Acxiom Announces First-Quarter Results; Company ``on track for successful fiscal year,'' Morgan says.LITTLE ROCK, Ark. -- Acxiom Acxiom is a customer and data information management company, offering a range of products and services including information technology outsourcing. It has been described as "one of the biggest companies you've never heard of. (R) Corporation (Nasdaq: ACXM) today announced financial results for the first quarter of fiscal 2005 ended June June: see month. 30, 2004. Revenue of $289.0 million, income from operations of $25.4 million, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings of $20.8 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.14 represent significant improvements compared to the same quarter a year ago. Acxiom will hold a conference call at 4:30 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.acxiom.com. "Our solid first-quarter performance puts us on track for a successful year and is in line with our Financial Road Map," Company Leader Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by D. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. said. "We are pleased with the progress of our major initiatives - from the results of our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. acquisitions to the continued deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of our Customer Information Infrastructure (CII CII Confederation of Indian Industry CII Chartered Insurance Institute (UK) CII Construction Industry Institute (University of Texas) CII Council of Institutional Investors ) and the launch of our Delivery Center Organization." Highlights of Acxiom's first-quarter performance include: --Revenue of $289.0 million, up 22 percent from $236.7 million in the first quarter a year ago. The net impact of acquisitions and divestitures contributed 13 percentage points of this 22 percentage-point growth in revenue. --Income from operations of $25.4 million, an increase of 126 percent compared to $11.2 million in the first quarter a year ago. --Pre-tax earnings of $20.8 million, an increase of 187 percent compared to $7.2 million in the first quarter a year ago. --Diluted earnings per share of $.14, up 8 percent from $.13 the year before. Last year's first-quarter earnings benefited from an income tax adjustment of $6.7 million ($.07 per share). --Operating cash flow of $34.7 million and free cash flow of $19.2 million. The free cash flow of $19.2 million is a non-GAAP financial measure and a reconciliation to the comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure, operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , is attached to this press release. --New contracts that will deliver $17 million in annual revenue and renewals that total $10 million in annual revenue. --Committed new deals in the pipeline that are expected to generate $58 million in annual revenue. Morgan noted that Acxiom completed contracts in the quarter with several key clients, including Columbia Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. House, American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Business Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Alliance Data Systems and Lenox Lenox, town (1990 pop. 5,069), Berkshire co., W Mass., in the Berkshire Mts., 7 mi (11 km) south of Pittsfield. It is primarily a summer resort. The Berkshire Festival, one of the country's premier music festivals, is held annually on the Tanglewood estate, which Inc. Outlook The Company's expectations are communicated in the Financial Road Map, which includes a chart summarizing the one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants and long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. as well as an explanation of the assumptions and definitions that accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. these goals. There are no changes to the previously released financial projections in the Financial Road Map, which has been updated for the first quarter's financial results. The financial projections stated today are based on the Company's current expectations. These projections are forward looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed in the future. About Acxiom Acxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration (CDI CDI compact disc interactive: a system for storing a mix of software, data, audio, and compressed video for interactive use under processor control ) technology, data, database services, IT outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. , consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas Little Rock, Arkansas required military intervention to desegregate schools (1957–1958). [Am. Hist.: Van Doren, 556–557] See : Bigotry , with locations throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , and in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and
