For more information, contact:
Katharine Boyce
Acxiom Investor Relations
501-342-1321
investor.relations@acxiom.com
EACXM
ACXIOM ANNOUNCES SECOND QUARTER RESULTS
Successfully Launches Acxiom Audience Operating System™
LITTLE ROCK, Ark. – November 6, 2013 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its second quarter ended September 30, 2013.
Revenue was $276 million, down slightly compared to $277 million for the prior-year period. Income from operations decreased to $20 million in the current quarter, compared to $30 million in the prior year. Excluding unusual items, operating income for the quarter decreased 7 percent to $28 million as compared to $30 million in the prior year. Marketing and Data Services revenue increased 1 percent to $201 million in the quarter, compared to $199 million; IT Infrastructure Management revenue decreased 5 percent to $67 million in the current quarter compared to $70 million. Earnings per diluted share attributable to Acxiom stockholders were $0.13 in the current quarter compared to $0.21 in the prior-year quarter. Excluding unusual items, diluted earnings per share of $0.20 decreased slightly as compared to $0.21.
Operating cash flow was $170 million for the trailing twelve months, down 4 percent compared to $176 million for the comparable period a year ago. Free cash flow to equity was $69 million for the trailing twelve-month period, compared to $159 million for the comparable period. Free cash flow to equity for the prior-year trailing twelve-month period included $73 million in proceeds from the sale of the company’s background screening business. Free cash flow to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.
A schedule is attached to this release outlining the impact of the unusual items on the current and prior- year results.
“We are at an inflection point and starting the next chapter in our journey,” said Acxiom CEO Scott Howe. “We are a new company. Over the past two years we have worked to build a better business and to drive innovation. While it’s early, we are pleased with our launch of the Acxiom Audience Operating System and the resulting customer reaction and support.”
Second Quarter Highlights:
| · | The company launched the Acxiom AOS™ during AdWeek in New York City on September 24. The AOS presents marketers with a comprehensive view of their audiences and allows one-to-one marketing capabilities at scale across all channels and devices. |
| · | Acxiom launched a new consumer portal. AboutTheData.com™ is the first online consumer portal which allows individuals to view and update marketing data that Acxiom’s clients use for digital marketing. |
| · | The company expects over the next 6 to 12 months to reduce its annual cost base by roughly $20 to $30 million. These reductions will not impact the company’s ongoing investment in the Audience Operating System or the continued investment in innovation. |
| · | Acxiom repurchased approximately 900,000 shares for $22.7 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 12 million shares, or approximately 14.6 percent of the outstanding common stock, for $179 million. The company’s total share repurchase authorization is $200 million. |
| · | Acxiom announced a $600 million refinancing. Subsequent to the end of the quarter, Acxiom announced a refinancing of its credit facilities, consisting of a $300 million term loan and a $300 million undrawn revolving credit facility both maturing in October 2018. The proceeds of the term loan were used to repay the company’s existing $215 million term loan and for other general corporate purposes. |
Segment Results:
| · | Marketing and Data Services: Revenue for the second quarter increased slightly to $201 million, as compared to $199 million for the same period a year ago. U.S. revenue of $173 million increased 2 percent compared to $170 million in the prior period. Income from operations for the second quarter was $16 million, compared to $22 million in the prior period. Operating margin was 8 percent, compared to 11 percent in the previous year. |
| · | IT Infrastructure Management: Revenue for the second quarter decreased 5 percent to $67 million, compared to $70 million for the same period a year ago. Income from operations for the quarter was $12 million compared to $9 million in the comparable period. Operating margin was approximately 18 percent, compared to 12 percent. |
| · | Other Services: Revenue was $8 million, slightly down as compared to $9 million in the prior-year period. Operating margin was approximately 3 percent compared to a loss in the prior period. |
Financial Guidance
The following projections are forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward-Looking Statements section of this press release. Our guidance excludes unusual items. Acxiom’s estimates for fiscal 2014 are as follows:
| · | We now expect revenue for the fiscal year to be down slightly as compared to $1.099 billion in fiscal 2013. The slight revenue decrease is driven principally by an expected decline in IT Infrastructure Management. |
| · | We continue to expect earnings per diluted share attributable to Acxiom shareholders to be roughly flat. |
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.
Web Link to Financials
You may link to http://www.acxiom.com/FY14_Q2_Financials for the detailed financial information we typically attach to our earnings releases.
About Acxiom
Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.
Forward-Looking Statements
This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share for fiscal 2014, statements regarding cost base reductions, and statements regarding future investments, new customers and new product launches and capabilities. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients, which could lead to decreases in our operating results; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices;
the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.
We undertake no obligation to update the information contained in this press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.
