Acxiom Announces Third-Quarter Results; Highlights Include Strong International Results, Strong Cash Flow and New Business.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 third quarter of fiscal 2005 ended December December: see month. 31, 2004. Financial results for the quarter include revenue of $312.4 million, income from operations of $39.4 million, 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 $.24, 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. of $82.8 million and free cash flow of $58.5 million. Acxiom will hold a conference call at 4:30 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. 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 third quarter results keep us on track to achieve the fiscal-year targets we've we've Contraction of we have. we've have communicated in 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. "There were several highlights in the quarter, including a much-improved 10.6 percent operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in our international business, several significant new contracts won and existing contracts renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. and another strong cash flow performance." Highlights of Acxiom's third-quarter performance include: --Revenue of $312.4 million, up 22 percent from $255.2 million in the third quarter a year ago. Acquisitions contributed 15 percentage points of this 22 percentage-point growth in revenue. --Income from operations of $39.4 million, an increase of 6 percent compared to $37.3 million in the third quarter last year. --Pre-tax earnings of $34.6 million, an increase of 7 percent compared to $32.2 million in the third quarter a year ago. --Diluted earnings per share of $.24, up 9 percent from $.22 the year before. --Operating cash flow of $82.8 million and free cash flow of $58.5 million. The free cash flow of $58.5 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, is attached to this press release. --New contracts that are expected to deliver $36 million in annual revenue and renewals that total $45 million in annual revenue. --Committed new deals in the pipeline that are expected to generate $84 million in annual revenue. --The acquisition of ChinaLOOP, a pioneering business intelligence, customer relationship management and data management company based in Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. , China. In early January January: see month. , Acxiom also acquired SmartDM, a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. direct marketing firm based in Nashville Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn., that offers comprehensive direct marketing services and information management for mid-sized companies. Morgan noted that "Acxiom recently completed contracts with TransUnion TransUnion (full name Trans Union LLC) is a consumer credit reporting agency, considered one of the "big three" agencies in the United States. Like its main competitors, Experian and Equifax, it now markets its credit reports directly to consumers, in addition to its core , Providian Providian Financial Corporation was one of the leading credit card issuers in the United States. It was headquartered in San Francisco, California, Providian had more than 10 million card holders and was ranked as the ninth largest credit card issuer. Financial Corporation, GE Capital Corporation, Lands' End
Headquartered in Vinings, just outside Atlanta in unincorporated Cobb County, Georgia, Home Depot employs more than 355,000 people and operates 2,164 big-box , Inc., and Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. C. Harris Harris, Scotland: see Lewis and Harris. Publishing Co., Inc. We've also had some success with our Accenture (Accenture, Chicago, IL, www.accenture.com) The world's largest management and technology consulting firm, which was spun off of Arthur Andersen & Co. in 1989 as a separate entity known as Andersen Consulting. partnership. Recently we've added three new clients related to this partnership - two in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and one government agency. And at TransUnion we have implemented the first grid-based solution housed at a client site." "We again had a very encouraging quarter in new business won and renewals completed," Morgan continued. "They represent several substantial deals with important new and existing clients. Business activity in our pipeline remains strong, and we are confident our new-business outlook is good." Outlook For the fiscal year ended March 31, 2005 and thereafter, the Company's expectations are communicated in the attached Financial Road Map, which includes a chart summarizing the Company's 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. The Financial Road Map has been updated based on current expectations for fiscal years 2005 and 2006, and the long-term goals have been updated to reflect the expectation for fiscal year 2009. For the fiscal year ending March 31, 2006, the Company estimates that U.S. revenue will grow 7 percent to 11 percent, the U.S. operating margins will be 12.5 percent to 13.5 percent, international revenue will grow 7 percent to 11 percent and international margin will be 8 percent to 11 percent. The financial projections stated today are based on the Company's current expectations and the assumptions and limitations set forth in the Financial Road Map. These projections are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , 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 and do not include the impact of the expensing of employee stock options. Expensing of employee stock options will be required beginning July July: see month. 