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Acxiom Announces Fourth Quarter and Fiscal Year Results

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Acxiom(R) (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its fourth quarter and full year ended March 31, 2015.

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Fourth Quarter Financial Highlights

Total revenue was $257 million, down 4% compared to the fourth quarter of fiscal 2014 as a result of expected IT Infrastructure Management declines.

  • Marketing and Data Services revenue was $206 million, down 2% compared to the fourth quarter of last year. Connectivity revenue, which is included in Marketing and Data Services, was $22 million, up $17 million or 367% compared to the same period a year ago.
  • IT Infrastructure Management revenue was $52 million, down approximately 12% compared to the prior year period.

GAAP loss per share was lower as a result of unusual items associated with European restructuring activities in the prior year.

  • Net loss per share from continuing operations was $0.08 compared to a net loss of $0.33 a year ago. Unusual items, non-cash compensation and intangible asset amortization impacted GAAP earnings per share by $0.32 in the quarter. Unusual items included expenses associated with the Company’s restructuring activities as well as separation and transformation initiatives.
  • Operating cash flow from continuing operations was $34 million, down 15% compared to the same period a year ago. Free cash flow to equity was $4 million compared to $15 million for the prior year period.

Non-GAAP operating income and diluted earnings per share were down as a result of declines in International Marketing and Data Services.

  • Non-GAAP diluted earnings per share were $0.24 compared to $0.26 a year ago. Earnings per share in the current period were positively impacted by a tax adjustment resulting in a $0.04 improvement.
  • Non-GAAP operating income was $31 million, down from $35 million for the same period last year.

Fiscal Year 2015 Financial Highlights

Total revenue was $1,020 million, down 4% compared to $1,062 million in fiscal 2014 as a result of expected IT Infrastructure Management declines.

  • Marketing and Data Services revenue was $805 million, roughly flat compared to the prior year. Connectivity revenue was $63 million, up $48 million or 326% compared to fiscal 2014.
  • IT Infrastructure Management revenue was down year-over-year approximately 16%.

GAAP loss per share was down due to expenses associated with business separation and transformation activities, non-cash compensation and acquired intangible asset amortization, as well as declines in IT Infrastructure Management.

  • Net loss per share from continuing operations was $0.12 compared to earnings per share of $0.14 a year ago. Unusual items, non-cash compensation and intangible asset amortization impacted GAAP earnings per share by $0.90 for the year. Unusual items included expenses associated with the Company’s restructuring activities as well as separation and transformation initiatives.
  • Operating cash flow from continuing operations was $105 million, down 36% compared to the prior year. The decline was driven by changes in working capital, and to a lesser extent, lower earnings.
  • Free cash flow to equity was negative $10 million compared to $76 million last year. The decline was primarily due to lower operating cash flow and higher capital expenditures.

Non-GAAP operating income and diluted earnings per share were down as a result of the declines in the IT Infrastructure Management business.

  • Non-GAAP diluted earnings per share were $0.78 compared to $0.95 in the prior year. Earnings per share in both periods were positively impacted by a tax adjustment resulting in a $0.04 improvement.
  • Non-GAAP operating income was $105 million, down from $126 million in fiscal 2014.

Non-GAAP results exclude unusual items, non-cash compensation and acquired intangible asset amortization. A reconciliation between GAAP and non-GAAP results is attached to this release.

“Connectivity’s strong performance in the fourth quarter capped off a year of explosive adoption and growth,” said Acxiom CEO Scott Howe. “Our focus in fiscal 2016 is on aggressively extending our early lead in onboarding and Connectivity, and returning our Marketing and Data Services business to a position of growth.”

