UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2012
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ----- to -----
|
Commission file number 0-13163
|
|
Acxiom Corporation
(Exact Name of Registrant as Specified in Its Charter)
|
|
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
|
71-0581897
(I.R.S. Employer
Identification No.)
|
P.O. Box 8180, 601 E. Third Street,
Little Rock, Arkansas
(Address of Principal Executive Offices)
|
72201
(Zip Code)
|
(501) 342-1000
(Registrant's Telephone Number, Including Area Code)
|
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
|||||||||
Yes [X]
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No [ ]
|
||||||||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
|||||||||
Yes [X]
|
No [ ]
|
||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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|||||||||
Large accelerated filer [X]
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Accelerated filer [ ]
|
||||||||
Non-accelerated filer [ ]
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Smaller reporting company [ ]
|
||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)
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Yes [ ]
|
No [X]
|
||||||||
The number of shares of Common Stock, $ 0.10 par value per share, outstanding as of February 4, 2013 was 73,827,393.
|
Part I. Financial Information | Page No. | |||
Item 1. Financial Statements | ||||
Condensed Consolidated Balance Sheets
as of December 31, 2012 and March 31, 2012 (Unaudited)
|
3 | |||
Condensed Consolidated Statements of Operations
for the Three Months ended December 31, 2012 and 2011 (Unaudited)
|
4 | |||
Condensed Consolidated Statements of Operations
for the Nine Months ended December 31, 2012 and 2011 (Unaudited)
|
5
|
|||
Condensed Consolidated Statements of Comprehensive Income
for the Three Months ended December 31, 2012 and 2011 (Unaudited)
|
6
|
|||
Condensed Consolidated Statements of Comprehensive Income
for the Nine Months ended December 31, 2012 and 2011 (Unaudited)
|
7
|
|||
Condensed Consolidated Statement of Stockholders’ Equity
for the Nine Months ended December 31, 2012 (Unaudited)
|
8
|
|||
Condensed Consolidated Statements of Cash Flows
for the Nine Months ended December 31, 2012 and 2011 (Unaudited)
|
9-10
|
|||
Notes to Condensed Consolidated Financial Statements | 11-22 | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23-33 | ||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 34 | ||
Item 4. | Controls and Procedures | 34 | ||
Part II. Other Information | ||||
Item 1. | Legal Proceedings | 35 | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 | ||
Item 6. | Exhibits | 36 | ||
Signature | 37 | |||
Exhibit Index | 38 |
December 31,
2012
|
March 31, 2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 186,220 | $ | 229,648 | ||||
Trade accounts receivable, net
|
182,457 | 169,446 | ||||||
Deferred income taxes
|
15,082 | 15,107 | ||||||
Other current assets
|
52,750 | 57,804 | ||||||
Total current assets
|
436,509 | 472,005 | ||||||
Property and equipment, net of accumulated depreciation and amortization
|
231,774 | 253,373 | ||||||
Software, net of accumulated amortization
|
19,491 | 13,211 | ||||||
Goodwill
|
382,704 | 382,285 | ||||||
Purchased software licenses, net of accumulated amortization
|
21,583 | 25,294 | ||||||
Deferred costs, net
|
47,211 | 61,977 | ||||||
Data acquisition costs, net
|
11,540 | 15,009 | ||||||
Other assets, net
|
2,831 | 3,697 | ||||||
$ | 1,153,643 | $ | 1,226,851 | |||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current installments of long-term debt
|
$ | 19,814 | $ | 26,336 | ||||
Trade accounts payable
|
19,873 | 31,030 | ||||||
Accrued expenses
|
||||||||
Payroll
|
47,041 | 54,839 | ||||||
Other
|
73,696 | 77,062 | ||||||
Deferred revenue
|
47,389 | 59,949 | ||||||
Income taxes payable
|
3,229 | 16,400 | ||||||
Total current liabilities
|
211,042 | 265,616 | ||||||
Long-term debt
|
240,774 | 251,886 | ||||||
Deferred income taxes
|
86,614 | 93,039 | ||||||
Other liabilities
|
4,178 | 4,455 | ||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Common stock
|
12,108 | 12,003 | ||||||
Additional paid-in capital
|
877,619 | 860,165 | ||||||
Retained earnings
|
580,728 | 536,359 | ||||||
Accumulated other comprehensive income
|
14,714 | 13,601 | ||||||
Treasury stock, at cost
|
(873,893 | ) | (810,381 | ) | ||||
Total Acxiom stockholders' equity
|
611,276 | 611,747 | ||||||
Noncontrolling interest
|
(241 | ) | 108 | |||||
Total equity
|
611,035 | 611,855 | ||||||
$ | 1,153,643 | $ | 1,226,851 | |||||
See accompanying notes to condensed consolidated financial statements.
