Acxiom Reports Fourth-Quarter, Fiscal-Year Results; Revenue Up 21%, EPS Grows 16% in Fiscal 2005.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 reported fourth-quarter and full-year financial results for fiscal 2005 ended March 31, 2005. Fourth-quarter results include revenue of $322.5 million, income from operations of $23.0 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 $.16. The fourth-quarter results include the impact of a $3.6 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the accelerated vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of stock options. Full-year results include revenue of $1.223 billion, income from operations of $122.2 million and diluted earnings per share of $.74. 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. The Company will reference presentation slides that will be available on the website prior to the call. "Our U.S. business remained solid in the fourth quarter and through the fiscal year, despite some reductions in credit card mailing volumes," 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. "U.S. revenue grew 9 percent for the fiscal year. While our international operation didn't did·n't Contraction of did not. didn't did not didn't do meet the expectations that we set for their business, we were able to integrate two large, historically unprofitable data businesses across seven countries in 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). with our U.K. based services
business and generate a profit for the fiscal year. We also believe that
the recent acquisitions of Smart DM and Digital Impact will enhance and
expand Acxiom's value proposition - inside and outside the
U.S."Details of Acxiom's fourth-quarter performance include: --Revenue of $322.5 million, a 16 percent increase over $277.8 million in the fourth quarter of fiscal 2004. Acquisitions contributed 4 percentage points of this 16 percentage-point growth in revenue. --Income from operations of $23.0 million, a 4 percent increase from $22.0 million the year before. --Diluted earnings per share of $0.16, down 6 percent from $0.17 in the same period a year ago. --A non-cash charge of $3.6 million related to the acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of vesting of stock options, which reduced income from operations by $3.6 million and reduced diluted earnings per share by 2.3 cents for the quarter. --Operating cash flow of $67.8 million and free cash flow of $40.2 million. The free cash flow of $40.2 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 are expected to deliver $42 million in annual revenue and renewals that total $42 million in annual revenue. --Committed new deals in the pipeline that are expected to generate $62 million in annual revenue. --The announcement of our agreement to acquire Digital Impact, a leading provider of integrated digital marketing solutions, based in San Mateo, California San Mateo is a city in San Mateo County, California, in the San Francisco Bay Area. It is one of the larger suburbs on the San Francisco Peninsula, located between Burlingame to the north, Foster City to the East, and Belmont to the south. . This acquisition closed following the completion of the fourth quarter. --The acquisition of 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 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; Deluxe de·luxe also de luxe adj. Particularly elegant and luxurious; sumptuous: deluxe accommodations; a de luxe automobile. adv. Corporation; Lands' End
It was founded in 1879 and was previously known as White Cross. It was formerly owned by millionaire investor John D. , a subsidiary of Conseco Conseco (NYSE: CNO), originally Security Life of Indiana, is a financial services organization based in Carmel, Indiana. Conseco's insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than 4 million customers in the Inc.; RR Donnelley
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The company was formed on May 30, 1997, as a result of an acquisition by Franklin Quest of Stephen R. ; and Advance Publications Inc. Fiscal 2005 highlights: --Revenue of $1.223 billion, up 21 percent from $1.011 billion a year ago. Acquisitions contributed 11 percentage points of this 21 percentage-point growth in revenue. --Diluted earnings per share of $.74, a 16 percent improvement over $.64 in fiscal 2004. --Operating cash flow of $247.0 million. --Free cash flow of $159.0 million. --New contracts that are expected to deliver $137 million in annual revenue and renewals that also total $168 million in annual revenue. Highlights include a new 15-year contract with Information Resources (1) The data and information assets of an organization, department or unit. See data administration. (2) Another name for the Information Systems (IS) or Information Technology (IT) department. See IT. , Inc. (IRI Iri (ē`rē`), former city, North Jeolla (Cholla) prov., SW South Korea. An agricultural center and transportation hub, it was absorbed into Iksan. ), including renewal options after years 5 and 10, that is expected to average $25 million to $30 million in annual revenue; and a five-year extension of Acxiom's data center management 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. agreement 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 with an estimated average annual revenue of $60 million to $70 million. --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. --The purchase of 2.97 million shares of Acxiom stock through the company's stock buy-back program at a total cost of $67.4 million. From the program's introduction in December December: see month. 