Japan.This release (including references to the Financial Road Map) and the scheduled conference call include a discussion of non-GAAP financial measures. Whenever the Company reports non-GAAP financial measures, there is reconciliation to the comparable GAAP measure attached to the press release. This release and today's conference call contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such statements include but are not necessarily limited to the following: that the projected revenue, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). and return on invested capital, operating cash flow and free cash flow, borrowings and dividends referred to in the Financial Road Map will be within the estimated ranges; that the company is on track for a successful year and is currently operating in line with the Financial Road Map; that the business pipeline and our current cost structure will allow us to continue to meet or exceed revenue, cash flow and other projections; that new contracts and contract renewals will generate the indicated amounts of revenue; that we have committed new deals in the pipeline that are expected to deliver the indicated amounts; that we are well positioned for success and improving margins going forward; that future results will be within the indicated ranges; that new products and services will produce the expected results. The following are important factors, among others, that could cause actual results to differ materially from these forward-looking statements: The possibility that certain contracts may not be closed, or may not be closed within the anticipated time frames; the possibility that certain contracts may not generate the anticipated revenue or profitability; the possibility that negative changes in economic or other conditions might lead to a reduction in demand for our products and services; the possibility that the recovery from the previous three years' economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. may take longer than expected or that economic conditions in general will not be as expected; the possibility that significant customers may experience extreme, severe economic difficulty; the possibility that the fair value of certain of our assets may not be equal to the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of those assets now or in future time periods; the possibility that sales cycles may lengthen length·en tr. & intr.v. length·ened, length·en·ing, length·ens To make or become longer. length  en·er n. ; the
possibility that we may not be able to attract and retain qualified
technical and leadership associates, or that we may lose key associates
to other organizations; the possibility that we won't won't Contraction of will not. won't will not won't will be able to properly motivate our sales force or other associates; the possibility that we won't be able to achieve cost reductions and avoid unanticipated costs; the possibility that we won't be able to continue to receive credit upon satisfactory terms and conditions; the possibility that competent Possessing the necessary reasoning abilities or legal qualifications; qualified; capable; sufficient. A court is competent if it has been given jurisdiction, by statute or constitution, to hear particular types of lawsuits. , competitive products, technologies or services will be introduced into the marketplace by other companies; the possibility that we may be subjected to pricing pressure due to market conditions and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. competitive products and services; the possibility that there will be changes in consumer or business information industries and markets; the possibility that we won't be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there will be changes in the legislative, accounting, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and consumer environments affecting our business, including but not limited to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , legislation, regulations and customs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our ability to collect, manage, aggregate and use data; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services; the possibility that we may enter into short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. contracts which would affect the predictability of our revenues; the possibility that the amount of ad hoc For this purpose. Meaning "to this" in Latin, it refers to dealing with special situations as they occur rather than functions that are repeated on a regular basis. See ad hoc query and ad hoc mode. , volume-based and project work will not be as expected; the possibility that we may experience a loss of data center capacity or interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. of telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. links or power sources; the possibility that postal Postal can refer to:
tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. ; the possibility that the integration of our recently acquired businesses may not be as successful as planned; and the possibility that we may be affected by other competitive factors. With respect to the Financial Road Map exhibit, all of the above factors apply, along with the following which were assumptions made in creating the Financial Road Map: that the U.S. and global economies will continue to improve at a moderate pace, that global growth will continue to be strong and that globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation trends will continue to grow at an increasing pace; relating to Operating Margin, that 1) Acxiom's computer and communications related expenses will continue to fall as a percentage of revenue, 2) that the Customer Information Infrastructure (CII) grid-based environment Acxiom has begun to implement will continue to be implemented successfully over the next 3-4 years and that the new CII infrastructure will continue to provide increasing operational efficiencies, 3) that the recent acquisitions of Claritas Europe and Consodata Europe will be successfully integrated and that significant efficiencies will be realized from this integration; relating to Operating Cash Flow and Free Cash Flow, that sufficient operating and capital lease arrangements will continue to be available to the Company to provide for the financing of most of its computer equipment and that software suppliers will continue to provide financing arrangements for most of the software purchases; relating to Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Line Balance, that free cash flow will meet expectations and that the Company will continue to use free cash flow to pay down bank debt, buy back stock and fund dividends; relating to Annual Dividends, that the Board of Directors will continue to approve quarterly dividends and will vote to increase dividends over time; relating to Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Shares, that the Company will meet its cash flow expectations and that potential dilution potential dilution The decrease in the proportional equity position of a share of stock that will occur eventually if additional authorized shares are actually issued. created through the issuance of stock options and warrants will be mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by continued stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Company's stock repurchase program. With respect to the provision of products or services outside our primary base of operations Noun 1. base of operations - installation from which a military force initiates operations; "the attack wiped out our forward bases" base air base, air station - a base for military aircraft army base - a large base of operations for an army in the U.S., all of the above factors apply, along with the difficulty of doing business in numerous sovereign SOVEREIGN. A chief ruler with supreme power; one possessing sovereignty. (q.v.) It is also applied to a king or other magistrate with limited powers. 2. In the United States the sovereignty resides in the body of the people. Vide Rutherf. Inst. 282. jurisdictions due to differences in culture, laws and regulations. Other factors are detailed from time to time in our periodic reports and registration statements filed with the United States Securities and Exchange Commission. We believe that we have the product and technology offerings, facilities, associates and competitive and financial resources for continued business success, but future revenues, costs, margins and profits are all influenced by a number of factors, including those discussed above, all of which are inherently difficult to forecast. We undertake no obligation to update the information contained in this press release, including the Financial Road Map 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
June 30,
--------------------------
2004 2003
--------------------------
Revenue:
Services 207,847 192,514
Data 81,147 44,168
--------- ---------
Total revenue 288,994 236,682
Operating costs and expenses:
Cost of revenue
Services 166,907 158,755
Data 49,176 34,637
--------- ---------
Total cost of revenue 216,083 193,392
Selling, general and administrative 47,814 33,064
Gains, losses and nonrecurring items,
net (344) (1,008)
--------- ---------
Total operating costs and expenses 263,553 225,448
--------- ---------
Income from operations 25,441 11,234
--------- ---------
Other income (expense):
Interest expense (5,070) (4,765)
Other, net 409 765
--------- ---------
Total other income (expense) (4,661) (4,000)
--------- ---------
Earnings before income taxes 20,780 7,234
Income taxes 7,896 (4,029)
--------- ---------
Net earnings 12,884 11,263
========= =========
Earnings per share:
Basic 0.15 0.13
========= =========
Diluted 0.14 0.13
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
June 30,
---------------------------
2004 2003
---------------------------
Basic earnings per share:
Numerator - net earnings 12,884 11,263
Denominator - weighted-average shares
outstanding 86,084 86,442
--------- ---------