Fourth Quarter Business Highlights

  • The Company added 20 new Connectivity customers during the quarter including several major advertisers and marketing applications. Customers can now onboard and distribute data to a growing universe of over 140 leading publishers and marketing applications.
  • Acxiom joined the newly renamed Facebook Marketing Partners Program. As part of this program, Acxiom’s audience data and onboarding capabilities are available to Facebook marketers globally.
  • The Company expanded its global data partnership with Twitter during the quarter. Twitter’s behavior targeting and partner audiences program will leverage Acxiom’s third party data to power its advertising reach. Advertisers are now able to select from 135 Acxiom audience categories to define or find a group of users on Twitter.
  • Acxiom appointed Rick Erwin as President and General Manager of Audience Solutions, a newly formed business unit comprised of the Company’s Data and Decision Sciences assets. With over two decades of marketing services experience, Erwin, a leading voice in the field of data-driven marketing, will be responsible for driving the strategy, growth and profitability of Acxiom’s industry-leading data and recognition products and services.
  • Subsequent to quarter-end, Acxiom entered into a definitive agreement to sell its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners for total cash consideration of up to $190 million. The sale will allow the Company to focus more sharply on its Marketing and Data Services business.

Financial Outlook

The Company’s guidance excludes the IT Infrastructure Management business as it will be reported as a discontinued operation beginning in the first quarter of fiscal 2016. It also excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom’s estimates for fiscal 2016 are as follows:

  • Revenue from continuing operations in the range of $815 million to $840 million.
  • Earnings per diluted share from continuing operations in the range of $0.45 to $0.50.

Conference Call

Acxiom will hold a conference call at 4:00 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. A slide presentation will be referenced during the call and can be accessed here.

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.

Forward-Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share, the impact of a sale of ITO. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the ITO transaction might not close, or close within the anticipated time frame, due to a failure of one or more closing conditions; the possibility that the expected revenue from the divisions may not be realized within the expected timeframe; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do 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 data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our 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 the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; 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 unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2014, which was filed with the Securities and Exchange Commission on May 28, 2014.

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.

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.

