UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): January 23, 2008

 

ACXIOM CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

DELAWARE

(State or Other Jurisdiction of Incorporation)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

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Item 2.02      Results of Operations and Financial Condition

On January 23, 2008, Acxiom Corporation (the “Company”) issued a press release announcing the results of its financial performance for the third quarter of fiscal year 2008. The Company will hold a conference call at 4:30 p.m. CST 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. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

 

The Company’s press release and other communications from time to time include certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

 

The attached press release utilizes a non-GAAP measure of free cash flow available to equity. Free cash flow available to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt. The Company’s management believes that this measure of free cash flow available to equity is superior to the previously reported free cash flow, since it represents the amount of money available for the Company’s discretionary spending after funding all required obligations including scheduled debt payments, and it therefore provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes. Free cash flow available to equity is reconciled to operating cash flow, the nearest comparable GAAP measure, in a schedule to the press release.

 

The attached press release also presents management’s expectation for full-year diluted earnings per share on a non-GAAP basis by excluding the earnings-per-share impact of unusual items. Management believes this is a meaningful measure since unusual items are inherently difficult to forecast and are not indicative of the Company’s operations in the future. The non-GAAP measure of diluted earnings per share is reconciled to expected GAAP diluted earnings per share within the body of the press release, by disclosing the unusual items which have been excluded for the year-to-date historical period and will also be excluded for the full fiscal year.

 

The non-GAAP financial measures used by the Company in the attached press release may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.

 

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Item 9.01      Financial Statements and Exhibits

 

 

The following exhibits are furnished herewith:

 

 

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ACXIOM CORPORATION

 

By:    /s/ Jerry C. Jones 

 

 

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EXHIBIT INDEX

 

 

 

 

EXHIBIT 99.1

 

For more information, contact:

 

Katharine Boyce

Investor Relations Coordinator

Acxiom Corporation

(501) 342-1321

EACXM

 

Acxiom Announces Third-Quarter Results

 

LITTLE ROCK, Ark. — January 23, 2008 — Acxiom^® Corporation (Nasdaq: ACXM) today announced financial results for the third quarter of fiscal 2008 ended December 31, 2007. Acxiom will hold a conference call at 4:30 p.m. CST 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.

 

Revenue for the three-month period was $350.3 million, a decrease of 0.7 percent from the third quarter of fiscal 2007. Operating income for the quarter was $96.9 million including the unusual items detailed below. This represents an increase of 89 percent compared to the same quarter a year ago. Earnings of $.69 per diluted share include the impact of $.49 per share in unusual benefit, net of income tax effect, in the quarter as detailed below.

 

For the nine-month period ended December 31, 2007, revenue totaled $1.04 billion, up 0.2 percent from the same period in the prior year. Income from operations for the nine months was $121.4 million compared to $129.5 million a year ago. Diluted earnings per share were $.66 compared to $.75 in the prior year. The diluted earnings per share include the impact of $28.1 million, or $.21 per share, of benefit from unusual items, net of income tax effect, for the nine-month period.

 

Third-quarter earnings per diluted share of $.69 include a $63.5 million, or $.49 per diluted share, net benefit related to gains, losses and other items. The significant components of the gains, losses and other items are:

 

 

“Our revenue and earnings on continuing operations continue to be impacted by the difficulty in the financial services industry, which has resulted in reduced spending by many of our clients,” interim company leader Charles D. Morgan said. “With many of our largest clients affected by the downturn, it has had a significant impact on an important sector of our business. As we have discussed previously, due to the decrease in revenue during the first half of our fiscal year, we took measures to reduce expenses. Although these initiatives had a meaningful impact on expenses this quarter, these measures did not fully offset the reduction in revenue in the third quarter. We expect to experience continued reduced spending from some of our clients, especially in the financial services industry.”

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Details of Acxiom’s third-quarter performance include:

 

 

Segment information  

 

 

 

 

Recent developments

 

New Chief Executive Officer announced

 

On January 17, 2008, Acxiom announced the naming of John Meyer as its new CEO and President. Meyer has most recently been president of the Global Services group of Alcatel-Lucent. Prior to Alcatel-Lucent, Meyer served in a variety of executive capacities with EDS. Meyer will join Acxiom on February 4, 2008, and will also serve as a member of the board of directors.

 

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Meyer said that “Acxiom’s position as the leading provider of offline and online marketing services is the envy of the market. Acxiom’s proud history of innovation and delivery excellence has created value for its clients for decades. It is an honor to join the Company and do all I can to build on its successes. I look forward to working with our associates to create value for our clients and shareholders.”

 

EMC Update

 

In December 2005, the Company and EMC entered into an agreement whereby EMC purchased Acxiom’s existing grid operating system for a total payment of $30 million, which the Company previously received.  As part of the agreement, EMC has the option, in exchange for a $20 million payment by the end of January, to acquire the Acxiom unit responsible for the further development of the technology initially sold to EMC as well as new technology and functionality created by the unit that could be utilized by the Company and EMC. 

 

EMC has informed the company that it does not intend to exercise the option, per its original terms, and the parties are now engaged in negotiations concerning an ongoing commercial relationship.

 

ValueAct SmallCap Fund

 

Upon the request of ValueAct Capital Group and pursuant to the August 5, 2006 agreement between the company and ValueAct Capital Group, on January 17, 2008 permission was granted to ValueAct SmallCap Master Fund, L.P. to purchase up to $30 million of the common stock of the company in open market or privately negotiated transactions. It is the understanding of the company that ValueAct Capital Group is associated with but does not control ValueAct Small-Cap Master Fund, L.P.

 

Outlook

 

The Company is updating its outlook for the remainder of its 2008 fiscal year. Previous guidance is superseded by the updated guidance and should not be relied upon. Revenue for the 12 months ending March 31, 2008 is expected to be flat to down 1 percent compared to fiscal 2007. Earnings per diluted share, before the effect of any unusual items recorded during the fiscal year, are expected to be in the range of $.60 to $.65. Reflecting the $28.1 million of unusual items recorded during the first three quarters of the fiscal year, earnings per diluted share for the fiscal year are expected to be from $.81 to $.86.

 

These projections are forward looking, and actual results may differ materially. These projections may be impacted by mergers, acquisitions, divestitures or other business combinations that may be completed in the future as well as the other factors set forth below.

 

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, China and Canada.

 

For more information, visit www.acxiom.com.

 

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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 may include but are not necessarily limited to the following: that the projected revenue and earnings per share will be within the estimated ranges. 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 be closed, or may not be closed within the anticipated time frames; the possibility that clients may attempt to reduce the amount of business they do with the Company; the possibility that in the event that a change of control of the Company was sought that certain of the clients of the Company would invoke certain provisions in their contracts resulting in a decline in the revenue and profit of the Company; 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 or that economic conditions in general will not be as expected; the possibility that the historical seasonality of our business may change; 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 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 that negatively impact the Company; 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 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 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 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 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 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, their global counterparts and other delivery systems may be disrupted; and the possibility that we may be affected by other competitive factors.

 

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.

 

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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 or any other forward-looking statement.

 

Acxiom is a registered trademark of Acxiom Corporation.

 

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