Acxiom Announces First-Quarter Shortfall
12 Juli 2005 - 2:01PM
Business Wire
Acxiom Corporation (Nasdaq: ACXM) today reported that its revenue
and earnings will fall short of expectations for the first quarter
of fiscal 2006 ended June 30, 2005. The Company expects revenue of
approximately $310 million and diluted earnings per share of
approximately $.06. Acxiom will hold a conference call at 8:00 a.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. Acxiom reported that it is in the
process of implementing a significant expense-reduction program in
the United States and Europe that will include the elimination of
jobs as well as cuts in many other areas. Those broad-based
reductions include the sale or closing of some operations and
reducing costs related to several non-revenue generating areas of
the business. Some of these expense reduction initiatives have
already been completed. The job eliminations are expected to reduce
total payroll costs by about 4 percent or approximately $16 million
annually. "In the U.S., our first-quarter revenues grew 13 percent
year over year - 8 percent adjusting for acquisitions - but our
European business experienced revenue erosion that led to a
reduction of approximately $4 million in profit compared to the
first quarter a year ago," Company Leader Charles D. Morgan said.
"We have assessed every area of our business, in the U.S. and
Europe, and have begun implementing actions to bring our operating
margins in line with our Financial Road Map." "All together, we
expect that our expense reduction plan will reduce total expenses
by approximately $14 million to $16 million a quarter when the
effects are fully realized by the fourth quarter of the fiscal
year." Morgan said the estimate for fiscal 2006 international
revenue was being reduced to a range of $170 million to $190
million, which represents a 10 to 20 percent reduction from fiscal
2005 numbers. Adjusted for the divestiture of the German letter
shop operations, the new range represents a 5 to 15 percent
reduction. The Company is maintaining its long-term expectation for
international revenue growth of 5 to 8 percent. The Company expects
to take a restructuring charge of approximately $20 million in the
second quarter of fiscal 2006, ending Sept. 30, 2005, in connection
with these expense reduction actions. With the exception of
adjustments to the international revenue expectations and excluding
the restructuring charges, the Company also announced that it is
not revising its fiscal 2006 Financial Road Map estimates. "Despite
the shortfall in what is seasonally our weakest quarter, we remain
confident that we have the right combination of people, products,
services and technology to meet our clients' needs and deliver
financial results in line with our Financial Road Map," Morgan
said. 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 China. For more
information, visit www.acxiom.com. 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 with the exception of a
reduction in the projected International revenue and the impact of
restructuring charges the projected revenue, operating margin,
return on assets and return on invested capital, operating cash
flow and free cash flow, borrowings, dividends and other metrics
referred to in the Financial Road Map published on May 11, 2005
will be within the estimated ranges; that the estimations of
revenue, earnings, cash flow, growth rates, restructuring charges,
expense reductions and job eliminations will be within the
estimated ranges; that the business pipeline and our anticipated
cost structure will allow us to continue to meet or exceed revenue,
cash flow and other projections. 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 of an economic slowdown 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 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; 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
Financial Road Map, 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; that Acxiom's computer and communications related
expenses will continue to fall as a percentage of revenue; 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; that the acquisitions of companies operating
primarily outside of the United States 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 United
States, 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.
Acxiom (NASDAQ:ACXM)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Acxiom (NASDAQ:ACXM)
Historical Stock Chart
Von Jul 2023 bis Jul 2024