2002 through March 31, 2005, the Company has purchased a total of 9.1 million shares of Acxiom stock at a total cost of $158.6 million. --An increase in the Company's quarterly cash dividend, which was raised from 4 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. to 5 cents per share in February February: see month. 2005. --The redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of a $175 million convertible bond in February 2005, resulting in an annual cash savings of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $6.6 million. Fiscal 2005 Recognition In fiscal 2005, Acxiom was: --Included in the Computerworld Honors Program for its 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-computing technology. --Named to the DM Review 100. --Honored by Computerworld as one of the 100 Best Places to Work in Information Technology --Listed in CIO CIO: see American Federation of Labor and Congress of Industrial Organizations. (Chief Information Officer) The executive officer in charge of information processing in an organization. magazine's "CIO 100 for IT Agility." --Honored by CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. magazine with its "CRM Data Quality Market Leader Award." --Included in InformationWeek magazine's "InformationWeek 500 for Innovative Use of Information Technology." --Honored with a TDWI TDWI The Data Warehousing Institute TDWI The Doctor Weighs In (website) Best Practices in Data Warehousing See data warehouse. data warehousing - data warehouse award in the "Radical Data Warehousing/Business Intelligence" category. Road Map and Outlook Fiscal 2005 U.S. revenue of $1.011 billion exceeded the range of $991 million to $1.010 billion the Company projected in its Financial Road Map. International revenue of $213 million for the year was slightly below the Road Map range of $215 million to $225 million. U.S. operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , which was impacted by the $3.6 million non-cash charge, was 11.3 percent for fiscal 2005 compared to a projected range of 12 to 12.5 percent. International margin of 3.9 percent was below the 5 to 7 percent projected range. Acxiom's Financial Road Map has been updated based on current expectations for fiscal year 2006, and the long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. reflect expected performance in fiscal 2009. For the fiscal year ended March 31, 2006, the Company estimates that: U.S. revenue will grow 13 percent to 15 percent, the U.S. operating margins will be 11.5 percent to 12.5 percent, international revenue will grow 0 percent to 5 percent (5 to 10 percent when adjusted for the recent divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of letter shop operations in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). ) and international margin will be 4.5 percent to 6.5 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, 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, 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, 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 China. 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, presentation slides 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, dividends and other metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. referred to in the Financial Road Map will be within the estimated ranges; 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 the recent acquisitions of SmartDM and Digital Impact will enhance and expand Acxiom's value proposition - inside and outside the U.S.; 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 of an 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. 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 integration of acquired businesses may not be as successful as planned; 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 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. ; 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) 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 acquisitions of companies operating primarily outside of the United States 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 United States, 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
REVENUES BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three
Months Ended
March 31,
---------------------
