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.

Segment Results:

  • 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.

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.

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.

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 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.

 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
    For the Three Months Ended
December 31,
        $     %
2011 2010 Variance Variance
 
Revenue:
Marketing and data services 187,822 188,663 (841 ) (0.4 %)
IT Infrastructure management services 77,173 78,994 (1,821 ) (2.3 %)
Other services 15,898   20,248   (4,350 ) (21.5 %)
Total revenue 280,893 287,905 (7,012 ) (2.4 %)
 
Operating costs and expenses:
Cost of revenue 215,468 218,474 3,006 1.4 %
Selling, general and administrative 34,775 39,229 4,454 11.4 %
Impairment of goodwill and other intangibles 17,803 - (17,803 )
Gains, losses and other items, net (2,671 ) (3,640 ) (969 ) 26.6 %
 
Total operating costs and expenses 265,375   254,063   (11,312 ) (4.5 %)
 
Income from operations 15,518   33,842   (18,324 ) (54.1 %)
% Margin 5.5 % 11.8 %
Other income (expense):
Interest expense (3,883 ) (6,006 ) 2,123 35.3 %
Other, net (98 ) (299 ) 201 (67.2 %)
 
Total other income (expense) (3,981 ) (6,305 ) 2,324 36.9 %
 
Earnings from continuing operations before income taxes 11,537 27,537 (16,000 ) (58.1 %)
 
Income taxes 9,700   7,564   (2,136 ) (28.2 %)
 
Net earnings from continuing operations 1,837 19,973 (18,136 ) (90.8 %)
 
Earnings from discontinued operations, net of tax 814   441   373 84.6 %
 
Net earnings 2,651 20,414 (17,763 ) (87.0 %)
 
Less: Net loss attributable to noncontrolling interest (5,279 ) (409 ) (4,870 ) (1190.7 %)
 
Net earnings attributable to Acxiom 7,930   20,823   (12,893 ) (61.9 %)
 
Basic earnings per share:
Net earnings from continuing operations 0.02 0.25 (0.23 ) (92.0 %)
Earnings from discontinued operations 0.01   0.01   0.00 0.0 %
Net earnings 0.03   0.25   (0.22 ) (88.0 %)
 
Net earnings attributable to Acxiom stockholders 0.10   0.26   (0.16 ) (61.5 %)
 
 
Diluted earnings per share:
Net earnings from continuing operations 0.02 0.24 (0.22 ) (91.7 %)
Earnings from discontinued operations 0.01   0.01   0.00 0.0 %
Net earnings 0.03   0.25   (0.22 ) (88.0 %)
 
Net earnings attributable to Acxiom stockholders 0.10   0.25   (0.15 ) (60.0 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
    For the Nine Months Ended
December 31,
        $     %
2011 2010 Variance     Variance
 
Revenue:
Marketing and data services 568,824 543,200 25,624 4.7 %
IT Infrastructure management services 223,935 227,881 (3,946 ) (1.7 %)
Other services 50,610   55,448   (4,838 ) (8.7 %)
Total revenue 843,369 826,529 16,840 2.0 %
 
Operating costs and expenses:
Cost of revenue 654,384 637,545 (16,839 ) (2.6 %)
Selling, general and administrative 107,871 113,125 5,254 4.6 %
Impairment of goodwill and other intangibles 17,803 - (17,803 )
Gains, losses and other items, net 38   (3,619 ) (3,657 ) 101.1 %
 
Total operating costs and expenses 780,096   747,051   (33,045 ) (4.4 %)
 
Income from operations 63,273   79,478   (16,205 ) (20.4 %)
% Margin 7.5 % 9.6 %
Other income (expense):
Interest expense (14,057 ) (18,164 ) 4,107 22.6 %
Other, net (1,150 ) (639 ) (511 ) 80.0 %
 
Total other income (expense) (15,207 ) (18,803 ) 3,596 19.1 %
 
Earnings from continuing operations before income taxes 48,066 60,675 (12,609 ) (20.8 %)
 
Income taxes 25,291   20,819   (4,472 ) (21.5 %)
 
Net earnings from continuing operations 22,775 39,856 (17,081 ) (42.9 %)
 