1, 2005, and the Company is currently evaluating the new accounting standard to determine the potential impact on the Company's financial statements. About Acxiom Corporation 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). , 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. , China and
Japan.For more information, visit www.acxiom.com. 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 a 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 may include but are not necessarily limited to the following: that the projected revenue, operating margin, 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 changes in accounting pronouncements (including the proposed accounting pronouncement changes which will require expensing of stock option grants and other equity compensation awards) may occur and may impact these projections; 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 we may experience failures or breaches of our network and data security systems, leading to potential adverse publicity, negative customer reaction, or liability to third parties; the possibility that postal Postal can refer to:
tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the contracts, which may result in contract penalties or lost revenue; the possibility that we experience processing errors which result in credits to customers, re-performance of services or payment of damages to customers; the possibility that the services of the United States Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval , their global counterparts and other delivery systems may be disrupted dis·rupt 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; that Acxiom's computer and communications related expenses will continue to fall as a percentage of revenue; that the 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 ) 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; 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
December 31,
--------------------------
2004 2003
------------------------
Revenue:
Services 225,811 196,407
Data 86,594 58,800
---------- ---------
Total revenue 312,405 255,207
Operating costs and expenses:
Cost of revenue
Services 174,960 157,058
Data 52,199 36,714
---------- ---------
Total cost of revenue 227,159 193,772
Selling, general and administrative 46,461 27,100
Gains, losses and nonrecurring items, net (640) (3,000)
---------- ---------
Total operating costs and expenses 272,980 217,872
---------- ---------
Income from operations 39,425 37,335
---------- ---------
Other income (expense):
Interest expense (5,076) (4,702)
Other, net 210 (456)
---------- ---------
Total other income (expense) (4,866) (5,158)
---------- ---------
Earnings before income taxes 34,559 32,177
Income taxes 11,079 12,233
---------- ---------
Net earnings 23,480 19,944
========== =========
Earnings per share:
Basic 0.27 0.23
========== =========
Diluted 0.24 0.22
========== =========
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Nine Months Ended
December 31,
-------------------------
2004 2003
----------------------
Revenue:
Services 653,730 579,019
Data 246,778 153,966
---------- ---------
Total revenue 900,508 732,985
Operating costs and expenses:
Cost of revenue
Services 507,459 470,242
Data 153,786 107,907
---------- ---------
Total cost of revenue 661,245 578,149
Selling, general and administrative 141,010 87,559
Gains, losses and nonrecurring items, net (984) (4,008)
---------- ---------
Total operating costs and expenses 801,271 661,700
---------- ---------
Income from operations 99,237 71,285
---------- ---------
Other income (expense):
Interest expense (14,889) (14,356)
Other, net 824 430
---------- ---------
Total other income (expense) (14,065) (13,926)
---------- ---------
Earnings before income taxes 85,172 57,359
Income taxes 30,312 14,935
---------- ---------
Net earnings 54,860 42,424
========== =========
Earnings per share:
Basic 0.64 0.50
========== =========
Diluted 0.58 0.47
========== =========
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
December 31,
--------------------------
2004 2003
--------- ---------
Basic earnings per share:
Numerator - net earnings 23,480 19,944
Denominator - weighted-average shares
outstanding 86,468 84,926
--------- ---------
Basic earnings per share 0.27 0.23
========= =========
Diluted earnings per share:
Numerator:
Net earnings 23,480 19,944
Interest expense on convertible bonds
(net of tax benefit) 1,017 1,026
--------- ---------
24,497 20,970
--------- ---------
Denominator:
Weighted-average shares outstanding 86,468 84,926
