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UNITED STATES 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
Date of report (Date of earliest event reported):
May 9, 2007
ALLIANCE DATA SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Charter)
         
DELAWARE   001-15749   31-1429215
(State or Other Jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification No.)
17655 WATERVIEW PARKWAY
DALLAS, TEXAS 75252
(Address and Zip Code of Principal Executive Offices)
(972) 348-5100
(Registrant’s Telephone Number, including Area Code)
NOT APPLICABLE
(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
 
 

 

 

ITEM 7.01. Regulation FD Disclosure
     Attached is a slide presentation to be 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: May 9, 2007  By:   /s/ Edward J. Heffernan    
    Edward J. Heffernan   
    Executive Vice President and
Chief Financial Officer 		  
 

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EXHIBIT INDEX
     
EXHIBIT    
NUMBER   DESCRIPTION
99.1
  Investor Presentation Materials.

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exv99w1
 

EXHIBIT 99.1
Alliance Data NYSE: ADS Q2 2007

 

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: Driving Loyalty Through Transaction-Rich Businesses AIR MILES 135 Sponsors (Canada) Abacus 1,500 Retailers External Coalition WPS Union Gas Green Mountain Puget Sound Utility Epsilon Hilton HHonors(r) Bank of America CapitalOne Circuit City Individual Programs Epsilon Citibank ThankYouSM Network Internal Coalition Pottery Barn Victoria Secret Fortunoff J. Crew Ann Taylor Private Label 50% 30% 35% 45% 10% 15% 2007E 2004 % Consolidated Revenues Figures will not total 100% due to exclusion of non-core businesses

 

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 '06 '07E '00 '01 '02 '03 '04 '05 '06 '07E '00 '01 '02 '03 '04 '05 '06 '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 30% CAGR 37% CAGR $1,998 $515 $3.14 ^$2,200 ^$615 ^$3.60

 

Operating Leverage ADJ. EBITDA Margin Goal: 50bps Expansion per Year 16.0% 14.5% 16.7% 20.1% '00 '01 '02 '03 '04 '05 '06 '07E Averaging over 100 bps per Year 22.2% 22.6% 25.8% 27.9%

 

2007 Guidance Revenues ^ $2.2 Billion EBITDA ^ $615 Million Cash EPS ^ $3.60 Includes "playing through" at least 25¢ of growover (suggests "normalized" growth of 25% plus)

 

2007 Est. Free Cash Flow ($MM, Except per Share) ADJ. EBITDA $615 Loyalty Cash Flow Adj. 30 Operating EBITDA $645 Less Capex / Int. / Taxes (335) Free Cash Flow $310 Per Share $3.80

 

Marketing Services - 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 - U. S. Solid Mid-teens Growth or Higher Top 25 Clients: 10 Year Average Tenure Clients: Hilton Hotels, Pfizer, AOL, Office Depot, Nestle Purina PetCare, AstraZeneca, Midas, Bank of America Key Verticals: Financial Services, Retail, Hospitality, Pharma, Sources of Future Growth: Cross Selling Other Marketing Services Cross Selling Alliance Data Services New Clients Market Opportunity: (Large, Consumer-based Companies) Targets Fortune 1000 Companies 10% Are Epsilon Clients 5-6 Significant Adds Per Year

 

Strategic Consulting & Creative Services Data Services Database Services Analytics Services Interactive Delivery Services Driving Loyalty Through Transaction-Rich Businesses Offering the most comprehensive database marketing services in the world

 

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: 280+ Potential Clients (30% are current Abacus clients) 130+ Existing Programs Today (Outsourced and In-House) 80+ Alliance Data Clients (20% are also Abacus clients) 4 New Client Adds Per Year

 

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, 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

 

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