Earnings from discontinued operations, net of tax 2,868   2,691   177 6.6 %
 
Net earnings 25,643 42,547 (16,904 ) (39.7 %)
 
Less: Net loss attributable to noncontrolling interest (5,554 ) (1,362 ) (4,192 ) (307.8 %)
 
Net earnings attributable to Acxiom 31,197   43,909   (12,712 ) (29.0 %)
 
Basic earnings per share:
Net earnings from continuing operations 0.28 0.50 (0.22 ) (44.0 %)
Earnings from discontinued operations 0.04   0.03   0.01 33.3 %
Net earnings 0.32   0.53   (0.21 ) (39.6 %)
 
Net earnings attributable to Acxiom stockholders 0.39   0.55   (0.16 ) (29.1 %)
 
 
Diluted earnings per share:
Net earnings from continuing operations 0.28 0.49 (0.21 ) (42.9 %)
Earnings from discontinued operations 0.04   0.03   0.01 33.3 %
Net earnings 0.32   0.52   (0.20 ) (38.5 %)
 
Net earnings attributable to Acxiom stockholders 0.39   0.54   (0.15 ) (27.8 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
    For the Three Months Ended     For the Nine Months Ended
December 31, December 31,
2011     2010 2011     2010
 
 
Earnings from continuing operations before income taxes 11,537 27,537 48,066 60,675
 
Income taxes 9,700   7,564   25,291   20,819  
 
Net earnings from continuing operations 1,837 19,973 22,775 39,856
 
Earnings from discontinued operations, net of tax 814   441   2,868   2,691  
 
Net earnings 2,651 20,414 25,643 42,547
 
Less: Net earnings (loss) attributable to noncontrolling interest (5,279 ) (409 ) (5,554 ) (1,362 )
 
Net earnings attributable to Acxiom 7,930   20,823   31,197   43,909  
 
Earnings per share attributable to Acxiom stockholders:
 
Basic 0.10   0.26   0.39   0.55  
 
Diluted 0.10   0.25   0.39   0.54  
 
Unusual items:
 
MENA disposal - - 2,512 -
Impairment of goodwill and other intangibles 17,803 - 17,803 -
Adjustment of earnout liability (2,598 ) (434 ) (2,598 ) -
Other adjustments (73 ) (3,206 ) 124   (3,619 )
 
Total unusual items 15,132   (3,640 ) 17,841   (3,619 )
 

Earnings from continuing operations before income taxes and excluding unusual items

26,669 23,897 65,907 57,056
 
Income taxes 10,649   9,532   26,341   22,796  
 
Non-GAAP earnings from continuing operations 16,020 14,365 39,566 34,260
 
Earnings from discontinued operations, net of tax 814   441   2,868   2,691  
 
Non-GAAP net earnings 16,834 14,806 42,434 36,951
 
Less: Net earnings (loss) attributable to noncontrolling interest (231 ) (409 ) (1,371 ) (1,362 )
 
Non-GAAP Net earnings attributable to Acxiom 17,065   15,215   43,805   38,313  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.22   0.19   0.55   0.48  
 
Diluted 0.22   0.19   0.54   0.47  
 
Diluted weighted average shares 79,020   82,098   80,877   81,613  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
    For the Three Months Ended     For the Nine Months Ended
December 31, December 31,
2011     2010 2011     2010
 
Income from operations 15,518 33,842 63,273 79,478
 
Unusual items 15,132 (3,640 ) 17,841 (3,619 )
 
Income from operations before unusual items 30,650 30,202   81,114 75,859  
 
 
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,
2011 2010
 
Basic earnings per share from continuing operations:
Numerator - net earnings 1,837 19,973
Denominator - weighted-average shares outstanding 78,189 80,233
Basic earnings per share 0.02 0.25
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 7,930 20,823
Denominator - weighted-average shares outstanding 78,189 80,233
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.10 0.26
 
Diluted earnings per share from continuing operations:
Numerator - net earnings 1,837 19,973
Denominator - weighted-average shares outstanding 78,189 80,233
Dilutive effect of common stock options, warrants and restricted stock 831 1,865
79,020 82,098
 