|
For the Three Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Revenues
|
$ | 273,102 | $ | 280,893 | ||||
Operating costs and expenses:
|
||||||||
Cost of revenue
|
209,027 | 213,925 | ||||||
Selling, general and administrative
|
37,303 | 36,318 | ||||||
Impairment of goodwill and other intangibles
|
- | 17,803 | ||||||
Gains, losses and other items, net
|
(126 | ) | (2,671 | ) | ||||
Total operating costs and expenses
|
246,204 | 265,375 | ||||||
Income from operations
|
26,898 | 15,518 | ||||||
Other expense:
|
||||||||
Interest expense
|
(3,178 | ) | (3,883 | ) | ||||
Other, net
|
565 | (98 | ) | |||||
Total other expense
|
(2,613 | ) | (3,981 | ) | ||||
Earnings from continuing operations before income taxes
|
24,285 | 11,537 | ||||||
Income taxes
|
9,836 | 9,700 | ||||||
Net earnings from continuing operations
|
$ | 14,449 | $ | 1,837 | ||||
Earnings from discontinued operations, net of tax
|
- | 814 | ||||||
Net earnings
|
$ | 14,449 | $ | 2,651 | ||||
Less: Net loss attributable to noncontrolling interest
|
(76 | ) | (5,279 | ) | ||||
Net earnings attributable to Acxiom
|
$ | 14,525 | $ | 7,930 | ||||
Basic earnings per share:
|
||||||||
Net earnings from continuing operations
|
$ | 0.19 | $ | 0.02 | ||||
Net earnings from discontinued operations
|
- | 0.01 | ||||||
Net earnings
|
$ | 0.19 | $ | 0.03 | ||||
Net earnings attributable to Acxiom stockholders
|
$ | 0.20 | $ | 0.10 | ||||
Diluted earnings per share:
|
||||||||
Net earnings from continuing operations
|
$ | 0.19 | $ | 0.02 | ||||
Net earnings from discontinued operations
|
- | 0.01 | ||||||
Net earnings
|
$ | 0.19 | $ | 0.03 | ||||
Net earnings attributable to Acxiom stockholders
|
$ | 0.19 | $ | 0.10 | ||||
See accompanying notes to condensed consolidated financial statements.
