Q4 EPS In Line with Estimates; Revenue and Cash Flow Exceed Estimates
LITTLE ROCK, Ark., May 12, 2004 -- Acxiom(R) Corporation (Nasdaq:ACXM) today reported revenue and earnings for the fourth quarter of fiscal 2004 that were in line with the expectations the Company announced March 31, 2004. As projected, revenue of $277.8 million exceeded the previously estimated range of $265 million to $270 million, and diluted earnings per share of $.17 were within the previously estimated range of $.16 to $.18. Operating cash flow of $82.6 million was a record quarterly performance for the Company. Free cash flow of $57.5 million exceeded the previously estimated range of $25 million to $30 million.
This year`s fourth-quarter earnings include: a pre-tax charge of approximately $4 million associated with severance costs related to the workforce reduction in the fourth quarter; pre-tax charges of $10.9 million associated with write-downs; and an after-tax benefit of $9.6 million associated with a one-time reduction in income tax expense. The impact on earnings per share of the pre-tax charges of $14.9 million was approximately offset by the after-tax benefit of the $9.6 million reduction in income tax.
Fiscal 2004 revenue of $1.011 billion and diluted earnings per share of $.64 compare to $958 million in revenue and $.24 in diluted EPS in fiscal 2003. Acxiom will hold a conference call at 4:30 p.m. CDT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com.
"We are pleased with our Q4 performance and particularly our cash flow, which continues to exceed our expectations," Company Leader Charles D. Morgan said. "We believe that this performance reflects the growing strength of our business, and we`re also very encouraged with the progress we`re making with three other critical initiatives: integrating our two European acquisitions into Acxiom`s business; rolling out our new Customer Information Infrastructure grid-based solutions; and transitioning to our new organizational structure, which was designed to help us better serve clients and take advantage of our newer technologies."
Highlights of Acxiom`s fourth quarter include:
-- Revenue of $277.8 million, up 16 percent from $239.5 million
in the same quarter a year ago.
-- Diluted earnings per share of $.17 compared to a loss per
share of $.27 in the fourth quarter last year.
-- Operating cash flow of $82.6 million, a record performance for
the Company.
-- Free cash flow of $57.5 million, marking the 11th consecutive
quarter of strong free cash flow.
-- New contracts that will deliver $26 million in incremental
annual revenue and renewals that are expected to generate $38
million in annual revenue.
-- Committed new deals in the pipeline that are expected to add,
when closed, $58 million in annual revenue.
Highlights of Acxiom`s fiscal 2004 include:
-- Revenue of $1.011 billion, up 5.5 percent from $958 million a
year ago.
-- Diluted earnings per share (EPS) of $.64 compared to $.24 in
fiscal 2003.
-- Operating cash flow of $259.9 million.
-- Free cash flow of $187.8 million.
-- New contracts that will contribute an annual value of $107
million.
-- Contract renewals that will generate $90 million in annual
revenue.
-- The completion of the acquisitions of Claritas Europe and the
Consodata operations in the UK, France and Spain. (The
acquisition of Consodata Germany was completed April 13.)
-- Signing a strategic partnership with Accenture to help clients
in the retail financial services, telecommunications, consumer
products and government sectors better use customer
information to improve business results.
-- The initiation of the first quarterly cash dividend in the
Company`s history.
-- A Company stock buyback program that included the purchase of
approximately 4.4 million shares for approximately $64.5
million in the fiscal year.
In the fourth quarter, Acxiom completed new contracts with several large companies, including General Motors, Bank One Corporation, Cingular Wireless and Sonoco, and renewed its long-term contract with Deluxe Corporation. Since the close of the quarter, the Company has partnered with Accenture to close a deal with a major pharmaceutical company.
Fiscal 2004 Recognition
In fiscal 2004 Acxiom:
-- Was named to the "DM Review 100" list for the fourth
consecutive year. The annual list ranks the top 100 vendors of
business intelligence, analytic applications and customer
relationship management products.
-- Received the Gold SMART Award for "Best Marketing Database
Software" from British business magazine Direct Response, the
second year in a row Acxiom has won a gold SMART Award.
-- Was named to Software magazine`s "Software 500" ranking for
the third consecutive year.
-- Was selected as a finalist for the 2004 American Business
Award in the "Most Innovative Company" category for its
development of one of the first grid computing systems for use
in large commercial applications.
-- Also, Charles Morgan, Acxiom`s company leader, was inducted
into the Arkansas Business Hall of Fame.
Financial Road Map
For the fiscal year ended March 31, 2005 and thereafter, the Company`s expectations will be communicated in a new format. The Financial Road Map was introduced on March 31, 2004 and includes a chart summarizing the one-year and long-term goals as well as an explanation of the assumptions and definitions that accompany these goals. This Financial Road Map is attached and supercedes all previous guidance issued by the Company.
The financial projections stated today are based on the Company`s current expectations. These projections are forward looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed in the future.
About Acxiom
Acxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom`s innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and Europe, and in Australia and Japan.
This release (including 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 that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such statements include but are not necessarily limited to the following: that the projected revenue, operating margin, return on 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 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 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 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 of those assets now or in future time periods; the possibility that sales cycles may lengthen; 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 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, 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 competitive products and services; the possibility that there will be changes in consumer or business information industries and markets; the possibility that we won`t be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there will be changes in the legislative, accounting, regulatory and consumer environments affecting our business, including but not limited to litigation, legislation, regulations and customs relating to 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 contracts which would affect the predictability of our revenues; the possibility that the amount of ad hoc, volume-based and project work will not be as expected; the possibility that we may experience a loss of data center capacity or interruption of telecommunication links or power sources; the possibility that postal rates may increase, thereby leading to reduced volumes of business; the possibility that our clients may cancel or modify their agreements with us; the possibility that the services of the United States Postal Service, their global counterparts and other delivery systems may be disrupted; the possibility that the integration of our recently acquired businesses may not be successful; 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 trends will continue to grow at an increasing pace; relating to Operating Margin, that 1) Acxiom`s computer and communications related expenses will continue to fall as a percentage of revenue, 2) that the Customer Information Infrastructure (CII) grid-based environment Acxiom has begun to implement will continue to be implemented successfully over the next 3-4 years and that the new CII infrastructure will continue to provide increasing operational efficiencies, 3) that the recent acquisitions of Claritas Europe and Consodata Europe will be successfully integrated and that significant efficiencies will be realized from this integration; relating to Operating Cash Flow and Free Cash Flow, that sufficient operating and capital lease arrangements will continue to be available to the Company to provide for the financing of most of its computer equipment and that software suppliers will continue to provide financing arrangements for most of the software purchases; relating to Revolving Credit 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 Shares, that the Company will meet its cash flow expectations and that potential dilution created through the issuance of stock options and warrants will be mitigated by continued stock repurchases in accordance with the Company`s stock repurchase program.
With respect to the provision of products or services outside our primary base of operations in the U.S., all of the above factors apply, along with the difficulty of doing business in numerous sovereign 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.
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