Diluted earnings per share from continuing operations 0.02 0.24
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 7,930 20,823
Denominator - weighted-average shares outstanding 78,189 80,233
Dilutive effect of common stock options, warrants, and restricted stock 831 1,865
79,020 82,098
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.10 0.25
 
 
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,
2011 2010
 
Basic earnings per share from continuing operations:
Numerator - net earnings 22,775 39,856
Denominator - weighted-average shares outstanding 80,039 80,007
Basic earnings per share 0.28 0.50
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 31,197 43,909
Denominator - weighted-average shares outstanding 80,039 80,007
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.39 0.55
 
Diluted earnings per share from continuing operations:
Numerator - net earnings 22,775 39,856
Denominator - weighted-average shares outstanding 80,039 80,007
Dilutive effect of common stock options, warrants and restricted stock 838 1,606
80,877 81,613
 
Diluted earnings per share from continuing operations 0.28 0.49
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 31,197 43,909
Denominator - weighted-average shares outstanding 80,039 80,007
Dilutive effect of common stock options, warrants, and restricted stock 838 1,606
80,877 81,613
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.39 0.54
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
    For the Three Months Ended
   
December 31, December 31,
Revenue: 2011 2010
 
Marketing and data services 187,822 188,663
IT Infrastructure management services 77,173 78,994
Other services 15,898   20,248  
 
Total revenue 280,893   287,905  
 
 
Income from continuing operations:
 
Marketing and data services 21,819 21,361
IT Infrastructure management services 9,795 8,588
Other services (964 ) 253
Corporate (15,132 ) 3,640  
 
Total income from continuing operations 15,518   33,842  
 
Margin:
 
Marketing and data services 11.6 % 11.3 %
IT Infrastructure management services 12.7 % 10.9 %
Other services -6.1 % 1.2 %
 
Total margin 5.5 % 11.8 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
    For the Nine Months Ended
   
December 31, December 31,
Revenue: 2011 2010
 
Marketing and data services 568,824 543,200
IT Infrastructure management services 223,935 227,881
Other services 50,610   55,448  
 
Total revenue 843,369   826,529  
 
 
Income from operations:
 
Marketing and data services 66,418 58,085
IT Infrastructure management services 19,133 18,973
Other services (4,437 ) (1,199 )
Corporate (17,841 ) 3,619  
 
Total income from operations 63,273   79,478  
 
Margin:
 
Marketing and data services 11.7 % 10.7 %
IT Infrastructure management services 8.5 % 8.3 %
Other services -8.8 % -2.2 %
 
Total margin 7.5 % 9.6 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
 
    December 31,     March 31,     $     %
2011 2011 Variance     Variance

Assets

Current assets:
Cash and cash equivalents 145,863 206,973 (61,110 ) (29.5 %)
Trade accounts receivable, net 170,735 171,252 (517 ) (0.3 %)
Deferred income taxes 11,516 12,480 (964 ) (7.7 %)
Refundable income taxes - 7,402 (7,402 ) 100.0 %
Other current assets 52,045 55,668 (3,623 ) 100.0 %
Assets of discontinued operations 28,440   27,141   1,299 4.8 %
 
Total current assets 408,599   480,916   (72,317 ) (15.0 %)
 
Property and equipment 908,367 886,967 21,400 2.4 %
Less - accumulated depreciation and amortization 654,392   632,297   22,095 3.5 %
 
Property and equipment, net 253,975   254,670   (695 ) (0.3 %)
 
Software, net of accumulated amortization 14,468 26,030 (11,562 ) (44.4 %)
Goodwill 380,834 397,349 (16,515 ) (4.2 %)
Purchased software licenses, net of accumulated amortization 27,833 38,472 (10,639 ) (27.7 %)
Deferred costs, net 65,760 81,837 (16,077 ) (19.6 %)
Data acquisition costs 14,612 17,627 (3,015 ) (17.1 %)
Other assets, net 4,406   9,724   (5,318 ) (54.7 %)
 