|
For the Nine Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Revenues
|
$ | 822,228 | $ | 843,369 | ||||
Operating costs and expenses:
|
||||||||
Cost of revenue
|
628,239 | 649,701 | ||||||
Selling, general and administrative
|
111,393 | 112,554 | ||||||
Impairment of goodwill and other intangibles
|
- | 17,803 | ||||||
Gains, losses and other items, net
|
66 | 38 | ||||||
Total operating costs and expenses
|
739,698 | 780,096 | ||||||
Income from operations
|
82,530 | 63,273 | ||||||
Other expense:
|
||||||||
Interest expense
|
(9,735 | ) | (14,057 | ) | ||||
Other, net
|
(36 | ) | (1,150 | ) | ||||
Total other expense
|
(9,771 | ) | (15,207 | ) | ||||
Earnings from continuing operations before income taxes
|
72,759 | 48,066 | ||||||
Income taxes
|
28,739 | 25,291 | ||||||
Net earnings from continuing operations
|
$ | 44,020 | $ | 22,775 | ||||
Earnings from discontinued operations, net of tax
|
- | 2,868 | ||||||
Net earnings
|
$ | 44,020 | $ | 25,643 | ||||
Less: Net loss attributable to noncontrolling interest
|
(349 | ) | (5,554 | ) | ||||
Net earnings attributable to Acxiom
|
$ | 44,369 | $ | 31,197 | ||||
Basic earnings per share:
|
||||||||
Net earnings from continuing operations
|
$ | 0.59 | $ | 0.28 | ||||
Net earnings from discontinued operations
|
- | 0.04 | ||||||
Net earnings
|
$ | 0.59 | $ | 0.32 | ||||
Net earnings attributable to Acxiom stockholders
|
$ | 0.59 | $ | 0.39 | ||||
Diluted earnings per share:
|
||||||||
Net earnings from continuing operations
|
$ | 0.57 | $ | 0.28 | ||||
Net earnings from discontinued operations
|
- | 0.04 | ||||||
Net earnings
|
$ | 0.57 | $ | 0.32 | ||||
Net earnings attributable to Acxiom stockholders
|
$ | 0.58 | $ | 0.39 | ||||
See accompanying notes to condensed consolidated financial statements.
|
For the Three Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Net earnings
|
$ | 14,449 | $ | 2,651 | ||||
Other comprehensive income:
|
||||||||
Change in foreign currency translation adjustment
|
862 | 1,528 | ||||||
Unrealized gain on interest rate swap
|
200 | 494 | ||||||
Other comprehensive income
|
1,062 | 2,022 | ||||||
Comprehensive income
|
15,511 | 4,673 | ||||||
Less: Comprehensive loss attributable to noncontrolling interest
|
(76 | ) | (5,279 | ) | ||||
Comprehensive income attributable to Acxiom stockholders
|
$ | 15,587 | $ | 9,952 | ||||
See accompanying notes to condensed consolidated financial statements.
|
For the Nine Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Net earnings
|
$ | 44,020 | $ | 25,643 | ||||
Other comprehensive income (loss):
|
||||||||
Change in foreign currency translation adjustment
|
1,046 | (4,190 | ) | |||||
Unrealized gain on interest rate swap
|
67 | 194 | ||||||
Other comprehensive income (loss)
|
1,113 | (3,996 | ) | |||||
Comprehensive income
|
45,133 | 21,647 | ||||||
Less: Comprehensive loss attributable to noncontrolling interest
|
(349 | ) | (5,554 | ) | ||||
Comprehensive income attributable to Acxiom stockholders
|
$ | 45,482 | $ | 27,201 | ||||
See accompanying notes to condensed consolidated financial statements.
