ACXIOM ANNOUNCES THIRD QUARTER RESULTS
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Strong operating and free cash flow results
Q3FY 2012 Financials
Q3FY 2012 Conference Slides
Q3FY 2013 Earnings Conference Call
LITTLE ROCK, Ark. – January 31, 2012 — Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for the third quarter of fiscal year 2012 ended December 31, 2011.
Revenue from continuing operations decreased approximately 2 percent in the third quarter to $281 million, compared to $288 million for the third quarter of fiscal 2011. Earnings per diluted share attributable to Acxiom stockholders were $0.10 in the current quarter, compared to earnings per share of $0.25 in the third quarter of fiscal 2011. Excluding a non-cash impairment charge and other unusual items from both periods, earnings per diluted share attributable to Acxiom stockholders were $0.22, up approximately 16 percent year over year.
Operating cash flow increased 29 percent to $83 million in the third quarter, compared to $64 million in the third quarter of fiscal 2011. Free cash flow available to equity increased 58 percent to $55 million in the third quarter, compared to $35 million in the third quarter of fiscal 2011. 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 news release.
The company re-evaluated goodwill and other intangibles associated with its Brazilian operations and as a result recorded a non-cash charge of approximately $15 million in the quarter.
A schedule is attached to this release outlining the impact of the unusual items on the current and prior-year third quarter and nine-month results.
”We are pleased with our recent progress, notably our improved cash flow and earnings, but we still have much more to accomplish,” said Acxiom Chief Executive Officer and President Scott Howe. “We have realigned and strengthened our management team, established a clear strategy and improved our operating visibility. Looking ahead, we have started the process of investing in new data analytics and product capabilities and must also seek to increase top line Marketing and Data Services growth. In addition, the team will also be focusing on improving the financial performance of our non-U.S. operations.”
Third Quarter Highlights:
- Acxiom generated free cash flow to equity of $55 million during the quarter. Of this amount, $34 million was used to prepay $25 million of the company’s term loan due March 15, 2015, and repurchase stock for $9 million. In the current fiscal year, Acxiom has repurchased 4 million shares for $43 million.
- During the quarter, Acxiom announced the sale of its background screening unit, Acxiom Information Security Services (AISS). The divestiture of AISS is part of the company’s long-term strategy of placing greater emphasis on its core database and marketing services business. As a result of the planned disposal, Acxiom is reporting results from continuing operations and discontinued operations separately. The sale is expected to close in the fourth quarter. Segment results have been realigned consistent with the company’s forward-looking strategy. Acxiom will report results from three operating segments: Marketing and Data Services, IT Infrastructure Management and Other Services.
- On January 11, 2012, Warren Jenson joined Acxiom as chief financial officer and executive vice president. Jenson has been CFO of Electronic Arts, Amazon.com, Delta Airlines and NBC. His career highlights also include being twice named as one of the best CFOs in America by Institutional Investor magazine and one of the “Bay Area CFOs of the Year” in 2010.
- Today, Acxiom announced that Nada Stirratt will be joining Acxiom as the company’s first chief revenue officer. Her responsibilities as CRO and executive vice president will include all client-facing functions, including both domestic and international sales, account management and client delivery functions. She has held top positions at MySpace as chief revenue officer and MTV Networks as executive vice president of digital advertising.
- Marketing and Data Services: Revenue for the third quarter was $188 million, down slightly compared to $189 million for the third quarter of fiscal 2011. U.S. revenue of $155 million in the third quarter was up 2 percent, but was offset by declines in the international business. Income from operations for the third quarter was $22 million, up 2 percent compared to $21 million in the third quarter of fiscal 2011. Operating margins in the U.S. increased to 14 percent from 13 percent last year, but were offset by operating losses internationally.
- IT Infrastructure Management: Revenue for the third quarter decreased 2 percent to $77 million, compared with $79 million in the third quarter of fiscal 2011. Income from operations for the third quarter was $10 million, compared to $9 million in the third quarter of fiscal 2011.
- Other Services: Revenue for the third quarter was $16 million, down from $20 million in the third quarter last year. Loss from operations for the third quarter was $1 million, down from slightly positive income from operations in the third quarter last year.
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.
Web Link to Financials
You may link to http://www.acxiom.com/FY12_Q3_Financials for the detailed financial information we typically attach to our earnings releases.
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 our plans to invest in new data analytics and product capabilities, increasing the top line in Marketing and Data Services, focusing on improving the financial performance of our non-US operations. During the conference call there will be a general discussion of a going forward strategy including the potential amount and impact of investments in research and development and measures that we anticipate taking to make the business more aligned, responsive and efficient. 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 be unable to quickly and seamlessly integrate our new chief financial and revenue officers; 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; 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, 2011, which was filed with the Securities and Exchange Commission on May 27, 2011.
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.