1,170,487   1,306,625   (136,138 ) (10.4 %)
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 27,852 27,978 126 0.5 %
Trade accounts payable 28,513 27,530 (983 ) (3.6 %)
Accrued payroll and related expenses 41,566 41,784 218 0.5 %
Other accrued expenses 66,215 73,840 7,625 10.3 %
Deferred revenue 69,838 55,921 (13,917 ) (24.9 %)
Income taxes 2,144 - (2,144 )
Liabilities of discontinued operations 2,849   2,441   (408 ) (16.7 %)
 
Total current liabilities 238,977   229,494   (9,483 ) (4.1 %)
 
Long-term debt 256,975 394,260 137,285 34.8 %
 
Deferred income taxes 86,767 84,360 (2,407 ) (2.9 %)
 
Other liabilities 3,983 7,478 3,495 46.7 %
 
Stockholders' equity:
Common stock 11,953 11,777 176 1.5 %
Additional paid-in capital 854,325 837,439 16,886 2.0 %
Retained earnings 490,293 459,096 31,197 6.8 %
Accumulated other comprehensive income 11,995 15,991 (3,996 ) (25.0 %)
Treasury stock, at cost (785,082 ) (739,125 ) (45,957 ) 6.2 %
Total Acxiom stockholders' equity 583,484 585,178 (1,694 ) (0.3 %)
Noncontrolling interest 301   5,855   (5,554 ) (94.9 %)
 
Total equity 583,785   591,033   (7,248 ) (1.2 %)
 
1,170,487   1,306,625   (136,138 ) (10.4 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
    For the Three Months Ended
December 31,
2011     2010
 
Cash flows from operating activities:
Net earnings 2,651 20,414
Non-cash operating activities:
Depreciation and amortization 32,986 34,880
Gain on disposal or impairment of assets (2,710 ) (317 )
Impairment of goodwill and other intangibles 17,803 -
Deferred income taxes 1,404 302
Non-cash stock compensation expense 1,710 3,437
Changes in operating assets and liabilities:
Accounts receivable 6,913 585
Other assets 4,390 3,561
Deferred costs (1,048 ) (5,786 )
Accounts payable and other liabilities 1,320 (3,626 )
Deferred revenue 17,121   10,780  
Net cash provided by operating activities 82,540   64,230  
Cash flows from investing activities:
Capitalized software (1,647 ) (1,025 )
Capital expenditures (14,436 ) (16,322 )
Data acquisition costs (3,999 ) (3,765 )
Payments received from investments 370   -  
Net cash used by investing activities (19,712 ) (21,112 )
Cash flows from financing activities:
Payments of debt (31,993 ) (41,522 )
Sale of common stock 4,500 2,503
Acquisition of treasury stock (8,727 ) -
Proceeds from partner's contributions -   347  
Net cash used by financing activities (36,220 ) (38,672 )
Effect of exchange rate changes on cash 142   106  
 
Net change in cash and cash equivalents 26,750 4,552
Cash and cash equivalents at beginning of period 119,113   199,334  
Cash and cash equivalents at end of period 145,863   203,886  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 4,160 6,052
Income taxes 9,784 1,913
Payments on capital leases and installment payment arrangements 4,709 5,726
Payments on software and data license liabilities 125 120
Other debt payments, excluding line of credit 2,159 2,143
Prepayment of debt 25,000 33,533
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

4,042 4,779
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
    For the Nine Months Ended
December 31,
2011     2010
 
Cash flows from operating activities:
Net earnings 25,643 42,547
Non-cash operating activities:
Depreciation and amortization 103,240 108,586
Loss (gain) on disposal or impairment of assets 183 (272 )
Impairment of goodwill and other intangibles 17,803 -
Deferred income taxes 2,539 4,245
Non-cash stock compensation expense 6,910 9,897
Changes in operating assets and liabilities:
Accounts receivable (2,763 ) (7,913 )
Other assets (202 ) (4,590 )
Deferred costs (1,879 ) (28,407 )
Accounts payable and other liabilities 7,391 (11,653 )
Deferred revenue 14,143   11,744  
Net cash provided by operating activities 173,008   124,184  
Cash flows from investing activities:
Disposition of operations (1,043 ) -
Capitalized software (3,167 ) (3,592 )
Capital expenditures (39,147 ) (46,808 )
Data acquisition costs (8,549 ) (10,716 )
Payments from investments 370 175
Net cash paid in acquisitions (255 ) (12,927 )
Net cash used by investing activities (51,791 ) (73,868 )
Cash flows from financing activities:
Payments of debt (145,768 ) (78,089 )
Sale of common stock 7,318 7,323
Acquisition of treasury stock (42,827 ) -
Proceeds from partner's contributions - 480
Contingent consideration paid for prior acquisitions (326 ) -  
Net cash used by financing activities (181,603 ) (70,286 )
Effect of exchange rate changes on cash (724 ) (198 )
 