|
Accumulated
|
|||||||||||||||||||||||
Common Stock
|
Additional
|
other
|
Treasury Stock
|
||||||||||||||||||||
Number
|
paid-in
|
Retained
|
comprehensive
|
Number
|
Noncontrolling
|
Total
|
|||||||||||||||||
of shares
|
Amount
|
Capital
|
earnings
|
income
|
of shares
|
Amount
|
Interest
|
Equity
|
|||||||||||||||
Balances at March 31, 2012
|
120,027,013
|
$12,003
|
$ 860,165
|
$ 536,359
|
$13,601
|
(43,213,027)
|
$(810,381)
|
$ 108
|
$611,855
|
||||||||||||||
Employee stock awards, benefit plans and other issuances
|
590,028
|
59
|
8,594
|
-
|
-
|
(56,600)
|
(790)
|
-
|
7,863
|
||||||||||||||
Restricted stock units vested
|
464,688
|
46
|
(46)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
Non-cash share-based compensation
|
-
|
-
|
8,906
|
-
|
-
|
-
|
-
|
-
|
8,906
|
||||||||||||||
Acquisition of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(4,059,090)
|
(62,722)
|
-
|
(62,722)
|
||||||||||||||
Comprehensive income:
|
|||||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
-
|
1,046
|
-
|
-
|
-
|
1,046
|
||||||||||||||
Unrealized loss on interest rate swap
|
-
|
-
|
-
|
-
|
67
|
-
|
-
|
-
|
67
|
||||||||||||||
Net earnings (loss)
|
-
|
-
|
-
|
44,369
|
-
|
-
|
-
|
(349)
|
44,020
|
||||||||||||||
Balances at December 31, 2012
|
121,081,729
|
$12,108
|
$ 877,619
|
$ 580,728
|
$14,714
|
(47,328,717)
|
$(873,893)
|
$ (241)
|
$611,035
|
||||||||||||||
|
See accompanying notes to condensed consolidated financial statements
|
For the Nine Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$ | 44,020 | $ | 25,643 | ||||
Adjustments to reconcile net earnings to net cash from operating activities:
|
||||||||
Depreciation and amortization
|
89,594 | 103,240 | ||||||
Loss on disposal or impairment of assets
|
25 | 183 | ||||||
Impairment of goodwill and other intangibles
|
- | 17,803 | ||||||
Deferred income taxes
|
(6,428 | ) | 2,539 | |||||
Non-cash share-based compensation expense
|
8,906 | 6,910 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(13,925 | ) | (2,763 | ) | ||||
Other assets
|
756 | (202 | ) | |||||
Deferred costs
|
(1,600 | ) | (1,879 | ) | ||||
Accounts payable and other liabilities
|
(32,607 | ) | 7,391 | |||||
Deferred revenue
|
(12,830 | ) | 14,143 | |||||
Net cash provided by operating activities
|
75,911 | 173,008 | ||||||
Cash flows from investing activities:
|
||||||||
Disposition of operations
|
- | (1,043 | ) | |||||
Capitalized software development costs
|
(13,190 | ) | (3,167 | ) | ||||
Capital expenditures
|
(21,976 | ) | (39,147 | ) | ||||
Payments received for investments
|
- | 370 | ||||||
Data acquisition costs
|
(6,464 | ) | (8,549 | ) | ||||
Net cash paid in acquisitions
|
- | (255 | ) | |||||
Net cash used in investing activities
|
(41,630 | ) | (51,791 | ) | ||||
Cash flows from financing activities:
|
||||||||
Payments of debt
|
(19,790 | ) | (145,768 | ) | ||||
Acquisition liability payment
|
- | (326 | ) | |||||
Acquisition of treasury stock
|
(65,356 | ) | (42,827 | ) | ||||
Sale of common stock
|
7,863 | 7,318 | ||||||
Contingent consideration paid for prior acquisitions
|
(287 | ) | - | |||||
Net cash used in financing activities
|
(77,570 | ) | (181,603 | ) | ||||
Effect of exchange rate changes on cash
|
(139 | ) | (724 | ) | ||||
Net change in cash and cash equivalents
|
(43,428 | ) | (61,110 | ) | ||||
Cash and cash equivalents at beginning of period
|
229,648 | 206,973 | ||||||
Cash and cash equivalents at end of period
|
$ | 186,220 | $ | 145,863 | ||||
For the Nine Months ended
December 31
|
||||||||
2012
|
2011
|
|||||||
Supplemental cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 9,678 | $ | 15,491 | ||||
Income taxes
|
48,268 | 15,171 | ||||||
Payments on capital leases and installment payment arrangements
|
12,948 | 13,687 | ||||||
Prepayments of debt
|
- | 125,000 | ||||||
Other debt payments
|
6,842 | 7,081 | ||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment under capital leases and installment payment arrangements
|
2,157 | 8,733 | ||||||
See accompanying notes to condensed consolidated financial statements.