2005 2004
---------------------
US Services & Data 190,392 181,351
International Services & Data 52,687 39,866
IT Management 83,615 62,227
Intercompany eliminations (4,160) (5,607)
---------- ----------
Total Revenue 322,534 277,837
========== ==========
For the Twelve
Months Ended
March 31,
---------------------
2005 2004
---------------------
US Services & Data 735,319 688,643
International Services & Data 212,529 84,033
IT Management 292,225 251,462
Intercompany eliminations (17,031) (13,316)
---------- ----------
Total Revenue 1,223,042 1,010,822
========== ==========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
March 31, March 31,
2005 2004
----------- -----------
Assets
------
Current assets:
Cash and cash equivalents $ 4,185 $ 14,355
Trade accounts receivable, net 250,653 212,387
Deferred income taxes 29,692 14,032
Refundable income taxes 1,345 2,280
Other current assets 46,034 43,272
----------- -----------
Total current assets 331,909 286,326
----------- -----------
Property and equipment 581,918 521,064
Less - accumulated depreciation and
amortization 258,532 253,976
----------- -----------
Property and equipment, net 323,386 267,088
----------- -----------
Software, net of accumulated amortization 57,135 64,553
Goodwill 354,182 282,971
Purchased software licenses, net of
accumulated amortization 157,999 157,217
Unbilled and notes receivable, excluding
current portions 20,410 13,030
Deferred costs, net 88,851 88,096
Data acquisition costs 48,915 36,557
Other assets, net 15,369 19,946
----------- -----------
$1,398,156 $1,215,784
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current installments of long-term
obligations 83,005 73,245
Trade accounts payable 63,295 41,527
Accrued merger, integration and impairment
costs - 2,881
Accrued payroll and related expenses 27,435 23,979
Other accrued expenses 74,635 63,411
Deferred revenue 115,892 91,060
----------- -----------
Total current liabilities 364,262 296,103
----------- -----------
Long-term obligations:
Long-term debt and capital leases, net of
current installments 104,210 239,327
Software and data licenses, net of current
installments 37,494 54,130
----------- -----------
Total long-term obligations 141,704 293,457
----------- -----------
Deferred income taxes 77,356 39,008
Commitments and contingencies
Stockholders' equity:
Common stock 10,440 9,226
Additional paid-in capital 588,156 361,256
Retained earnings 363,556 308,487
Accumulated other comprehensive loss 12,616 2,940
Treasury stock, at cost (159,934) (94,693)
----------- -----------
Total stockholders' equity 814,834 587,216
----------- -----------
$1,398,156 $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 Qtr ended Yr ended
6/30/2004 9/30/2004 12/31/2004 3/31/2005 3/31/2005
Net cash provided
by operating
activities 34,714 61,742 82,805 67,753 247,014
Capitalized
software (4,107) (4,721) (5,706) (5,760) (20,294)
Capital
expenditures (1,823) (4,813) (3,132) (4,562) (14,330)
Deferral of costs (9,610) (11,113) (15,502) (17,203) (53,428)
----------------------------------------------------
Free cash flow 19,174 41,095 58,465 40,228 158,962
====================================================
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three
Months Ended
March 31,
------------------
2005 2004
------------------
Cash flows from operating activities:
Net earnings 14,858 15,919
Non-cash operating activities:
Depreciation and amortization 55,204 42,496
Loss (gain) on disposal or impairment of
assets, net (361) 10,948
Deferred income taxes 3,232 (9,781)
Tax benefit of stock options and warrants 9,043 4,313
Non-cash stock compensation expense 3,595 -
Changes in operating assets and liabilities:
Accounts receivable (21,540) 27,981
Other assets (19,367) (4,560)
Accounts payable and other liabilities 23,089 (7,630)
Merger, integration and impairment costs - 2,881
-------- --------
Net cash provided by operating activities 67,753 82,567
-------- --------
Cash flows from investing activities:
Proceeds received from the disposition of
assets - 2,046
Capitalized software (5,760) (7,703)
Capital expenditures (4,562) (9,917)
Deferral of costs (17,203) (9,537)
Payments received from investments 235 159
Net cash paid in acquisitions (18,612) (55,591)
-------- --------
Net cash used by investing activities (45,902) (80,543)
-------- --------
Cash flows from financing activities:
Proceeds from debt 86,346 48,698
Payments of debt (93,566) (53,283)
Dividends paid (4,290) (3,415)
Sale of common stock 5,776 11,053
Acquisition of treasury stock (33,551) (8,423)
-------- --------
Net cash used by financing activities (39,285) (5,370)
-------- --------
Effect of exchange rate changes on cash (275) 53
-------- --------
Net decrease in cash and cash equivalents (17,709) (3,293)
Cash and cash equivalents at beginning of period 21,894 17,648
-------- --------
Cash and cash equivalents at end of period 4,185 14,355
======== ========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 7,064 6,692
