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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
October 24, 2006
October 24, 2006
ALLIANCE DATA SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Charter)
| DELAWARE | 001-15749 | 31-1429215 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
17655 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
(Address and Zip Code of Principal Executive Offices)
DALLAS, TEXAS 75252
(Address and Zip Code of Principal Executive Offices)
(972) 348-5100
(Registrant’s Telephone Number, including Area Code)
(Registrant’s Telephone Number, including Area Code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the Registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
TABLE OF CONTENTS
| ITEM 7.01. Regulation FD Disclosure | ||||||||
| ITEM 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| Investor Presentation Materials | ||||||||
Table of Contents
ITEM 7.01. Regulation FD Disclosure
Attached is a slide presentation given to investors and others by senior officers of Alliance
Data Systems Corporation.
ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits
| EXHIBIT | ||
| NUMBER | DESCRIPTION | |
99.1
|
Investor Presentation Materials. |
Note: The information contained in this report (including Exhibit 99.1) shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, except as expressly set forth by specific
reference in such a filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Alliance Data Systems Corporation | ||||||||
Date: October 24, 2006
|
By: | /s/ Edward J. Heffernan
|
||||||
| Executive Vice President and | ||||||||
| Chief Financial Officer | ||||||||
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Exhibit 99.1
| Alliance Data NYSE: ADS Q4 2006 |
| Forward-Looking Statements Statements contained in this presentation may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may use words such as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project" and similar expressions as they relate to Alliance Data Systems or our management. When we make forward-looking statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. Although we believe that the expectations reflected in the forward looking statements are reasonable, these forward-looking statements are subject to risks, uncertainties and assumptions including those discussed in our filings with the Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this presentation reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward- looking statements, whether as a result of new information, future results or otherwise. |
| Alliance Data - Financial Profile Growth Company Double-digit Organic Growth Baseline Targets 12% Topline 15% EBITDA 18% Cash EPS Strong Visibility & Predictability Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings Free Cash Flow > Reported Earnings |
| 2000 - 2007 (in $MM, except per share) '00 '01 '02 '03 '04 '05 '06E '07E '00 '01 '02 '03 '04 '05 '06E '07E '00 '01 '02 '03 '04 '05 '06E '07E $670 $770 $865 $1,047 $1,257 $1552 $97 $123 $144 $211 $279 $350 $2.06 $1.54 $1.03 $0.59 $0.49 $0.40 Revenue EBITDA Cash EPS 18% CAGR 29% CAGR 36% CAGR >$1,900 >$495 $3.00 - $3.05 $2,100 $575 $3.50 |
| Operating Leverage ADJ. EBITDA Margin Goal: 50bps Expansion per Year 16.0% 13.8% 14.5% 16.7% 20.1% '99 '00 '01 '02 '03 '04 '05 '06E '07E Averaging over 100 bps per Year 22.2% 22.6% 26.0% 27.4% |
| 2006 Guidance Revenues >$1.9 Billion ?22% EBITDA >$495 Million ?41% Cash EPS $3.00 - $3.05 ?47% |
| 2007 Guidance Revenues $2.1 Billion EBITDA $575 Million Cash EPS $3.50 Includes "playing through" at least 25¢ of growover (suggests "normalized" growth of 25 - 30%) |
| 2007 Est. Free Cash Flow ($MM, Except per Share) ADJ. EBITDA $575 Loyalty Cash Flow Adj. 25 Operating EBITDA $600 Less Capex / Int. / Taxes (300) Free Cash Flow $300 Per Share $3.70 |
| Top Questions Credit Losses Q1 Q2 Q3 Q4 2007 Reported 4.2% 4.7% 5% ^6% ^6% MasterTrust 4.1% 4.4% 4.5% ^6% ^6% Macro-slowdown: 60% Rev's Non-discretionary 40% High Quality with Strong Pipeline 2006: Street consensus vs. company's prior guidance New guidance slightly north of $3.00 Growover for 2007: 25¢ headwind (at least) |
| Marketing Services (1) Canada: Loyalty AIR MILES(r) Program Solid Mid-teens Growth Coalition Loyalty Program Based Upon Everyday Spend - - Not an Airline Program 2/3 of Canada Active Clients: Shell Oil, Safeway, American Express, Bank of Montreal Three Sources of Future Growth: New Sponsor Categories Deeper Commitments from Existing Sponsors Additional Household Penetration Shell Oil of Canada |
| Marketing Services (cont.) (2) US: Epsilon Solid Mid-teens Growth Top 25 Clients: 10 Year Average Tenure Customer Management and Loyalty Solutions: Design and Management of Loyalty Databases Analytical Services Customized Marketing Campaigns Added BigFoot and Doubleclick 20BN Permission Based E-mails Annually Back-end Processing Clients: Hilton Hotels, Principal Financial Group, Pfizer, Nestle Purina PetCare, AstraZeneca, Midas, Bank of America |
| Utility Services Serving Both Regulated & De-regulated Services: Core Processing Customer Care / Call Center Database and Marketing Services Income Stream: Earnings Based on Monthly # Statements Clients: Duke, Entergy, Puget Sound, AEP, Centrica, Georgia Natural Gas, Orlando, City of Austin Market Opportunity: 200 - 250 Potential Clients (US & Canada) $2 - $3 Billion Market $5MM - $10MM Revenue Per Client 2 - 3 New Client Adds Per Year |
| Private Label Services Attractive Market - 1998-03: Double-digit Annual Growth for Outsourcers Services: Private Label Processing Customer Care / Call Center Credit: 700 Score, No Sub-Prime Targeting Database Marketing Services Income Streams: Split Between Processing and Credit Clients: Victoria's Secret, Pottery Barn, Abercrombie & Fitch, Ann Taylor, Crate & Barrel, Dress Barn, Eddie Bauer, Fortunoff Market Opportunity: 296 Potential Clients 126 Existing Programs Today (Outsourced and In-House) 75 Alliance Data Clients 4 New Client Adds Per Year |
| Services with Pricing Power Long-term Relationships 10 - 12 New Clients per Year 10 - 12 New Clients per Year 10 - 12 New Clients per Year 10 - 12 New Clients per Year Our Keys for Success |