Basic earnings per share 0.15 0.13
========= =========
Diluted earnings per share:
Numerator:
Net earnings 12,884 11,263
Interest expense on convertible
bonds (net of tax benefit) 1,017 1,026
--------- ---------
13,901 12,289
--------- ---------
Denominator:
Weighted-average shares
outstanding 86,084 86,442
Dilutive effect of common stock
options and warrants 3,954 1,603
Dilutive effect of convertible
debt 9,589 9,589
--------- ---------
99,627 97,634
--------- ---------
Diluted earnings per share 0.14 0.13
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
REVENUES BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
June 30,
----------------------------
2004 2003
----------------------------
US Services & Data 174,964 163,009
International Services & Data 53,442 13,583
IT Management 63,269 61,045
Intercompany eliminations (2,681) (955)
--------- ---------
Total Revenue 288,994 236,682
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
June 30, March 31,
2004 2004
---------- ----------
Assets
------
Current assets:
Cash and cash equivalents $ 11,214 $ 14,355
Trade accounts receivable, net 231,488 212,387
Deferred income taxes 15,670 14,032
Refundable income taxes 1,162 2,280
Other current assets 44,384 43,272
---------- ----------
Total current assets 303,918 286,326
---------- ----------
Property and equipment 511,710 521,064
Less - accumulated depreciation and
amortization 231,883 253,976
---------- ----------
Property and equipment, net 279,827 267,088
---------- ----------
Software, net of accumulated amortization 62,450 64,553
Goodwill 299,319 282,971
Purchased software licenses, net of
accumulated amortization 153,818 157,217
Unbilled and notes receivable, excluding
current portions 14,858 13,030
Deferred costs, net 85,619 88,096
Data acquisition costs 34,527 36,557
Other assets, net 19,728 19,946
---------- ----------
$1,254,064 $1,215,784
========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current installments of long-term
obligations 71,072 73,245
Trade accounts payable 50,286 41,527
Accrued merger, integration and impairment
costs 371 2,881
Accrued payroll and related expenses 26,336 23,979
Other accrued expenses 67,735 63,411
Deferred revenue 80,550 91,060
---------- ----------
Total current liabilities 296,350 296,103
---------- ----------
Long-term obligations:
Long-term debt and capital leases, net of
current installments 258,138 239,327
Software and data licenses, net of current
installments 45,829 54,130
---------- ----------
Total long-term obligations 303,967 293,457
---------- ----------
Deferred income taxes 49,568 39,008
Commitments and contingencies
Stockholders' equity:
Common stock 9,324 9,226
Additional paid-in capital 380,499 361,256
Retained earnings 317,922 308,487
Accumulated other comprehensive loss 2,108 2,940
Treasury stock, at cost (105,674) (94,693)
---------- ----------
Total stockholders' equity 604,179 587,216
---------- ----------
$1,254,064 $1,215,784
========== ==========
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF FREE CASH FLOW TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
Qtr ended Qtr ended Qtr ended Qtr ended Yr ended
6/30/2001 9/30/2001 12/31/2001 3/31/2002 3/31/2002
Net cash
provided by
operating
activities (39,280) 69,300 60,493 60,092 150,605
Proceeds
received from
disposition
of assets 127 - - 46 173
Capitalized
software (5,935) (5,464) (5,832) (6,890) (24,121)
Capital
expenditures (8,789) - (2,612) (3,474) (14,875)
Deferral of
costs (8,690) (18,012) (14,077) (7,352) (48,131)
Proceeds from
sale and
leaseback
transaction - 1,964 4,035 - 5,999
---------- ---------- ----------- ---------- ----------
Free cash
flow (62,567) 47,788 42,007 42,422 69,650
========== ========== =========== ========== ==========
Qtr ended Qtr ended Qtr ended Qtr ended Yr ended
6/30/2002 9/30/2002 12/31/2002 3/31/2003 3/31/2003
Net cash
provided by
operating
activities 60,243 53,446 76,992 63,112 253,793
Proceeds
received from
disposition
of assets 45 155 - 93 293
Capitalized
software (8,652) (8,958) (8,726) (8,237) (34,573)
Capital
expenditures (1,916) (3,000) (5,893) (2,403) (13,212)
Deferral of
costs (3,240) (4,108) (3,796) (3,883) (15,027)
Proceeds from
sale and
leaseback
transaction - 7,729 - - 7,729
---------- ---------- ----------- ---------- ----------
Free cash
flow 46,480 45,264 58,577 48,682 199,003
========== ========== =========== ========== ==========
Qtr ended Qtr ended Qtr ended Qtr ended Yr ended
6/30/2003 9/30/2003 12/31/2003 3/31/2004 3/31/2004
Net cash
provided by
operating
activities 48,125 49,909 79,282 82,567 259,883
Proceeds
received from
disposition
of assets 506 192 39 2,046 2,783
Capitalized
software (6,335) (7,296) (6,510) (7,703) (27,844)
Capital
expenditures (1,588) (3,036) (7,637) (9,917) (22,178)
Deferral of
costs (6,026) (4,006) (5,312) (9,537) (24,881)
---------- ---------- ----------- ---------- ----------
Free cash
flow 34,682 35,763 59,862 57,456 187,763
========== ========== =========== ========== ==========