Net change in cash and cash equivalents (61,110 ) (20,168 )
Cash and cash equivalents at beginning of period 206,973   224,054  
Cash and cash equivalents at end of period 145,863   203,886  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 15,491 17,728
Income taxes 15,171 22,995
Payments on capital leases and installment payment arrangements 13,687 17,105
Payments on software and data license liabilities 616 1,177
Other debt payments, excluding line of credit 6,465 6,274
Prepayment of debt 125,000 53,533
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

8,733 22,429
 
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
 
           
06/30/10     09/30/10     12/31/10     03/31/11     FY2011 06/30/11     09/30/11     12/31/11     FY2012
                           
Net cash provided by operating activities 16,988 42,966 64,230 42,035 166,219 32,754 57,714 82,540 173,008
 
Less:
Capitalized software (1,226 ) (1,341 ) (1,025 ) (963 ) (4,555 ) (529 ) (991 ) (1,647 ) (3,167 )
Capital expenditures (8,752 ) (21,734 ) (16,322 ) (12,213 ) (59,021 ) (12,577 ) (12,134 ) (14,436 ) (39,147 )
Data acquisition costs (4,326 ) (2,625 ) (3,765 ) (2,650 ) (13,366 ) (2,776 ) (1,774 ) (3,999 ) (8,549 )
Payments on capital leases and installment payment arrangements (5,968 ) (5,411 ) (5,726 ) (5,252 ) (22,357 ) (4,794 ) (4,184 ) (4,709 ) (13,687 )
Payments on software and data license liabilities (893 ) (164 ) (120 ) (4,139 ) (5,316 ) (367 ) (124 ) (125 ) (616 )
Other required debt payments (2,103 )     (2,028 )     (2,143 )     (2,154 )     (8,428 ) (2,151 )     (2,155 )     (2,159 )     (6,465 )
 
Total (6,280 )     9,663       35,129       14,664       53,176   9,560       36,352       55,465       101,377  
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
                Q3 FY11 to Q3 FY12
06/30/10     09/30/10     12/31/10     03/31/11     FY2011 06/30/11     09/30/11     12/31/11     YTD FY2012 %     $
Revenue:                                
Marketing and data services 168,622 185,915 188,663 192,906 736,106 185,058 195,944 187,822 568,824 -0.4 % (841 )
IT Infrastructure management services 73,138 75,749 78,994 74,750 302,631 73,050 73,712 77,173 223,935 -2.3 % (1,821 )
Other services 17,419       17,781       20,248       19,570       75,018   17,936       16,776       15,898       50,610   -21.5 %     (4,350 )
Total revenue 259,179 279,445 287,905 287,226 1,113,755 276,044 286,432 280,893 843,369 -2.4 % (7,012 )
 
Operating costs and expenses:
Cost of revenue 202,800 216,271 218,474 215,619 853,164 219,804 219,112 215,468 654,384 1.4 % 3,006
Selling, general and administrative 35,798 38,098 39,229 38,017 151,142 35,292 37,804 34,775 107,871 11.4 % 4,454
Impairment of goodwill and other intangibles - - - 79,674 79,674 - - 17,803 17,803 (17,803 )
Gains, losses and other items, net (57 )     78       (3,640 )     8,219       4,600   244       2,465       (2,671 )     38   26.6 %     (969 )
 
Total operating costs and expenses 238,541 254,447 254,063 341,529 1,088,580 255,340 259,381 265,375 780,096 -4.5 % (11,312 )
 
Income (loss) from operations 20,638 24,998 33,842 (54,303 ) 25,175 20,704 27,051 15,518 63,273 -54.1 % (18,324 )
% Margin8.0%8.9%11.8%-18.9%2.3%7.5%9.4%5.5%7.5%
Other income (expense)
Interest expense (5,898 ) (6,260 ) (6,006 ) (5,659 ) (23,823 ) (5,455 ) (4,719 ) (3,883 ) (14,057 ) -35.3 % 2,123
Other, net (451 )     111       (299 )     (827 )     (1,466 ) (87 )     (965 )     (98 )     (1,150 ) -67.2 %     201  
Total other income (expense) (6,349 ) (6,149 ) (6,305 ) (6,486 ) (25,289 ) (5,542 ) (5,684 ) (3,981 ) (15,207 ) -36.9 % 2,324
 
Earnings from continuing operations before income taxes 14,289 18,849 27,537 (60,789 ) (114 ) 15,162 21,367 11,537 48,066 -58.1 % (16,000 )
Income taxes 5,716       7,539       7,564       10,905       31,724   6,063       9,528       9,700       25,291   -28.2 %     (2,136 )
 
Net earnings from continuing operations 8,573 11,310 19,973 (71,694 ) (31,838 ) 9,099 11,839 1,837 22,775 -90.8 % (18,136 )
 
Earnings from discontinued operations, net of tax 863       1,387       441       705       3,396   916       1,138       814       2,868   84.6 %     373  
 
Net Earnings 9,436 12,697 20,414 (70,989 ) (28,442 ) 10,015 12,977 2,651 25,643 -87.0 % (17,763 )
 
Less: Net earnings (loss) attributable
to noncontrolling interest (369 )     (584 )     (409 )     (3,933 )     (5,295 ) (960 )     685       (5,279 )     (5,554 ) 1190.7 %     (4,870 )
 
Net earnings (loss) attributable to Acxiom 9,805       13,281       20,823       (67,056 )     (23,147 ) 10,975       12,292       7,930       31,197   -61.9 %     (12,893 )
 

Diluted earnings per share - net earnings (loss) attributable to Acxiom stockholders

0.12       0.16       0.25       (0.83 )     0.29   0.13       0.15       0.10       0.39   -60.0 %     (0.15 )
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
           
06/30/10     09/30/10     12/31/10     03/31/11     FY2011 06/30/11     09/30/11     12/31/11     YTD FY2012
                           
Revenue:
 
Marketing and data services 168,622 185,915 188,663 192,906 736,106 185,058 195,944 187,822 568,824
IT Infrastructure management services 73,138 75,749 78,994 74,750 302,631 73,050 73,712 77,173 223,935
Other services 17,419       17,781       20,248       19,570       75,018   17,936       16,776       15,898       50,610  
 
Total revenue 259,179       279,445       287,905       287,226       1,113,755   276,044       286,432       280,893       843,369  
 
Income from operations:
 
Marketing and data services 15,360 21,364 21,361 29,169 87,254 17,339 27,260 21,819 66,418
IT Infrastructure management services 5,835 4,550 8,588 5,494 24,467 4,247 5,091 9,795 19,133
Other services (614 ) (838 ) 253 (1,073 ) (2,272 ) (638 ) (2,835 ) (964 ) (4,437 )
Corporate 57       (78 )     3,640       (87,893 )     (84,274 ) (244 )     (2,465 )     (15,132 )     (17,841 )
 
Total income (loss) from operations 20,638       24,998       33,842       (54,303 )     25,175   20,704       27,051       15,518       63,273  
 
Margin:
 
Marketing and data services 9.1 % 11.5 % 11.3 % 15.1 % 11.9 % 9.4 % 13.9 % 11.6 % 11.7 %
IT Infrastructure management services 8.0 % 6.0 % 10.9 % 7.3 % 8.1 % 5.8 % 6.9 % 12.7 % 8.5 %
Other services -3.5 % -4.7 % 1.2 % -5.5 % -3.0 % -3.6 % -16.9 % -6.1 % -8.8 %
 
Total 8.0 % 8.9 % 11.8 % -18.9 % 2.3 % 7.5 % 9.4 % 5.5 % 7.5 %
 

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Acxiom Investor Relations
Katharine Boyce, 501-342-1321
investor.relations@acxiom.com
EACXM