|
||||||||
For the quarter ended
December 31
|
For the nine months ended
December 31
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Basic earnings per share:
|
||||||||||||||||
Net earnings from continuing operations
|
$ | 14,449 | $ | 1,837 | $ | 44,020 | $ | 22,775 | ||||||||
Net earnings from discontinued operations
|
- | 814 | - | 2,868 | ||||||||||||
Net earnings
|
$ | 14,449 | $ | 2,651 | $ | 44,020 | $ | 25,643 | ||||||||
Net loss attributable to noncontrolling interest
|
(76 | ) | (5,279 | ) | (349 | ) | (5,554 | ) | ||||||||
Net earnings attributable to Acxiom
|
$ | 14,525 | $ | 7,930 | $ | 44,369 | $ | 31,197 | ||||||||
Basic weighted-average shares outstanding
|
74,103 | 78,189 | 75,195 | 80,039 | ||||||||||||
Basic earnings per share:
|
||||||||||||||||
Continuing operations
|
$ | 0.19 | $ | 0.02 | $ | 0.59 | $ | 0.28 | ||||||||
Discontinued operations
|
- | $ | 0.01 | - | $ | 0.04 | ||||||||||
Net earnings
|
$ | 0.19 | $ | 0.03 | $ | 0.59 | $ | 0.32 | ||||||||
Net loss attributable to noncontrolling interest
|
- | $ | (0.07 | ) | - | $ | (0.07 | ) | ||||||||
Net earnings attributable to Acxiom
|
$ | 0.20 | $ | 0.10 | $ | 0.59 | $ | 0.39 | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Basic weighted-average shares outstanding
|
74,103 | 78,189 | 75,195 | 80,039 | ||||||||||||
Dilutive effect of common stock options, warrants, and restricted stock as computed under the treasury stock method
|
1,775 | 831 | 1,792 | 838 | ||||||||||||
Diluted weighted-average shares outstanding
|
75,878 | 79,020 | 76,987 | 80,877 | ||||||||||||
Diluted earnings per share:
|
||||||||||||||||
Continuing operations
|
$ | 0.19 | $ | 0.02 | $ | 0.57 | $ | 0.28 | ||||||||
Discontinued operations
|
- | $ | 0.01 | - | $ | 0.04 | ||||||||||
Net earnings
|
$ | 0.19 | $ | 0.03 | $ | 0.57 | $ | 0.32 | ||||||||
Net loss attributable to noncontrolling interest
|
- | $ | (0.07 | ) | - | $ | (0.07 | ) | ||||||||
Net earnings attributable to Acxiom
|
$ | 0.19 | $ | 0.10 | $ | 0.58 | $ | 0.39 | ||||||||
For the quarter ended
December 31
|
For the nine months ended
December 31
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Number of shares outstanding under options, warrants and restricted stock units
|
4,752 | 9,515 | 7,872 | 9,438 | ||||||||||||
Range of exercise prices for options and warrants
|
$ | 17.76-$62.06 | $ | 12.25-$62.06 | $ | 13.10-$62.06 | $ | 13.14-$62.06 | ||||||||
Number
of shares
|
Weighted-average exercise price
per share
|
Weighted-average remaining contractual term (in years)
|
Aggregate intrinsic value
(in thousands)
|
|||||||||||||
Outstanding at March 31, 2012
|
8,322,077 | $ | 20.91 | |||||||||||||
Granted
|
497,409 | $ | 13.31 | |||||||||||||
Exercised
|
(243,026 | ) | $ | 13.14 | $ | 1,050 | ||||||||||
Forfeited or cancelled
|
(207,993 | ) | $ | 18.66 | ||||||||||||
Outstanding at December 31, 2012
|
8,368,467 | $ | 20.74 |