To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended
March 31,
$ %
2015 2014 Variance Variance
Revenue:
Marketing and data services 205,734 209,746 (4,012 ) (1.9 %)
IT Infrastructure management services 51,633 58,816 (7,183 ) (12.2 %)
Total revenue 257,367 268,562 (11,195 ) (4.2 %)
Operating costs and expenses:
Cost of revenue 206,120 198,920 7,200 3.6 %
Selling, general and administrative 43,795 45,519 (1,724 ) (3.8 %)
Impairment of goodwill and other 24,953 (24,953 ) (100.0 %)
Gains, losses and other items, net 12,077 10,673 1,404 13.2 %
Total operating costs and expenses 261,992 280,065 (18,073 ) (6.5 %)
Loss from operations (4,625 ) (11,503 ) 6,878 59.8 %
% Margin -1.8 % -4.3 %
Other income (expense):
Interest expense (2,474 ) (2,558 ) 84 3.3 %
Other, net (763 ) 579 (1,342 ) (231.8 %)
Total other income (expense) (3,237 ) (1,979 ) (1,258 ) (63.6 %)
Loss from continuing operations before income taxes (7,862 ) (13,482 ) 5,620 41.7 %
Income taxes (1,809 ) 12,045 (13,854 ) (115.0 %)
Net loss from continuing operations (6,053 ) (25,527 ) 19,474 76.3 %
Earnings (loss) from discontinued operations, net of tax 14 (3,696 ) 3,710 100.4 %
Net loss (6,039 ) (29,223 ) 23,184 79.3 %
Less: Net earnings attributable to noncontrolling interest
Net loss attributable to Acxiom (6,039 ) (29,223 ) 23,184 79.3 %
Basic loss per share:
Net loss from continuing operations (0.08 ) (0.33 ) 0.26 76.6 %
Earnings (loss) from discontinued operations (0.05 ) 0.05 100.0 %
Net loss (0.08 ) (0.38 ) 0.30 78.9 %
Net loss attributable to Acxiom stockholders (0.08 ) (0.38 ) 0.31 79.6 %
Diluted loss per share:
Net loss from continuing operations (0.08 ) (0.33 ) 0.26 76.6 %
Earnings (loss) from discontinued operations (0.05 ) 0.05 100.0 %
Net loss (0.08 ) (0.38 ) 0.30 78.9 %
Net loss attributable to Acxiom stockholders (0.08 ) (0.38 ) 0.31 79.6 %
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Twelve Months Ended
March 31
$ %
2015 2014 Variance Variance
Revenue:
Marketing and data services 804,911 805,153 (242 ) (0.0 %)
IT Infrastructure management services 215,148 257,125 (41,977 ) (16.3 %)
Total revenue 1,020,059 1,062,278 (42,219 ) (4.0 %)
Operating costs and expenses:
Cost of revenue 807,469 795,562 11,907 1.5 %
Selling, general and administrative 188,561 169,376 19,185 11.3 %
Impairment of goodwill and other 24,953
Gains, losses and other items, net 24,633 21,914 2,719 12.4 %
Total operating costs and expenses 1,020,663 1,011,805 8,858 0.9 %
Income from operations (604 ) 50,473 (51,077 ) (101.2 %)
% Margin -0.1 % 4.8 %
Other income (expense):
Interest expense (10,050 ) (11,671 ) 1,621 13.9 %
Other, net (1,325 ) 1,817 (3,142 ) (172.9 %)
Total other income (expense) (11,375 ) (9,854 ) (1,521 ) (15.4 %)
Earnings (loss) from continuing operations before income taxes (11,979 ) 40,619 (52,598 ) (129.5 %)
Income taxes (2,832 ) 29,627 (32,459 ) (109.6 %)
Net earnings (loss) from continuing operations (9,147 ) 10,992 (20,139 ) (183.2 %)
Loss from discontinued operations, net of tax (1,884 ) (2,189 ) 305 13.9 %
Net earnings (loss) (11,031 ) 8,803 (19,834 ) (225.3 %)
Less: Net loss attributable to noncontrolling interest (60 ) 60 100.0 %
Net earnings (loss) attributable to Acxiom (11,031 ) 8,863 (19,894 ) (224.5 %)
Basic earnings (loss) per share:
Net earnings (loss) from continuing operations (0.12 ) 0.15 (0.27 ) (180.6 %)
Earnings (loss) from discontinued operations (0.02 ) (0.03 ) 0.01 33.3 %
Net earnings (loss) (0.14 ) 0.12 (0.26 ) (216.7 %)
Net earnings (loss) attributable to Acxiom stockholders (0.14 ) 0.12 (0.26 ) (220.6 %)
Diluted earnings (loss) per share:
Net earnings (loss) from continuing operations (0.12 ) 0.14 (0.26 ) (183.1 %)
Earnings (loss) from discontinued operations (0.02 ) (0.03 ) 0.01 33.3 %
Net earnings (loss) (0.14 ) 0.11 (0.25 ) (227.3 %)
Net earnings (loss) attributable to Acxiom stockholders (0.14 ) 0.12 (0.26 ) (224.2 %)
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2015 2014 2015 2014
Earnings (loss) from continuing operations before income taxes (7,862 ) (13,482 ) (11,979 ) 40,619
Income taxes (1,809 ) 12,045 (2,832 ) 29,627
Net earnings (loss) from continuing operations (6,053 ) (25,527 ) (9,147 ) 10,992
Earnings (loss) from discontinued operations, net of tax 14 (3,696 ) (1,884 ) (2,189 )
Net earnings (loss) (6,039 ) (29,223 ) (11,031 ) 8,803
Less: Net earnings (loss) attributable to noncontrolling interest (60 )
Net earnings (loss) attributable to Acxiom (6,039 ) (29,223 ) (11,031 ) 8,863
Earnings (loss) per share attributable to Acxiom stockholders:
Basic (0.08 ) (0.38 ) (0.14 ) 0.12
Diluted (0.08 ) (0.38 ) (0.14 ) 0.12
Unusual items:
Legal settlement accruals (gains, losses, and other) 4,200
Purchased intangible asset amortization (cost of revenue) 3,779 68 11,446 340
Live Ramp acquisition costs (gains, losses, and other) 820
Impairment of goodwill and other assets 24,953 24,953
Non-cash stock compensation (cost of revenue and SG&A) 8,348 3,581 28,886 13,925
Restructuring charges and other adjustments (gains, losses, and other) 12,077 10,673 23,813 17,714
Separation and transformation costs (SG&A) 7,044 6,924 36,488 14,007
Accelerated amortization (cost of revenue) 4,316 4,316
Gain on investment (other income) (2,567 )
Total unusual items, continuing operations 35,564 46,199 105,769 72,572