Income taxes 385 2,744
Payments on capital leases and installment
payment arrangements 11,241 13,929
Payments on software and data license
liabilities 5,151 3,097
Noncash investing and financing activities:
Issuance of warrants in acquisition - 2,000
Software licenses acquired under software
obligation 1,200 5,500
Acquisition of property and equipment
under capital lease and installment
payment arrangements 24,268 20,323
Construction of assets under construction
loan 3,853 4,191
Convertible debt converted to common
stock (net of deferred issuance costs) 171,631 -
======== ========
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Twelve
Months Ended
March 31,
------------------
2005 2004
------------------
Cash flows from operating activities:
Net earnings 69,718 58,344
Non-cash operating activities:
Depreciation and amortization 195,120 150,241
Loss (gain) on disposal or impairment of
assets, net (411) 9,940
Deferred income taxes 34,165 6,895
Tax benefit of stock options and warrants 9,043 4,313
Non-cash stock compensation expense 3,595 -
Changes in operating assets and liabilities:
Accounts receivable (44,286) 25,594
Other assets (21,898) 7,434
Accounts payable and other liabilities 4,659 (5,175)
Merger, integration and impairment costs (2,691) 2,297
-------- --------
Net cash provided by operating activities 247,014 259,883
-------- --------
Cash flows from investing activities:
Proceeds received from the disposition of
operations - 7,684
Proceeds received from the disposition of
assets - 2,783
Capitalized software (20,294) (27,844)
Capital expenditures (14,330) (22,178)
Investments in joint ventures and other
companies - (5,000)
Deferral of costs (53,428) (24,881)
Payments received from investments 2,533 1,678
Net cash paid in acquisitions (42,200) (55,591)
-------- --------
Net cash used by investing activities (127,719) (123,349)
-------- --------
Cash flows from financing activities:
Proceeds from debt 216,138 149,687
Payments of debt (311,350) (231,763)
Dividends paid (14,649) (3,415)
Sale of common stock 43,984 22,037
Acquisition of treasury stock (63,759) (64,470)
-------- --------
Net cash used by financing activities (129,636) (127,924)
-------- --------
Effect of exchange rate changes on cash 171 254
-------- --------
Net decrease in cash and cash equivalents (10,170) 8,864
Cash and cash equivalents at beginning of period 14,355 5,491
-------- --------
Cash and cash equivalents at end of period 4,185 14,355
======== ========
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 20,473 20,189
Income taxes 1,465 1,758
Payments on capital leases and installment
payment arrangements 60,886 30,823
Payments on software and data license
liabilities 24,748 32,801
Noncash investing and financing activities:
Issuance of warrants in acquisition 1,833 2,000
Acquisition of land in exchange for debt - 2,698
Acquisition of data under long-term
obligation - 18,340
Software licenses acquired under software
obligation 13,882 16,635
Acquisition of property and equipment under
capital lease and installment payment
arrangements 90,627 80,518
Construction of assets under construction
loan 21,832 11,045
Convertible debt converted to common stock
(net of deferred issuance cost) 171,633 -
======== ========
ACXIOM CORPORATION
Financial Road Map(1)
----------------------
(as of March 31, 2005)
Long-Term
Actual(2) Actual(3) Actual(3) Target Goals
Years Ending Fiscal Q4 Fiscal Fiscal Fiscal Fiscal
March 31, 2004 2005 2005 2006 2009
---------- ---------- ----------- ----------- ---------
U.S. Revenue 7% to 10%
Growth 2.7% 13.4% 9.0% 13% to 15% (CAGR)
U.S. Revenue $926 $270 $1,011 $1,140 to
million million million $1,160 mil -
International
Revenue 5% to 8%
Growth 51.3% 32.2% 152.9% 0% to 5% (CAGR)
International $85 $53 $213 $213 to
Revenue million million million $220 mil -
U.S.
Operating 11.5% to 15% to
Margin 9.8% 8.6% 11.3% 12.5% 18%
International
Operating 4.5% to 12% to
Margin 3.1% -0.5% 3.9% 6.5% 15%
Return on 10% to
Assets 8.2% 9.2%(3) 9.2%(3) 9% to 10% 14%
Return on
Invested 13% to
Capital 9.4% 11.0%(3) 11.0%(3) 11% to 12% 18%
Operating $260 $68 $247 $250 to $270 to
Cash Flow million million million $270 mil $300 mil
Free Cash $188 $40 $159 $160 to $170 to
Flow million million million $180 mil $200 mil
Revolving
Credit Line $16 $11 $11 $200 to less than
Balance million million million $375 mil $300 mil
Dividends Per $0.24 to
Share $0.04(4) $0.05 $0.17 $0.20 $0.28
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 are calculated on a trailing 4 quarters basis.
Results for the trailing 4 quarters ending March 31, 2005 include
$1.0 million income included in gains, losses & nonrecurring items
and $3.6 million in expense related to vesting of stock options.
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 are assumed to increase slightly over 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 FY06.
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.
