Acxiom (Nasdaq: ACXM) Q3 Results

Sequential Improvement in Revenue, Earnings and Operating Cash Flow

LITTLE ROCK, Ark. -- January 28, 2010 -- Acxiom Corporation (Nasdaq: ACXM), a global leader in interactive marketing, today announced financial results for the third quarter of fiscal year 2010 ended December 31, 2009.

John Meyer, Acxiom’s chief executive officer and president, said, “We stated last quarter that we expected operating income performance in the second half of the year to improve over the first half. Based on our third quarter performance and historical seasonality patterns for fourth-quarter performance, we still expect to see significant improvement in operating income in the second half of the fiscal year.”

Meyer continued, “Despite another challenging period for us versus the prior-year quarter, we have seen a stabilization in client spending which, combined with aggressive sales initiatives, has led to increased sequential revenue for the second consecutive quarter. Our continued focus on cost management positively impacted both our operating income and operating margins. These initiatives, aided by management of our working capital, contributed to another strong quarter of operating cash flow.”

Third Quarter 2010 Highlights:

* Earnings per diluted share of $0.18 in the third quarter of fiscal 2010, compared to loss per diluted share of $0.15 in the third quarter of fiscal 2009. The prior year results included $0.36 in unusual items. Excluding the effect of the unusual items, diluted earnings per share in the prior-year period were $0.21.
* Income from operations of $29.9 million in the current-year third quarter, compared to loss from operations of $8.6 million in the third quarter last year. The prior-year loss from operations included $43.2 million in unusual loss items. Before the effect of the unusual loss items income from operations for the prior-year third quarter would have been $34.6 million.
* Revenue of $283.8 million in the current quarter, compared to $301.0 million, excluding an Information Products pass-through contract (approximately $20.1 million), in the third quarter a year ago. GAAP revenue, including the pass-through revenue in the prior quarter, was $321.1 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract.
* Operating cash flow of $74.5 million compared to $78.9 million in the third quarter a year ago.
* Free cash flow available to equity of $49.0 million, compared to $46.8 million in the third quarter a year ago. Free cash flow available to equity is a non-GAAP financial measure; a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this news release.

Operational Highlights:

* Information Services: Revenue for the quarter was $218.3 million, compared to $231.1 million in the third quarter of the previous year. Income from operations for the quarter was $27.6 million, compared to $30.4 million in the third quarter of fiscal 2009.
* Information Products: Revenue for the quarter was $65.5 million, compared with $69.9 million, excluding the pass-through revenue of approximately $20.1 million from the Information Products contract referenced above, in the third quarter a year ago. GAAP revenue, including the pass-through revenue in the prior quarter, was $90.0 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract. Income from operations for the quarter was $2.8 million, compared to income from operations of $4.2 million in the third quarter of the previous year.

Income from operations includes expenses that had previously been included in corporate and other expenses. The Company now allocates selling, general and administrative expenses previously included in corporate and other expenses to the two operating segments, Information Services and Information Products. Prior-year results have been reclassified to reflect the change.

Fiscal Year 2010 Year-To-Date Highlights:

* Earnings per diluted share of $0.35 for the current year nine-month period compared to earnings per diluted share of $0.19 in the comparable nine-month period last year. Excluding unusual loss items of $0.33, diluted earnings per share for the nine-month period of fiscal 2009 were $0.52.
* Income from operations of $63.6 million for the first nine months of fiscal year 2010, compared to $51.3 million in the comparable nine-month period of fiscal 2009. Income from operations for the prior year, excluding unusual loss items of $40.3 million, was $91.5 million.
* Revenue of $810.9 million in the current nine-month period, compared to $917.2 million, excluding revenue from an Information Products pass-through contract of approximately $63.8 million in the prior year. GAAP revenue, including the pass-through revenues in the prior year, was $981.1 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract.
* Operating cash flow of $151.4 million in the current fiscal year nine-month period compared to $194.2 million in the prior year nine-month period.
* Free cash flow available to equity of $65.2 million for the nine months ended December 31, 2009. For the nine-month period ended December 31, 2008 free cash flow available to equity was $108.7 million, including unusual and one-time items of $26.8 million, including $24.2 million in proceeds received from the sale of company-owned real estate. Free cash flow available to equity is a non-GAAP financial measure; reconciliation to the comparable GAAP measure, operating cash flow, is attached to this news release.

Web Link to Financials

You may link to http://www.acxiom.com/FY10_Q3_Financials for the detailed financial information we typically attach to our earnings releases.

Source: Acxiom