Qtr ended
6/30/2004
Net cash
provided by
operating
activities 34,714
Proceeds
received from
disposition
of assets -
Capitalized
software (4,107)
Capital
expenditures (1,823)
Deferral of
costs (9,610)
----------
Free cash
flow 19,174
==========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three
Months Ended
June 30,
-----------------
2004 2003
-----------------
Cash flows from operating activities:
Net earnings (loss) 12,884 11,263
Non-cash operating activities:
Depreciation and amortization 43,997 33,896
Loss on disposal or impairment of assets, net - (1,008)
Deferred income taxes 8,849 (6,742)
Changes in operating assets and liabilities:
Accounts receivable (18,661) 6,009
Other assets (1,012) 2,061
Accounts payable and other liabilities (8,833) 2,785
Merger, integration and impairment costs (2,510) (139)
-------- --------
Net cash provided by operating activities 34,714 48,125
-------- --------
Cash flows from investing activities:
Proceeds received from the disposition of
operations - 7,684
Proceeds received from the disposition of
assets - 506
Capitalized software (4,107) (6,335)
Capital expenditures (1,823) (1,588)
Investments in joint ventures and other
companies - (5,000)
Deferral of costs (9,610) (6,026)
Payments received from investments 284 1,201
Net cash paid in acquisitions (5,560) -
-------- --------
Net cash used by investing activities (20,816) (9,558)
-------- --------
Cash flows from financing activities:
Proceeds from debt 38,926 53,187
Payments of debt (60,560) (60,655)
Dividends paid (3,449) -
Sale of common stock 19,317 2,850
Acquisition of treasury stock (10,971) (34,665)
-------- --------
Net cash used by financing activities (16,737) (39,283)
-------- --------
Effect of exchange rate changes on cash (302) 87
-------- --------
Net increase (decrease) in cash and cash
equivalents (3,141) (629)
Cash and cash equivalents at beginning of period 14,355 5,491
-------- --------
Cash and cash equivalents at end of period 11,214 4,862
======== ========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 3,334 3,508
Income taxes 100 977
Noncash investing and financing activities:
Acquisition of land in exchange for debt - 2,698
Acquisition of data under long-term obligation - 18,340
Enterprise software licenses acquired under
long-term obligation 2,685 8,221
Acquisition of property and equipment under
capital lease 20,498 16,803
Construction of assets under construction loan 6,788 -
======== ========
ACXIOM CORPORATION
Financial Road Map (1)
----------------------
(as of July 20, 2004)
The Financial Road Map has been updated to show actual results for Q1
of fiscal 2005. The target for Fiscal 2005 and the long-term goals
for fiscal 2008 have not changed.
------------ ------------- ------------- ---------------
Years Ending Actual (2) Actual (3) Q1 Target Long-Term Goals
March 31, Fiscal 2004 Fiscal 2005 Fiscal 2005 Fiscal 2008
------------ ------------- ------------- ---------------
U.S. Revenue 7.0% to 10.0%
Growth 2.7% 5.6% 7.0% to 11.0% (CAGR)
U.S. $926 $236 $991 to $1,028
Revenue million million million -
International
Revenue 14.0% to 18.0%
Growth 51.3% 293.4% - (CAGR)
International $85 $53 $220 to $261
Revenue million million million -
U.S. Operating
Margin 9.8% 9.6% 11.5% to 12.0% 15.0% to 16.0%
International
Operating
Margin 3.1% 5.3% 8.0% to 11.0% 18.0% to 20.0%
Return on
Assets 8.2% 9.1%(4) 10.0% to 12.0% 14.0% to 16.0%
Return on
Invested
Capital 9.4% 10.5%(4) 12.0% to 14.0% 16.0% to 19.0%
Operating Cash $260 $35 $220 to $260 $220 to $260
Flow million million million million
Free Cash $188 $19 $160 to $180 $160 to $180
Flow million million million million
Revolving $16 $20 Less than $150 Less than $200
Credit Line million million million million
Balance
Dividends Per
Share $0.04(5) $0.04 $0.16 $0.20 to $0.24
(1) Assumptions and definitions are defined on the following schedule:
"Financial Road Map assumptions and definitions"
(2) The Fiscal 2004 results include $0.9 million expense recorded in
gains, losses and nonrecurring items, net and $2.8 million related
to a write-down of a third-party software package.
(3) Results for the trailing 4 quarters ending Q1 of Fiscal 2005
include $0.9 million expense recorded in gains, losses and
nonrecurring items, net a $2.8 million write-down of a third-party
software package, a $0.9 million recovery of a previous charge
relating to Wards and $0.5 million in additional restructuring
expenses.
(4) ROA and ROIC for Q1 of Fiscal 2005 are calculated on a trailing 4
quarters basis.
(5) Acxiom declared its first quarterly dividend in the fourth quarter
of Fiscal 2004.
ACXIOM CORPORATION
Financial Road Map Assumptions and Definitions
----------------------------------------------
Assumptions
-----------
1. The effective tax rate is projected to be approximately 38% for
future years.
2. Investing activities (including capital expenditures, deferred
costs and capitalized software) will be $60 million to $80
million for each of the years presented.