Earnings from continuing operations before income taxes and excluding unusual items

27,702 32,717 93,790 113,191
Income taxes 8,706 12,474 32,653 40,015
Non-GAAP earnings from continuing operations 18,996 20,243 61,137 73,176
Earnings from discontinued operations, net of tax
Non-GAAP net earnings 18,996 20,243 61,137 73,176
Less: Net loss attributable to noncontrolling interest (60 )
Non-GAAP Net earnings attributable to Acxiom 18,996 20,243 61,137 73,236
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic 0.25 0.27 0.79 0.98
Diluted 0.24 0.26 0.78 0.95
Basic weighted average shares 77,427 76,293 77,106 74,690
Diluted weighted average shares 79,027 78,450 78,495 76,954
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2015 2014 2015 2014
Income from operations (4,625 ) (11,503 ) (604 ) 50,473
Unusual items 35,564 46,199 105,769 75,139
Income from operations before unusual items 30,939 34,696 105,165 125,612
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Three Months Ended
March 31, March 31,
2015 2014
Basic loss per share from continuing operations:
Numerator – net loss (6,053 ) (25,527 )
Denominator – weighted-average shares outstanding 77,427 76,293
Basic loss per share (0.08 ) (0.33 )
Basic loss per share – net earnings attributable to Acxiom stockholders:
Numerator – net loss attributable to Acxiom (6,039 ) (29,223 )
Denominator – weighted-average shares outstanding 77,427 76,293
Basic loss per share – net loss attributable to Acxiom stockholders (0.08 ) (0.38 )
Diluted loss per share from continuing operations:
Numerator – net loss (6,053 ) (25,527 )
Denominator – weighted-average shares outstanding 77,427 76,293
Dilutive effect of common stock options, warrants and restricted stock
77,427 76,293
Diluted loss per share from continuing operations (0.08 ) (0.33 )
Diluted loss per share – net earnings attributable to Acxiom stockholders:
Numerator – net loss attributable to Acxiom (6,039 ) (29,223 )
Denominator – weighted-average shares outstanding 77,427 76,293
Dilutive effect of common stock options, warrants, and restricted stock
77,427 76,293
Diluted loss per share – net loss attributable to Acxiom stockholders (0.08 ) (0.38 )
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
For the Twelve Months Ended
March 31, March 31,
2015 2014
Basic earnings (loss) per share from continuing operations:
Numerator – net earnings (loss) (9,147 ) 10,992
Denominator – weighted-average shares outstanding 77,106 74,690
Basic earnings (loss) per share (0.12 ) 0.15
Basic earnings (loss) per share – net earnings (loss) attributable to Acxiom stockholders:
Numerator – net earnings (loss) attributable to Acxiom (11,031 ) 8,863
Denominator – weighted-average shares outstanding 77,106 74,690
Basic earnings (loss) per share – net earnings (loss) attributable to Acxiom stockholders (0.14 ) 0.12
Diluted earnings (loss) per share from continuing operations:
Numerator – net earnings (loss) (9,147 ) 10,992
Denominator – weighted-average shares outstanding 77,106 74,690
Dilutive effect of common stock options, warrants and restricted stock 2,264
77,106 76,954
Diluted earnings (loss) per share from continuing operations (0.12 ) 0.14
Diluted earnings (loss) per share – net earnings (loss) attributable to Acxiom stockholders:
Numerator – net earnings (loss) attributable to Acxiom (11,031 ) 8,863
Denominator – weighted-average shares outstanding 77,106 74,690
Dilutive effect of common stock options, warrants, and restricted stock 2,264
77,106 76,954
Diluted earnings (loss) per share – net earnings (loss) attributable to Acxiom stockholders (0.14 ) 0.12
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
March 31, March 31,
Revenue: 2015 2014
Marketing and data services 205,734 209,746
IT Infrastructure management services 51,633 58,816
Total revenue 257,367 268,562
Income from continuing operations:
Marketing and data services 13,356 27,244
IT Infrastructure management services 5,456 3,803
Corporate (23,437 ) (42,550 )
Total loss from continuing operations (4,625 ) (11,503 )
Margin:
Marketing and data services 6.5 % 13.0 %
IT Infrastructure management services 10.6 % 6.5 %
Total margin -1.8 % -4.3 %
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Twelve Months Ended
March 31, March 31,
Revenue: 2015 2014
Marketing and data services 804,911 805,153
IT Infrastructure management services 215,148 257,125
Total revenue 1,020,059 1,062,278
Income from continuing operations:
Marketing and data services 46,728 78,500
IT Infrastructure management services 18,105 32,847
Corporate (65,437 ) (60,874 )
Total income from continuing operations (604 ) 50,473
Margin:
Marketing and data services 5.8 % 9.7 %
IT Infrastructure management services 8.4 % 12.8 %
Total margin -0.1 % 4.8 %
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS
(Unaudited)
(Dollars in thousands, except earnings per share)
For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2015 2014 2015 2014
Marketing and data services income from operations 13,356 27,244 46,728 78,500
Unusual items:
Purchased intangible asset amortization 3,779 68 11,446 340
Non-cash stock compensation 8,594 2,772 26,927 10,699

