Acxiom Announces Second Quarter Fiscal 2009 Results

Acxiom^® Corporation (NASDAQ: ACXM) today announced financial results for the second quarter of its 2009 fiscal year ended September 30, 2008. Acxiom will hold a conference call at 4:30 p.m. CDT 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.

Revenue for the second quarter of fiscal 2009 was $328.9 million, compared to $348.9 million in the second quarter of fiscal 2008. Income from operations for the quarter ended September 30, 2008 was $34.3 million, compared with $18.2 million for the period ended September 30, 2007. Earnings per diluted share for the quarter were $0.20, versus earnings of $0.11 per diluted share in the prior-year period. The current-year quarter included unusual gain items of $2.4 million. The prior-year quarter included unusual loss items of $14.8 million. If unusual items were excluded, earnings per diluted share would be $0.18 and $0.15 in the current quarter and prior-year quarter, respectively.

For the six-month period ended September 30, 2008, revenue totaled $660.0 million, versus $683.5 million for the comparable prior-year period. Income from operations for the current six-month period was $59.9 million, compared to $18.8 million for the six months ended September 30, 2007. Earnings per diluted share were $.34 for the six months ended September 30, 2008 versus a loss of $.06 per diluted share in the prior-year six-month period. The current-year period includes unusual gain items of $4.0 million. The prior-year period includes the impact of $35.4 million in unusual expense items. Excluding unusual items, earnings per diluted share would be $.31 and $.21 in the current six-month period and prior-year six-month period, respectively.

John Meyer, Acxiom Corporation’s Chief Executive Officer and President, commented, "Overall, I am satisfied with our second quarter results. We have reduced our operating expenses and improved our operating cash flow in this difficult economic environment. We are focused on managing the business efficiently during these challenging times while we implement the strategies and measures in our global sales organization that we believe will lead to renewed revenue growth for Acxiom.”

Second Quarter 2009 Highlights:

• Revenue of $328.9 million compared to $348.9 million in the second quarter a year ago.
• Income from operations of $34.3 million compared to $18.2 million in the second quarter last year. Income from operations for the current year included unusual gain items of $2.4 million. The prior year quarter included $14.8 million of unusual expense items.
• Earnings per diluted share of $0.20 compared to earnings per diluted share of $0.11 in the second quarter of fiscal 2008. Excluding the impact of unusual items, earnings per diluted share would be $0.18 in the current period and $0.15 in the prior-year period.
• Operating cash flow of $86.8 million compared to $33.4 million in the second quarter a year ago.
• Free cash flow available to equity of $71.6 million compared to negative $11.3 million a year ago. Free cash flow available to equity in the current quarter includes the proceeds of $24.2 million from the sale of a building. 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 press release.

Operational Highlights:

• Information Services: This segment includes the company’s global lines of business for Customer Data Integration (CDI) and Marketing Services, Digital Marketing Services, Information Technology Services, and Consulting Services. Revenue for the quarter was $233.6 million, compared to $245.0 million in the second quarter of the previous year. Operating income for the quarter was $40.6 million, compared to $35.9 million in the second quarter of fiscal 2008. Prior year amounts included $4.9 million of unusual charges. For the six months ended September 30, 2008, revenue totaled $470.3 million, compared to revenue for the prior-year six-month period of $485.4 million. Operating income for the current six-month period equaled $79.3 million versus $69.9 million for the six-month period ended September 30, 2007. The prior-year six-month period included unusual charges of $10.0 million.
• Information Products: This segment is comprised of the company’s global Information Products lines of business and the U.S. Background Screening Products line of business. Revenue for the quarter was $95.3 million, compared with $103.8 million in the second quarter of the previous year. Operating income for the quarter was $8.5 million, compared to $11.7 million in the second quarter of the previous year. Revenue for the six months ended September 30, 2008 was $189.7 million compared to $198.1 million for the prior-year six-month period. Operating income for the current-year six-month period was $13.1 million compared to operating income of $13.8 million for the six-month period ended September 30, 2007.
• Corporate and Other Expenses: For the quarter ended September 30, 2008, corporate and other expenses totaled $14.8 million, compared to $29.3 million for the period ended September 30, 2007. The current quarter includes unusual gain items of $2.4 million. The prior period included unusual expense items of $9.9 million. For the six months ended September 30, 2008, corporate and other expenses totaled $32.5 million, compared to $64.9 million for the period ended September 30, 2007. The current period includes unusual gain items of $2.9 million. The prior period included unusual expense items of $25.3 million.

Other Second Quarter Highlights

• During the quarter, the company completed the acquisition of the Database Marketing Solutions division of ChoicePoint Precision Marketing LLC, a subsidiary of ChoicePoint Inc. for a purchase price of $9.0 million. With the purchase, Acxiom added seven clients from multiple industries – including banking, insurance and media – who will benefit from Acxiom’s data integration, analytics, data and multi-channel marketing capabilities worldwide.
• The company completed the acquisition of the direct marketing technology unit of Alvion, LLC for a purchase price of $3.6 million. With this acquisition, Acxiom obtained a proven online marketing list fulfillment platform that can be used by small and medium size businesses that need immediate access to marketing information through a software-as-a-service environment. The platform can also be used on an OEM basis by information product resellers and by larger Acxiom clients that have their own broker networks and rely on quality marketing information.

Outlook

The company provided its outlook for fiscal 2009 at an investor conference on June 17 and affirmed the guidance on July 30, 2008. Based on current results and future expectations, the company is revising its revenue and free cash flow to equity estimates for the current year. The expectation for earnings per diluted share remains the same. Updated estimates for fiscal 2009 are as follows:

• Revenue is expected to be in the range of $1.3 billion to $1.34 billion.
• Earnings per diluted share, excluding unusual items, are expected to be in the range of $0.66 to $0.72.
• Free cash flow to equity, which is a non-GAAP measure, is expected to be in the range of $85 million to $95 million.

Web Link to Financials

http://www.acxiom.com/FY09_Q2_Financials is a link to the detailed financial information we typically attach to our earnings releases.

About Acxiom Corporation

The global leader in interactive marketing services, Acxiom connects clients with their customers through deep consumer insight, powering effective and profitable marketing initiatives and business decisions. Our consultative approach spans multiple industries and incorporates decades of experience in consumer data and analytics, information technology, data integration and consulting solutions for effective marketing across digital, Internet, email, mobile and direct mail channels. Founded in 1969, Acxiom is headquartered in Little Rock, Ark., and serves clients around the world from locations in the United States, Europe and Asia-Pacific. For more information about Acxiom, visit www.acxiom.com.

Forward Looking Statement

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, earnings per share and free cash flow to equity will be within the estimated ranges for fiscal year 2009. 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.

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.