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 Q4 Fiscal 2005 Fiscal 2005
----------- -------------- -----------
Free Cash Flow
--------------
Net cash provided by
operating activities 259,883 67,753 247,014
Proceeds received
from disposition of
assets 2,783 0 0
Capitalized software (27,844) (5,760) (20,294)
Capital expenditures (22,178) (4,562) (14,330)
Deferral of costs (24,881) (17,203) (53,428)
--------- --------- ---------
Free cash flow 187,763 40,228 158,962
========= ========= =========
----------------------------------------
Target
Years Ending March 31, Fiscal 2006
----------------------------------------
Free Cash Flow
--------------
Net cash provided by
operating activities 250,000 270,000
Proceeds received
from disposition of
assets 0 0
Capitalized software (20,000) (20,000)
Capital expenditures (15,000) (15,000)
Deferral of costs (55,000) (55,000)
--------- ---------
Free cash flow 160,000 to 180,000
========= =========
----------------------------------------
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 (25,000) (25,000)
Capital expenditures (20,000) (20,000)
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.
Return on
Assets
(ROA) ----------------------------------------------------------
and Return Actual Actual Actual
on Invested Fiscal 2004 Q4 Fiscal 2005 Fiscal 2005
Capital ------------------ ------------------- -------------------
(ROIC) ROA ROIC ROA ROIC ROA ROIC
----------- -------- --------- --------- --------- --------- ---------
(5) (5) (5) (5)
Numerator:
Income
from
operations 93,284 93,284 122,192 122,192 122,192 122,192
Add
implied
interest
on
operating
leases
(1) 13,557 13,903 13,903
--------- --------- --------- --------- --------- ---------
93,284 106,841 122,192 136,095 122,192 136,095
--------- --------- --------- --------- --------- ---------
Denominator:
Average
total
assets
(2) 1,143,120 1,143,120 1,321,122 1,321,122 1,321,122 1,321,122
Less
average
cash (3) (10,129) (11,858) (11,858)
Less
average
non-
interest
bearing
current
liabilities
(4) (166,175) (246,280) (246,280)
Plus
average
present
value of
operating
leases
(1) 171,422 168,734 168,734
--------- --------- --------- --------- --------- ---------
1,143,120 1,138,238 1,321,122 1,231,717 1,321,122 1,231,717
--------- --------- --------- --------- --------- ---------
Return on
invested
capital 8.2% 9.4% 9.2% 11.0% 9.2% 11.0%
========= ========= ========= ========= ========= =========
---------------------------------------------
Target
Return on Assets (ROA) Fiscal 2006
and Return on Invested ---------------------- ----------------------
Capital (ROIC) ROA ROIC
------------------------ ---------------------- ----------------------
Numerator:
Income from operations 141,000 160,000 141,000 160,000
Add implied interest on
operating leases (1) 14,200 14,200
---------- ---------- ---------- ----------
141,000 160,000 155,200 174,200
---------- ---------- ---------- ----------
Denominator:
Average total assets
(2) 1,542,000 1,552,000 1,542,000 1,552,000
Less average cash (3) (6,300) (12,700)
Less average non-
interest bearing
current liabilities
(4) (280,000) (280,200)
Plus average present
value of operating
leases (1) 180,000 179,500
---------- ---------- ---------- ----------
1,542,000 1,552,000 1,435,700 1,438,600
---------- ---------- ---------- ----------
Return on invested
capital 9% to 10% 11% to 12%
========== ========== ========== ==========
---------------------------------------------
Long-Term Goals
Return on Assets (ROA) Fiscal 2009
and Return on Invested ---------------------- ----------------------
Capital (ROIC) ROA ROIC
------------------------ ---------------------- ----------------------
Numerator:
Income from operations 191,000 272,000 191,000 272,000
Add implied interest on
operating leases (1) 19,000 19,000
---------- ---------- ---------- ----------
191,000 272,000 210,000 291,000
---------- ---------- ---------- ----------
Denominator:
Average total assets
(2) 1,840,000 1,938,000 1,840,000 1,938,000
Less average cash (3) (214,800) (285,100)
Less average non-
interest bearing
current liabilities
(4) (290,000) (291,500)
Plus average present
value of operating
leases (1) 237,000 237,000
---------- ---------- ---------- ----------
1,840,000 1,938,000 1,572,200 1,598,400
---------- ---------- ---------- ----------
Return on invested
capital 10% to 14% 13% to 18%
========== ========== ========== ==========
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.
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