Marketing and data services income from operations before unusual items

25,729 30,084 85,101 89,539
Margin 12.5 % 14.3 % 10.6 % 11.1 %

IT infrastructure management services income from operations

5,456 3,803 18,105 32,847
Unusual items:
Non-cash stock compensation (246 ) 809 1,959 3,226

IT infrastructure management services income from operations before unusual items

5,210 4,612 20,064 36,073
Margin 10.1 % 7.8 % 9.3 % 14.0 %
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
March 31, March 31, $ %
2015 2014 Variance Variance

Assets

Current assets:
Cash and cash equivalents 141,010 418,586 (277,576 ) (66.3 %)
Trade accounts receivable, net 162,639 160,718 1,921 1.2 %
Deferred income taxes 28,372 12,870 15,502 120.5 %
Refundable income taxes 5,239 11,535 (6,296 ) (54.6 %)
Restricted cash held in escrow 31,000 31,000 100.0 %
Other current assets 45,682 54,484 (8,802 ) (16.2 %)
Assets of discontinued operations 112 7,332 (7,220 ) (98.5 %)
Total current assets 414,054 665,525 (251,471 ) (37.8 %)
Property and equipment 723,006 852,236 (129,230 ) (15.2 %)
Less – accumulated depreciation and amortization 502,416 635,330 (132,914 ) (20.9 %)
Property and equipment, net 220,590 216,906 3,684 1.7 %
Software, net of accumulated amortization 68,962 39,425 29,537 74.9 %
Goodwill 568,870 358,384 210,486 58.7 %
Purchased software licenses, net of accumulated amortization 13,494 18,584 (5,090 ) (27.4 %)
Other assets, net 36,454 24,477 11,977 48.9 %
1,322,424 1,323,301 (877 ) (0.1 %)

Liabilities and Stockholders’ Equity

Current liabilities:
Current installments of long-term debt 32,885 28,567 4,318 15.1 %
Trade accounts payable 38,951 36,179 2,772 7.7 %
Accrued payroll and related expenses 39,026 62,182 (23,156 ) (37.2 %)
Other accrued expenses 67,867 70,412 (2,545 ) (3.6 %)
Acquisition escrow payable 31,000 31,000 100.0 %
Deferred revenue 37,278 47,638 (10,360 ) (21.7 %)
Income taxes 241 (241 ) (100.0 %)
Liabilities of discontinued operations 1,008 4,250 (3,242 ) (76.3 %)
Total current liabilities 248,015 249,469 (1,454 ) (0.6 %)
Long-term debt 254,539 289,043 (34,504 ) (11.9 %)
Deferred income taxes 103,391 90,226 13,165 14.6 %
Other liabilities 13,222 11,706 1,516 13.0 %
Stockholders’ equity:
Common stock 12,794 12,584 210 1.7 %
Additional paid-in capital 1,034,526 981,985 52,541 5.4 %
Retained earnings 591,798 602,829 (11,031 ) (1.8 %)
Accumulated other comprehensive income 9,413 13,662 (4,249 ) (31.1 %)
Treasury stock, at cost (945,274 ) (928,203 ) (17,071 ) (1.8 %)
Total stockholders’ equity 703,257 682,857 20,400 3.0 %
1,322,424 1,323,301 (877 ) (0.1 %)
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
March 31,
2015 2014
Cash flows from operating activities:
Net earnings (loss) (6,039 ) (29,223 )
Loss (earnings) from discontinued operations, net of tax (14 ) 3,696
Non-cash operating activities:
Depreciation and amortization 33,863 26,728
Disposal or impairment of assets 1,976 (9 )
Impairment of goodwill and other 24,953
Deferred income taxes (7,669 ) 5,763
Non-cash stock compensation expense 8,348 3,581
Changes in operating assets and liabilities:
Accounts receivable (8,025 ) 4,308
Other assets 12,244 (8,192 )
Deferred costs 4 (417 )
Accounts payable and other liabilities 273 12,044
Deferred revenue (497 ) (2,545 )
Net cash provided by operating activities 34,464 40,687
Cash flows from investing activities:
Capitalized software (3,602 ) (5,408 )
Capital expenditures (17,512 ) (14,409 )
Data acquisition costs (374 ) (3,085 )
Payments from investments 190
Net cash paid in acquisitions (500 )
Net cash provided (used) by investing activities (21,488 ) (23,212 )
Cash flows from financing activities:
Payments of debt (8,606 ) (5,728 )
Sale of common stock, net of stock acquired for withholding taxes 5,846 11,384
Tax impact of stock options, warrants, and restricted stock 4,645 11,295
Net cash provided (used) by financing activities 1,885 16,951
Cash flows from discontinued operations:
From operating activities (12 ) 3,147
From investing activities (92 )
Net cash provided by discontinued operations (104 ) 3,147
Effect of exchange rate changes on cash (638 ) 105
Net change in cash and cash equivalents 14,119 37,678
Cash and cash equivalents at beginning of period 126,891 380,908
Cash and cash equivalents at end of period 141,010 418,586
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 2,473 2,495
Income taxes (4,383 ) 5,928
Payments on capital leases and installment payment arrangements 574 1,465
Other debt payments, excluding line of credit 8,032 4,263
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Twelve Months Ended
March 31
2015 2014
Cash flows from operating activities:
Net earnings (loss) (11,031 ) 8,803
Loss (earnings) from discontinued operations, net of tax 1,884 2,189
Non-cash operating activities:
Depreciation and amortization 118,834 102,426
Disposal or impairment of assets 1,976 (2,576 )
Loss on early extinguishment of debt 664
Impairment of goodwill and other 24,953
Deferred income taxes (9,689 ) 2,097
Non-cash stock compensation expense 28,886 13,925
Changes in operating assets and liabilities:
Accounts receivable (497 ) 8,272
Other assets 15,727 (1,260 )
Deferred costs (1,484 ) (506 )
Accounts payable and other liabilities (29,142 ) 288
Deferred revenue (10,677 ) 3,966
Net cash provided by operating activities 104,787 163,241
Cash flows from investing activities:
Capitalized software (18,587 ) (24,517 )
Capital expenditures (69,041 ) (39,132 )
Data acquisition costs (1,871 ) (7,745 )
Payments from investments 3,823
Net cash paid in acquisitions (265,672 ) (500 )
Net cash provided (used) by investing activities (355,171 ) (68,071 )
Cash flows from financing activities:
Proceeds from debt 300,000
Payments of debt (28,421 ) (235,895 )
Fees for debt refinancing (4,370 )
Sale of common stock, net of stock acquired for withholding taxes 5,039 80,490
Tax impact of stock options, warrants, and restricted stock 4,645 11,295
Acquisition of treasury stock (9,868 ) (52,663 )
Acquisition of noncontrolling interest (600 )
Net cash provided (used) by financing activities (28,605 ) 98,257
Cash flows from discontinued operations:
From operating activities 197 1,735
From investing activities 2,835 (166 )
Net cash provided (used) by discontinued operations 3,032 1,569
Effect of exchange rate changes on cash (1,619 ) 616
Net change in cash and cash equivalents (277,576 ) 195,612
Cash and cash equivalents at beginning of period 418,586 222,974
Cash and cash equivalents at end of period 141,010 418,586
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 8,673 11,762
Income taxes (3,845 ) 21,702
Payments on capital leases and installment payment arrangements 3,823 8,379
Other debt payments, excluding line of credit 24,598 12,516
Prepayment of debt 215,000
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
06/30/13 09/30/13 12/31/13 03/31/14 YTD FY2014 06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015
Net cash provided by operating activities – continuing operations 16,508 42,255 63,791 40,687 163,241 1,867 25,792 42,664 34,464 104,787
Net cash provided by operating activities – discontinued operations 341 (1,734 ) (19 ) 3,147 1,735 (13 ) 82 140 (12 ) 197
Less:
Payments for investments 3,633 190 3,823
Capitalized software (5,954 ) (7,660 ) (5,495 ) (5,408 ) (24,517 ) (4,969 ) (5,608 ) (4,408 ) (3,602 ) (18,587 )
Capital expenditures (8,912 ) (9,130 ) (6,681 ) (14,409 ) (39,132 ) (19,001 ) (19,396 ) (13,132 ) (17,512 ) (69,041 )
Data acquisition costs (1,961 ) (913 ) (1,786 ) (3,085 ) (7,745 ) (635 ) (468 ) (394 ) (374 ) (1,871 )
Discontinued operations investing activities (8 ) (139 ) (19 ) (166 ) 2,927 (92 ) 2,835
Payments on capital leases and installment payment arrangements (2,900 ) (2,339 ) (1,675 ) (1,465 ) (8,379 ) (1,235 ) (1,084 ) (930 ) (574 ) (3,823 )
Other required debt payments (1,990 ) (2,004 ) (4,259 ) (4,263 ) (12,516 ) (4,267 ) (4,272 ) (8,027 ) (8,032 ) (24,598 )
Total (4,876 ) 18,336 47,490 15,394 76,344 (25,326 ) (4,954 ) 15,913 4,266 (10,101 )
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
Q4 FY15 to Q4 FY14
06/30/13 09/30/13 12/31/13 03/31/14 YTD FY2014 06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 % $
Revenue:
Marketing and data services 187,793 200,952 206,662 209,746 805,153 186,683 204,248 208,246 205,734 804,911 -1.9 % (4,012 )
IT Infrastructure management services 69,385 66,825 62,099 58,816 257,125 55,532 55,789 52,194 51,633 215,148 -12.2 % (7,183 )
Total revenue 257,178 267,777 268,761 268,562 1,062,278 242,215 260,037 260,440 257,367 1,020,059 -4.2 % (11,195 )
Operating costs and expenses:
Cost of revenue 196,105 199,107 201,430 198,920 795,562 192,303 205,318 203,728 206,120 807,469 3.6 % 7,200
Selling, general and administrative 37,615 42,859 43,383 45,519 169,376 46,938 50,483 47,345 43,795 188,561 -3.8 % (1,724 )
Impairment of goodwill and other 24,953 24,953 0 -100.0 % (24,953 )
Gains, losses and other items, net 6,584 4,657 10,673 21,914 7,452 929 4,175 12,077 24,633 13.2 % 1,404
Total operating costs and expenses 233,720 248,550 249,470 280,065 1,011,805 246,693 256,730 255,248 261,992 1,020,663 -6.5 % (18,073 )
Income (loss) from operations 23,458 19,227 19,291 (11,503 ) 50,473 (4,478 ) 3,307 5,192 (4,625 ) (604 ) 59.8 % 6,878
% Margin 9.1 % 7.2 % 7.2 % -4.3 % 4.8 % -1.8 % 1.3 % 2.0 % -1.8 % -0.1 %
Other expense
Interest expense (3,019 ) (2,980 ) (3,114 ) (2,558 ) (11,671 ) (2,571 ) (2,395 ) (2,610 ) (2,474 ) (10,050 ) 3.3 % 84
Other, net 104 (350 ) 1,484 579 1,817 (413 ) (115 ) (34 ) (763 ) (1,325 ) -231.8 % (1,342 )
Total other expense (2,915 ) (3,330 ) (1,630 ) (1,979 ) (9,854 ) (2,984 ) (2,510 ) (2,644 ) (3,237 ) (11,375 ) -63.6 % (1,258 )
Earnings (loss) from continuing operations before income taxes 20,543 15,897 17,661 (13,482 ) 40,619 (7,462 ) 797 2,548 (7,862 ) (11,979 ) 41.7 % 5,620
Income taxes 8,040 6,459 3,083 12,045 29,627 (1,390 ) 2,293 (1,926 ) (1,809 ) (2,832 ) -115.0 % (13,854 )
Net earnings (loss) from continuing operations 12,503 9,438 14,578 (25,527 ) 10,992 (6,072 ) (1,496 ) 4,474 (6,053 ) (9,147 ) 76.3 % 19,474
Earnings (loss) from discontinued operations, net of tax 592 426 489 (3,696 ) (2,189 ) (1,532 ) (48 ) (318 ) 14 (1,884 ) 100.4 % 3,710
Net earnings (loss) 13,095 9,864 15,067 (29,223 ) 8,803 (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) 79.3 % 23,184

Less: Net gain (loss) attributable to noncontrolling interest

(85 ) 25 (60 )
Net earnings (loss) attributable to Acxiom 13,180 9,839 15,067 (29,223 ) 8,863 (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) 79.3 % 23,184

Diluted earnings (loss) per share – net earnings (loss) attributable to Acxiom stockholders

0.17 0.13 0.19 (0.38 ) 0.12 (0.10 ) (0.02 ) 0.05 (0.08 ) (0.14 ) 78.9 % 0.30
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
Q4 FY15 to Q4 FY14
06/30/13 09/30/13 12/31/13 03/31/14 YTD FY2014 06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 % $
Revenue:
Marketing and data services 187,793 200,952 206,662 209,746 805,153 186,683 204,248 208,246 205,734 804,911 -2 % (4,012 )
IT Infrastructure management services 69,385 66,825 62,099 58,816 257,125 55,532 55,789 52,194 51,633 215,148 -12 % (7,183 )
Total revenue 257,178 267,777 268,761 268,562 1,062,278 242,215 260,037 260,440 257,367 1,020,059 -4 % (11,195 )
Income from continuing operations:
Marketing and data services 12,697 16,030 22,529 27,244 78,500 10,272 9,397 13,703 13,356 46,728 -51 % (13,888 )
IT Infrastructure management services 10,761 11,967 6,316 3,803 32,847 4,739 4,130 3,780 5,456 18,105 43 % 1,653
Corporate (8,770 ) (9,554 ) (42,550 ) (60,874 ) (19,489 ) (10,220 ) (12,291 ) (23,437 ) (65,437 ) 45 % 19,113
Total income (loss) from continuing operations 23,458 19,227 19,291 (11,503 ) 50,473 (4,478 ) 3,307 5,192 (4,625 ) (604 ) 60 % 6,878
Margin:
Marketing and data services 6.8 % 8.0 % 10.9 % 13.0 % 9.7 % 5.5 % 4.6 % 6.6 % 6.5 % 5.8 %
IT Infrastructure management services 15.5 % 17.9 % 10.2 % 6.5 % 12.8 % 8.5 % 7.4 % 7.2 % 10.6 % 8.4 %
Total 9.1 % 7.2 % 7.2 % -4.3 % 4.8 % -1.8 % 1.3 % 2.0 % -1.8 % -0.1 %

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