Dilutive effect of common stock
options and warrants 4,191 2,082
Dilutive effect of convertible debt 9,589 9,589
--------- ---------
100,248 96,597
--------- ---------
Diluted earnings per share 0.24 0.22
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Nine Months Ended
December 31,
-------------------------
2004 2003
--------- ---------
Basic earnings per share:
Numerator - net earnings 54,860 42,424
Denominator - weighted-average shares
outstanding 86,187 85,535
--------- ---------
Basic earnings per share 0.64 0.50
========= =========
Diluted earnings per share:
Numerator:
Net earnings 54,860 42,424
Interest expense on convertible bonds
(net of tax benefit) 3,051 3,076
--------- ---------
57,911 45,500
--------- ---------
Denominator:
Weighted-average shares outstanding 86,187 85,535
Dilutive effect of common stock
options and warrants 3,870 1,874
Dilutive effect of convertible debt 9,589 9,589
--------- ---------
99,646 96,998
--------- ---------
Diluted earnings per share 0.58 0.47
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
REVENUES BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
--------------------------
2004 2003
----------------------
US Services & Data 182,606 176,151
International Services & Data 58,507 15,547
IT Management 75,268 66,323
Intercompany eliminations (3,976) (2,814)
--------- ---------
Total Revenue 312,405 255,207
========= =========
For the Nine Months Ended
December 31,
-------------------------
2004 2003
----------------------
US Services & Data 544,927 507,292
International Services & Data 159,842 44,167
IT Management 208,610 189,235
Intercompany eliminations (12,871) (7,709)
--------- ---------
Total Revenue 900,508 732,985
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
December 31, March 31,
2004 2004
----------- -----------
Assets
------
Current assets:
Cash and cash equivalents $ 21,894 $ 14,355
Trade accounts receivable, net 232,815 212,387
Deferred income taxes 14,316 14,032
Refundable income taxes 1,444 2,280
Other current assets 44,939 43,272
----------- -----------
Total current assets 315,408 286,326
----------- -----------
Property and equipment 552,359 521,064
Less - accumulated depreciation and
amortization 243,530 253,976
----------- -----------
Property and equipment, net 308,829 267,088
----------- -----------
Software, net of accumulated amortization 58,010 64,553
Goodwill 339,986 282,971
Purchased software licenses, net of
accumulated amortization 154,192 157,217
Unbilled and notes receivable, excluding
current portions 18,864 13,030
Deferred costs, net 89,311 88,096
Data acquisition costs 48,681 36,557
Other assets, net 13,012 19,946
----------- -----------
$1,346,293 $1,215,784
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current installments of long-term
obligations 84,808 73,245
Trade accounts payable 48,116 41,527
Accrued merger, integration and impairment
costs - 2,881
Accrued payroll and related expenses 25,948 23,979
Other accrued expenses 78,723 63,411
Deferred revenue 94,084 91,060
----------- -----------
Total current liabilities 331,679 296,103
----------- -----------
Long-term obligations:
Long-term debt and capital leases, net of
current installments 251,391 239,327
Software and data licenses, net of current
installments 40,848 54,130
----------- -----------
Total long-term obligations 292,239 293,457
----------- -----------
Deferred income taxes 71,025 39,008
Commitments and contingencies
Stockholders' equity:
Common stock 9,446 9,226
Additional paid-in capital 398,687 361,256
Retained earnings 352,988 308,487
Accumulated other comprehensive loss 14,525 2,940
Treasury stock, at cost (124,296) (94,693)
----------- -----------
Total stockholders' equity 651,350 587,216
----------- -----------
$1,346,293 $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 Qtr ended Qtr ended
6/30/2004 9/30/2004 12/31/2004
Net cash provided
by operating
activities 34,714 61,742 82,805
Capitalized
software (4,107) (4,721) (5,706)
Capital
expenditures (1,823) (4,813) (3,132)
Deferral of costs (9,610) (11,113) (15,502)
-------------------------------
Free cash flow 19,174 41,095 58,465
===============================
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the
Three Months Ended
December 31,
-------------------
2004 2003
-------------------
Cash flows from operating activities:
Net earnings 23,480 19,944
Non-cash operating activities:
Depreciation and amortization 50,817 36,709
Loss on disposal or impairment of assets, net (50) -
Deferred income taxes 11,385 23,418
Changes in operating assets and liabilities:
Accounts receivable 3,403 (7,197)
Other assets 5,915 3,168
Accounts payable and other liabilities (12,145) 3,270
Merger, integration and impairment costs - (30)
--------- ---------
Net cash provided by operating activities 82,805 79,282
--------- ---------
Cash flows from investing activities:
Proceeds received from the disposition of
assets - 39
Capitalized software (5,706) (6,510)
Capital expenditures (3,132) (7,637)
Deferral of costs (15,502) (5,312)
Payments received from investments 1,795 159
Net cash paid in acquisitions (6,847) -
--------- ---------
Net cash used by investing activities (29,392) (19,261)
--------- ---------
Cash flows from financing activities:
Proceeds from debt 31,663 18,516
Payments of debt (82,175) (67,592)
Dividends paid (3,464) -
Sale of common stock 14,537 4,275
Acquisition of treasury stock (2,840) (1,350)
--------- ---------
Net cash used by financing activities (42,279) (46,151)
--------- ---------
Effect of exchange rate changes on cash 620 129
--------- ---------
Net decrease in cash and cash equivalents 11,754 13,999
Cash and cash equivalents at beginning of period 10,140 3,649
--------- ---------
Cash and cash equivalents at end of period 21,894 17,648
========= =========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 3,521 3,195
Income taxes 583 570
Noncash investing and financing activities:
Issuance of warrants in acquisition 1,833 -
Enterprise software licenses acquired under
long-term obligation 6,715 1,923
Acquisition of property and equipment under
capital lease and installment payment
arrangements 27,289 28,861
Construction of assets under construction
loan 4,868 4,244
========= =========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the
Nine Months Ended
December 31,
--------------------
2004 2003
--------------------
Cash flows from operating activities:
Net earnings 54,860 42,424
Non-cash operating activities:
Depreciation and amortization 139,916 107,745
Loss on disposal or impairment of assets, net (50) (1,008)
Deferred income taxes 30,933 16,676
Changes in operating assets and liabilities:
Accounts receivable (22,746) (2,387)
Other assets (2,531) 11,995
Accounts payable and other liabilities (18,430) 2,455
Merger, integration and impairment costs (2,691) (584)
--------- ---------
Net cash provided by operating activities 179,261 177,316
--------- ---------
Cash flows from investing activities:
Proceeds received from the disposition of
operations - 7,684
Proceeds received from the disposition of
assets - 737
Capitalized software (14,534) (20,141)
Capital expenditures (9,768) (12,261)
Investments in joint ventures and other
companies - (5,000)
Deferral of costs (36,225) (15,344)
Payments received from investments 2,298 1,519
Net cash paid in acquisitions (23,588) -
--------- ---------
Net cash used by investing activities (81,817) (42,806)
--------- ---------
Cash flows from financing activities:
Proceeds from debt 129,792 100,989
Payments of debt (217,784) (178,480)
Dividends paid (10,359) -
Sale of common stock 38,208 10,984
Acquisition of treasury stock (30,208) (56,047)
--------- ---------
Net cash used by financing activities (90,351) (122,554)
--------- ---------
Effect of exchange rate changes on cash 446 201
--------- ---------
Net decrease in cash and cash equivalents 7,539 12,157
Cash and cash equivalents at beginning of
period 14,355 5,491
--------- ---------
Cash and cash equivalents at end of period 21,894 17,648
========= =========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 13,409 13,497
Income taxes 1,080 (986)
Noncash investing and financing activities:
Issuance of warrants in acquisition 1,833 -
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 12,682 11,135
Acquisition of property and equipment under
capital lease and installment payment
arrangements 66,359 60,195
Construction of assets under construction
loan 17,979 6,854
========= =========
ACXIOM CORPORATION
Financial Road Map(1)
-------------------------
(as of Dec 31, 2004)
Actual Actual Long-Term
Actual(2) Q3 YTD Target Target Goals
Years Ending Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
March 31, 2004 2005 2005 2005 2006 2009
-------- -------- -------- --------- --------- ---------
U.S. Revenue 7% to 10%
Growth 2.7% 5.9% 7.5% 7% to 9% 7% to 11% (CAGR)
$991 to $1,075 to
U.S. Revenue $926 $254 $741 $1,010 $1,110
million million million million million -
International 10% to
Revenue 15%
Growth 51.3% 276.3% 261.9% - 7% to 11% (CAGR)
$215 to $235 to
International $85 $59 $160 $225 $245
Revenue million million million million million -
U.S.
Operating 12% to 12.5% to 15% to
Margin 9.8% 13.1% 12.2% 12.5% 13.5% 18%
International
Operating 15% to
Margin 3.1% 10.6% 5.4% 5% to 7% 8% to 11% 18%
Return on 10% to 11% to 14% to
Assets 8.2% 9.5%(3) 9.5%(3) 11% 13% 16%
Return on
Invested 12% to 13% to 16% to
Capital 9.4% 11.1%(3) 11.1%(3) 13% 15% 19%
$240 to $260 to $270 to
Operating $260 $83 $179 $260 $290 $300
Cash Flow million million million million million million
$160 to $170 to $170 to
Free Cash $188 $58 $119 $180 $200 $200
Flow million million million million million million
Revolving Less than Less than Less than
Credit Line $16 $0 $0 $150 $150 $200
Balance million million million million million million
Dividends Per $0.20 to
Share $0.04(4) $0.04 $0.12 $0.16 $0.16 $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) ROA and ROIC for Q3 & YTD of Fiscal 2005 are calculated on a
trailing 4 quarters basis. Results for the trailing 4 quarters
ending Q3 of Fiscal 2005 include $4.3 million of restructuring
charges, $3.7 million of asset impairment charges, partially
offset by $1.4 million of recovery of previous charges on a
bankrupt customer.
(4) 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. Interest rates will remain at approximately the current levels.
3. The Company will utilize all of its tax loss carry forwards and
begin to pay U.S. federal and state income taxes during FY07.
4. The Company will pay incentives under its bonus plan of
approximately $15 million to $25 million for each of the years
beginning in fiscal 2006 based on achievement of the Company's
business plan.
5. The Company will maintain a relatively constant mix of business
for each of its three business segments.
6. Foreign exchange rates will remain at approximately the current
levels.
7. Stock repurchases will be in amounts that yield the highest
shareholder return considering all other uses for the available
cash.
8. Diluted outstanding shares will increase slightly to reflect the
impact of in-the-money options as the stock price increases.
9. 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.
10. The effect of expensing employee stock options, which will be
required beginning July 1, 2005, is not included in the Financial
Roadmap. The Company is currently evaluating the new accounting
standard to determine the potential impact on the Company's
financial statements.
Definitions
-----------
1. Revenue Growth is defined as the percentage growth compared to
the previous corresponding fiscal year or comparable period.
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. Dividends Per Share is defined as the sum of the dividends for
that period.
ACXIOM CORPORATION
Reconciliation of Non-GAAP Measurements
---------------------------------------
(Dollars in thousands)
--------------------------------------------
Actual Actual Actual
Years Ending March 31, Fiscal 2004 Q2 Fiscal 2005 YTD Fiscal 2005
----------- -------------- ---------------
Free Cash Flow
--------------
Net cash provided by
operating activities 259,883 82,805 179,261
Proceeds received from
disposition of assets 2,783 0 0
Capitalized software (27,844) (5,706) (14,534)
Capital expenditures (22,178) (3,132) (9,768)
Deferral of costs (24,881) (15,502) (36,225)
--------- --------- ---------
Free cash flow 187,763 58,465 118,734
========= ========= =========
--------------------------------------------
Target
Years Ending March 31, Fiscal 2005
--------------------------------------------
Free Cash Flow
--------------
Net cash provided by
operating activities 240,000 260,000
Proceeds received from
disposition of assets 0 0
Capitalized software (20,000) (20,000)
Capital expenditures (15,000) (15,000)
Deferral of costs (45,000) (45,000)
---------- ----------
Free cash flow 160,000 to 180,000
========== ==========
--------------------------------------------
Target
Years Ending March 31, Fiscal 2006
--------------------------------------------
Free Cash Flow
--------------
Net cash provided by
operating activities 260,000 290,000
Proceeds received from
disposition of assets 0 0
Capitalized software (20,000) (20,000)
Capital expenditures (25,000) (25,000)
Deferral of costs (45,000) (45,000)
---------- ----------
Free cash flow 170,000 to 200,000
========== ==========
--------------------------------------------
Long-Term Goals
Years Ending March 31, Fiscal 2009
--------------------------------------------
Free Cash Flow
--------------
Net cash provided by
operating activities 270,000 300,000
Proceeds received from
disposition of assets 0 0
Capitalized software (20,000) (20,000)
Capital expenditures (25,000) (25,000)
Deferral of costs (55,000) (55,000)
---------- ----------
Free cash flow 170,000 to 200,000
========== ==========
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.