3. Interest rates will remain at approximately the current levels.
4. The Company will utilize all of its tax loss carry forwards and
begin to pay U.S. federal and state income taxes during FY06.
5. The Company will pay incentives under its bonus plan of
approximately $15 million to $25 million for each of the years
beginning in fiscal 2005.
6. The Company will maintain a relatively constant mix of business
for each of our three business segments.
7. Foreign exchange rates will remain at approximately the current
levels.
8. Stock repurchases will be in amounts that yield the highest
shareholder return considering all other uses for the available
cash.
9. Diluted outstanding shares will increase slightly to reflect the
impact of in-the-money options as the stock price increases.
10. Long-term goals are based on the Company's current assessment of
opportunities and are subject to change. There are risks
associated with obtaining these goals which are explained under
forward looking statements in the press release accompanying this
Financial Road Map. Acxiom disclaims any obligation to update
the information contained in this Financial Road Map.
Definitions
-----------
1. Revenue Growth is defined as the percentage growth compared to the
previous corresponding fiscal year or quarter.
2. Operating Margin is defined as the income from operations as a
percentage of revenue.
3. Return on Assets (ROA) is defined as income from operations
divided by average total assets for the trailing four quarters.
4. Return on Invested Capital (ROIC) is defined as income from
operations adjusted for the implied interest expense included in
operating leases divided by the trailing four quarters' average
invested capital. The implied interest adjustment for operating
leases is calculated by multiplying the average quarterly
balances of the present value of operating leases ((beginning
balance + ending balance)/2) x an 8% implied interest rate on
the leases. Average invested capital is defined as the trailing
four-quarter average of the ending quarterly balances for total
assets less cash, less non-interest bearing liabilities, plus the
present value of operating leases.
5. Operating Cash Flow is as shown on the Company's cash flow
statement.
6. Free Cash Flow is defined as cash flow from operating activities
less cash flow from investing activities excluding net cash paid
or received for acquisitions and divestitures, joint ventures and
investments.
7. Revolving Credit Line Balance is defined as actual funds borrowed
under the Company's revolving line of credit facility at the end
of the period.
8. Annual Dividends Per Share is defined as the sum of the four
quarterly dividends for that fiscal year.
ACXIOM CORPORATION
Reconciliation of Non-GAAP Measurements
---------------------------------------
(Dollars in thousands)
-------- -------- ------------------- -------------------
Actual Actual Q1 Target Long-Term Goals
Years Ending Fiscal Fiscal Fiscal Fiscal
March 31, 2004 2005 2005 2008
-------- -------- ------------------- -------------------
Free Cash Flow
--------------
Net cash
provided by
operating
activities 259,883 34,714 220,000 260,000 220,000 260,000
Proceeds
received
from
disposition
of assets 2,783 0 0 0 0 0
Capitalized
software (27,844) (4,107) (26,000) (28,000) (26,000) (28,000)
Capital
expendi-
tures (22,178) (1,823) (16,000) (25,000) (16,000) (25,000)
Deferral of
costs (24,881) (9,610) (18,000) (27,000) (18,000) (27,000)
Proceeds
from sale
and
leaseback
transaction 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Free cash
flow 187,763 19,174 160,000 to 180,000 160,000 to 180,000
======== ======== ======== ======== ======== ========
Free cash flow as defined by the Company may not be comparable to
similarly titled measures reported by other companies. Management of
the Company has included free cash flow in this Financial Road Map
because although free cash flow does not represent the amount of
money available for the Company's discretionary spending since
certain obligations of the Company must be funded out of free cash
flow, management believes that it provides investors with a useful
alternative measure of liquidity by allowing an assessment of the
amount of cash available for general corporate and strategic
purposes, including debt payments, after funding operating activities
and capital expenditures, capitalized software expenses and deferred
costs. The above table reconciles free cash flow to cash provided by
operating activities, the nearest comparable GAAP measure.
