35 million out of the total stock repurchase authorization of $150 million.
- In the quarter, Acxiom clients United Airlines and Macy’s were both named “Marketer of the Year” by the Direct Marketing Association. United also received the top “Innovation Award.” These awards were given for outstanding achievement in multichannel direct marketing and represent the DMA’s highest honors. United partnered with Acxiom for its MileagePlus program, which delivered personalized and relevant communications to its members. Acxiom worked with Macy’s to create a more complete view of each customer to enable insight-driven communications coordinated across offline and digital channels.
- Acxiom’s Board of Directors voted to expand its membership from nine to 10 directors and appointed Richard P. Fox, a business consultant and financial expert, to the board. Fox has a strong background in public company financial and accounting matters complemented by his work with digital marketing companies.
- Acxiom Chief Marketing Officer Tim Suther was selected by the ranking committee of ExecRank as a Top CMO for 2012. The rankings are the result of two years of research and feedback from evaluation committees and top CMOs. ExecRank evaluated over 15,000 CMOs this year to identify the top 500.
- Marketing and Data Services: Revenue for the second quarter was $194 million, roughly flat as compared to $196 million for the same period a year ago. U.S. revenue of $166 million was up 2 percent but was offset by declines internationally. Income from operations for the second quarter was $23 million, compared to $27 million in the prior period. Operating margin was 12 percent, compared to 14 percent in the previous year.
- IT Infrastructure Management: Revenue for the second quarter decreased 5 percent to $70 million, compared to $74 million for the same period a year ago. Income from operations for the quarter was $9 million, compared to $5 million in the prior period. Operating margin was approximately 12 percent, compared to 7 percent a year ago.
- Other Services: Revenue was $13 million as compared to $17 million in the prior year. Loss from operations was approximately $2 million, compared to $3 million in the prior-year period.
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. Acxiom’s estimates for fiscal 2013 are as follows:
- We continue to expect revenue to be flat to slightly down versus the prior year.
- We now expect earnings per diluted share to be roughly $0.70 as compared to our previous guidance of $0.60 to $0.65.
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_Q2_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 building momentum and future opportunities for growth. 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 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.