Actual Actual
Return on Assets (ROA) and Fiscal 2004 Q2 Fiscal 2005
Return on Invested Capital --------------------- ---------------------
(ROIC) ROA ROIC ROA ROIC
-------------------------- ---------- ---------- ---------- ----------
(5) (5)
Numerator:
Income from operations 93,284 93,284 121,237 121,237
Add implied interest on
operating leases (1) 13,557 13,243
---------- ---------- ---------- ----------
93,284 106,841 121,237 134,480
---------- ---------- ---------- ----------
Denominator:
Average total
assets (2) 1,143,120 1,143,120 1,275,529 1,275,529
Less average cash (3) (10,129) (14,401)
Less average non-
interest bearing
current
liabilities (4) (166,175) (231,681)
Plus average present
value of operating
leases (1) 171,422 177,024
---------- ---------- ---------- ----------
1,143,120 1,138,238 1,275,529 1,206,472
---------- ---------- ---------- ----------
Return on invested
capital 8.2% 9.4% 9.5% 11.1%
========== ========== ========== ==========
Return on Assets (ROA) and Actual
Return on Invested Capital YTD Fiscal 2005
(ROIC) ---------------------
-------------------------- ROA ROIC
---------- ----------
(5) (5)
Numerator:
Income from
operations 121,237 121,237
Add implied interest on
operating leases (1) 13,243
---------- ----------
121,237 134,480
---------- ----------
Denominator:
Average total
assets (2) 1,275,529 1,275,529
Less average cash (3) (14,401)
Less average
non-interest
bearing current
liabilities (4) (231,681)
Plus average present
value of operating
leases (1) 177,024
---------- ----------
1,275,529 1,206,472
---------- ----------
Return on invested
capital 9.5% 11.1%
========== ==========
-----------------------------------------------
Return on Assets (ROA) Target
and Return on Fiscal 2005
Invested Capital -----------------------------------------------
(ROIC) ROA ROIC
---------------------- ----------------------- -----------------------
Numerator:
Income from
operations 125,000 142,000 125,000 142,000
Add implied interest
on operating leases
(1) 15,000 15,000
---------- ---------- ---------- ----------
125,000 142,000 140,000 157,000
---------- ---------- ---------- ----------
Denominator:
Average total
assets (2) 1,280,000 1,300,000 1,280,000 1,300,000
Less average cash
(3) (10,000) (30,000)
Less average non-
interest bearing
current
liabilities (4) (230,000) (240,000)
Plus average
present value
of operating
leases (1) 175,000 180,000
---------- ---------- ---------- ----------
1,280,000 1,300,000 1,215,000 1,210,000
---------- ---------- ---------- ----------
Return on invested
capital 10% to 11% 12% to 13%
========== ========== ========== ==========
-----------------------------------------------
Return on Assets (ROA) Target
and Return on Fiscal 2006
Invested Capital -----------------------------------------------
(ROIC) ROA ROIC
----------------- ----------------------- -----------------------
Numerator:
Income from
operations 150,000 175,000 150,000 175,000
Add implied interest
on operating leases
(1) 15,500 15,500
---------- ---------- ---------- ----------
150,000 175,000 165,500 190,500
---------- ---------- ---------- ----------
Denominator:
Average total
assets (2) 1,350,000 1,400,000 1,350,000 1,400,000
Less average
cash (3) (50,000) (120,000)
Less average
non-interest
bearing current
liabilities (4) (240,000) (250,000)
Plus average
present value
of operating
leases (1) 190,000 200,000
---------- ---------- ---------- ----------
1,350,000 1,400,000 1,250,000 1,230,000
---------- ---------- ---------- ----------
Return on invested
capital 11% to 13% 13% to 15%
========== ========== ========== ==========
-----------------------------------------------
Return on Assets (ROA) Long-Term Goals
and Return on Fiscal 2009
Invested Capital -----------------------------------------------
(ROIC) ROA ROIC
----------------- ----------------------- -----------------------
Numerator:
Income from
operations 230,000 310,000 230,000 310,000
Add implied
interest on
operating leases
(1) 20,000 20,000
---------- ---------- ---------- ----------
230,000 310,000 250,000 330,000
---------- ---------- ---------- ----------
Denominator:
Average total
assets (2) 1,700,000 1,900,000 1,700,000 1,900,000
Less average
cash (3) (100,000) (140,000)
Less average
non-interest
bearing current
liabilities (4) (240,000) (250,000)
Plus average
present value
of operating
leases (1) 240,000 250,000
---------- ---------- ---------- ----------
1,700,000 1,900,000 1,600,000 1,760,000
---------- ---------- ---------- ----------
Return on invested
capital 14% to 16% 16% to 19%
========== ========== ========== ==========
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 quarterly and YTD figures are calculated on a
trailing 4 quarters basis and are therefore the same.
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