----------------------------------------------------------------------
Return on Assets (ROA) Actual Fiscal 2004 Actual Q1 Fiscal 2005
and Return on Invested ---------------------- ----------------------
Capital (ROIC) ROA ROIC ROA ROIC
----------------------- ---------- ----------- ---------- ----------
(5) (5)
Numerator:
Income from
operations 93,284 93,284 107,491 107,491
Add implied interest
on operating
leases (1) 13,557 13,240
---------- ----------- ---------- ----------
93,284 106,841 107,491 120,731
---------- ----------- ---------- ----------
Denominator:
Average total
assets (2) 1,143,120 1,143,120 1,178,597 1,178,597
Less average cash (3) (10,129) (11,717)
Less average
non-interest
bearing current
liabilities (4) (166,175) (185,631)
Plus average present
value of operating
leases (1) 171,422 165,502
---------- ----------- ---------- ----------
1,143,120 1,138,238 1,178,597 1,146,750
---------- ----------- ---------- ----------
Return on invested
capital 8.2% 9.4% 9.1% 10.5%
========== =========== ========== ==========
Return on Assets (ROA) Target Fiscal 2005
and Return on Invested ----------------------------------------------
Capital (ROIC) ROA ROIC
----------------------- ---------------------- ----------------------
Numerator:
Income from
operations 131,000 155,000 131,000 155,000
Add implied interest
on operating
leases (1) 16,000 16,000
---------- ---------- ---------- ----------
131,000 155,000 147,000 171,000
---------- ---------- ---------- ----------
Denominator:
Average total
assets (2) 1,250,000 1,300,000 1,250,000 1,300,000
Less average cash (3) (5,000) (5,000)
Less average
non-interest
bearing current
liabilities (4) (220,000) (230,000)
Plus average present
value of operating
leases (1) 201,000 201,000
---------- ---------- ---------- ----------
1,250,000 1,300,000 1,226,000 1,266,000
---------- ---------- ---------- ----------
Return on invested
capital 10.5% to 11.9% 12.0% to 13.5%
========== ========== ========== ==========
Return on Assets (ROA) Long-Term Goals Fiscal 2008
and Return on Invested ----------------------------------------------
Capital (ROIC) ROA ROIC
----------------------- ---------------------- ----------------------
Numerator:
Income from
operations 221,000 272,000 221,000 272,000
Add implied interest
on operating
leases (1) 21,000 21,000
---------- ---------- ---------- -----------
221,000 272,000 242,000 293,000
---------- ---------- ---------- -----------
Denominator:
Average total
assets (2) 1,600,000 1,700,000 1,600,000 1,700,000
Less average cash (3) (100,000) (200,000)
Less average
non-interest
bearing current
liabilities (4) (240,000) (240,000)
Plus average present
value of operating
leases (1) 258,000 258,000
---------- ---------- ---------- -----------
1,600,000 1,700,000 1,518,000 1,518,000
---------- ---------- ---------- -----------
Return on invested
capital 13.8% to 16.0% 15.9% to 19.3%
========== ========== ========== ===========
Notes
-----
(1) Average present value of operating leases is the average for the
trailing 4 quarter ends of the present value of future payments on
operating leases, discounted at 8% which is the assumed implicit
interest rate included in the leases. The implied interest added
to the numerator is the 8% assumed interest charge on the average
quarterly balance ((beginning + Ending) / 2) of the present value
of the leases.
(2) Average total assets is the average of the GAAP amount for the
trailing 4 quarter ends.
(3) Average cash is the average of the GAAP amount for the trailing 4
quarter ends.
(4) Average non-interest bearing current liabilities is the average
for the trailing 4 quarter ends of all current liabilities
excluding the current portion of long-term debt.
(5) ROA and ROIC for Q1 of Fiscal 2005 are calculated on a trailing 4
quarters basis.
Return on Invested Capital (ROIC) as defined by the Company, may not
be comparable to similarly titled measures reported by other
companies. Management of the Company has included ROIC in this
Financial Road Map because it measures the capital efficiency of our
business. ROIC does not consider whether the business is financed
with debt or equity; rather ROIC calculates a return on all capital
invested in the business. The above table reconciles ROIC to a ROA
calculation using GAAP numbers. The Company uses ROIC in a number of
ways, including pricing analysis, capital expenditure evaluation, and
merger and acquisition valuation.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion