Acxiom Announces Fourth Quarter and Fiscal Year Results

Agrees to Acquire LiveRamp

Exceeds EPS Guidance for the Year

LITTLE ROCK, Ark.--()--Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its fourth quarter and fiscal year ended March 31, 2014.

Fourth Quarter Fiscal 2014

Total revenue for the fourth quarter was $277 million, roughly flat compared to the fourth quarter of fiscal 2013. Loss from operations for the quarter was $15 million compared to income from operations of $20 million for the prior-year period. Excluding non-cash impairment charges and other unusual items, operating income was $32 million, up 43 percent from $22 million for the same period last year. Net loss per diluted share attributable to Acxiom stockholders was $0.38. Excluding non-cash impairment charges and other unusual items, diluted earnings per share were $0.24, up 26 percent from $0.19 a year ago.

Operating cash flow was $44 million for the fourth quarter compared to $74 million for the same period a year ago. Free cash flow to equity decreased to $15 million for the quarter, compared to $42 million for the prior-year period. Free cash flow to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached. Also attached is a schedule outlining the impact of unusual items on the current and prior year results.

Fiscal Year 2014

Total revenue for the fiscal year ended March 31, 2014, was $1,098 million, compared to $1,099 million in fiscal 2013. Earnings per diluted share attributable to Acxiom stockholders were $0.12. Excluding non-cash impairment charges and other unusual items, diluted earnings per share were $0.86, up 13 percent from $0.76 in the prior year.

Operating cash flow increased 10 percent to $165 million during the year compared to $150 million in fiscal 2013. Free cash flow available to equity was $76 million, up 36 percent from $56 million in the prior year. Both operating cash flow and free cash flow to equity were up as a result of improvements in working capital.

The company recorded non-cash impairment charges of approximately $29 million in the fourth quarter in connection with the write-down of the carrying value of goodwill and other long-lived assets associated with its European operations.

“Fiscal 2014 was a year of innovation and transformation,” said Acxiom CEO Scott Howe. “We successfully launched our Audience Operating System™ and Aboutthedata.com™. We tightened our operating focus through the separation of our business units and the exit of our analog paper survey business in Europe. And today, we announced our proposed acquisition of LiveRamp, a leading solution for connecting customer data across marketing applications. Looking ahead to 2015, our focus will be on growing our AOS™ user base, while continuing to innovate and invest in our product portfolio.”

Agreement to Acquire LiveRamp:

Acxiom today announced that it has entered into a definitive agreement to acquire privately held LiveRamp, a leading service for onboarding customer data into digital marketing applications, for approximately $310 million in cash. Please refer to the press release issued today for additional details.

Fourth Quarter Highlights:

  • Acxiom announced a partnership with comScore Inc., a global leader in measuring the digital world and preferred source of digital business analytics, to provide marketers with increased audience reach and media spend ROI across multiple channels. The combination will enable marketers to immediately verify the results of audiences reached by their campaigns, and use those results to quickly optimize current and future campaigns.
  • The company announced a strategic partnership with Marketo Inc., a leading provider of marketing software. The partnership is designed to help marketers utilize advanced data insights to tailor marketing content and offers throughout a customer’s interactions and relationship with a brand.
  • Acxiom signed seven new AOS agreements during the quarter with customers in several key industries including: Financial Services, Retail and Automotive. In addition, Acxiom now has nearly 40 customers utilizing its Data Safe Haven™ and has begun to onboard client data from its partnership with Starcom MediaVest Group.
  • Acxiom won 15 awards from the 2014 Internet Advertising Competition (IAC) for its work with current top-tier customers including Skype, Rodale and Sony, among others.
  • Subsequent to quarter end, Acxiom announced a partnership with SHIFT, a leading marketing software company for social advertisers. The integration of AOS into SHIFT’s Open Marketing Cloud will provide marketers with enhanced insight and the ability to achieve optimal campaign results.

Segment Results:

  • Marketing and Data Services: Revenue for the fourth quarter was $210 million, up from $203 million for the same period a year ago. U.S. revenue increased 5 percent to $181 million in the current quarter compared to $173 million for the fourth quarter of last year. Income from operations for the fourth quarter was $27 million, up 31 percent from $21 million for the prior-year period. Operating margin improved to 13 percent compared to 10 percent for the fourth quarter of last year.
  • IT Infrastructure Management: Revenue for the fourth quarter decreased as expected by 10 percent to $59 million compared to $65 million for the same period a year ago. Income from operations for the recent quarter was $4 million compared to $2 million for the prior-year period. Operating margin was approximately 6 percent, up from 4 percent for the fourth quarter of last year.
  • Other Services: Revenue for the fourth quarter was $9 million, down slightly compared to the prior year. Operating margin improved to approximately 7 percent compared to a loss for the fourth quarter of last year.

Financial Guidance

The following projections are forward-looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward-Looking Statements section of this press release. Our guidance includes the impact of our proposed acquisition of LiveRamp, but excludes the impact of unusual items, acquisition related expenses and non-cash stock compensation expense. Acxiom’s estimates for fiscal 2015 are as follows:

  • We expect revenue for the fiscal year to be down by roughly five percent. The decline in revenue is due to the impact of lost IT Infrastructure Management customers and the exit of our analog paper survey business in Europe.
  • Earnings per diluted share attributable to Acxiom stockholders are expected to be in the range of $0.75 to $0.85. The decline in earnings per share is primarily driven by lost IT Infrastructure Management customers, and to a lesser extent, dilution from the acquisition of LiveRamp and expenses related to the global expansion of AOS. The comparable measure for fiscal 2014 is $0.97. A reconciliation to the comparable GAAP earnings per share measure is attached.

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 for fiscal 2015, statements concerning the proposed acquisition of LiveRamp, statements concerning areas of focus and statements regarding new customers and new product launches and capabilities. 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 LiveRamp transaction may not close or may not close within the expected timeframe, the possibility that the expected revenue from the LiveRamp transaction 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 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, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.

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,
$ %
2014 2013 Variance   Variance
 
Revenue:
Marketing and data services 209,746 202,510 7,236 3.6 %
IT Infrastructure management services 58,816 65,202 (6,386 ) (9.8 %)
Other services 8,646   9,419   (773 ) (8.2 %)
Total revenue 277,208 277,131 77 0.0 %
 
Operating costs and expenses:
Cost of revenue 207,002 213,317 6,315 3.0 %
Selling, general and administrative 45,519 41,681 (3,838 ) (9.2 %)
Impairment of goodwill and other 28,834 - (28,834 ) (100.0 %)
Gains, losses and other items, net 11,052   1,944   (9,108 ) (468.5 %)
 
Total operating costs and expenses 292,407   256,942   (35,465 ) (13.8 %)
 
Income (loss) from operations (15,199 ) 20,189   (35,388 ) (175.3 %)
% Margin -5.5 % 7.3 %
Other income (expense):
Interest expense (2,558 ) (2,959 ) 401 13.6 %
Other, net 579   188   391 208.0 %
 
Total other income (expense) (1,979 ) (2,771 ) 792 28.6 %
 
Earnings (loss) before income taxes (17,178 ) 17,418 (34,596 ) (198.6 %)
 
Income taxes 12,045   4,319   (7,726 ) (178.9 %)
 
Net earnings (loss) (29,223 ) 13,099 (42,322 ) (323.1 %)
 
Less: Net loss attributable to noncontrolling interest -   (139 ) 139 100.0 %
 
Net earnings (loss) attributable to Acxiom (29,223 ) 13,238   (42,461 ) (320.8 %)
 
Basic earnings (loss) per share:
Net earnings (loss) (0.38 ) 0.18   (0.56 ) (311.1 %)
Net earnings (loss) attributable to Acxiom stockholders (0.38 ) 0.18   (0.56 ) (311.1 %)
 
 
Diluted earnings (loss) per share:
Net earnings (loss) (0.38 ) 0.17   (0.55 ) (323.5 %)
Net earnings (loss) attributable to Acxiom stockholders (0.38 ) 0.18   (0.56 ) (311.1 %)
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
       
 
For the Twelve Months Ended
March 31,
$ %
2014 2013 Variance   Variance
 
Revenue:
Marketing and data services 805,153 788,740 16,413 2.1 %
IT Infrastructure management services 257,125 275,469 (18,344 ) (6.7 %)
Other services 35,267   35,150   117 0.3 %
Total revenue 1,097,545 1,099,359 (1,814 ) (0.2 %)
 
Operating costs and expenses:
Cost of revenue 828,955 840,640 11,685 1.4 %
Selling, general and administrative 169,376 153,990 (15,386 ) (10.0 %)
Impairment of goodwill and other 28,834 - (28,834 ) (100.0 %)
Gains, losses and other items, net 22,096   2,010   (20,086 ) (999.3 %)
 
Total operating costs and expenses 1,049,261   996,640   (52,621 ) (5.3 %)
 
Income from operations 48,284   102,719   (54,435 ) (53.0 %)
% Margin 4.4 % 9.3 %
Other income (expense):
Interest expense (11,671 ) (12,694 ) 1,023 8.1 %
Other, net 1,817   152   1,665 1095.4 %
 
Total other income (expense) (9,854 ) (12,542 ) 2,688 21.4 %
 
Earnings before income taxes 38,430 90,177 (51,747 ) (57.4 %)
 
Income taxes 29,627   33,058   3,431 10.4 %
 
Net earnings 8,803 57,119 (48,316 ) (84.6 %)
 
Less: Net loss attributable to noncontrolling interest (60 ) (488 ) 428 87.7 %
 
Net earnings attributable to Acxiom 8,863   57,607   (48,744 ) (84.6 %)
 
Basic earnings per share:
Net earnings 0.12   0.76   (0.64 ) (84.2 %)
Net earnings attributable to Acxiom stockholders 0.12   0.77   (0.65 ) (84.4 %)
 
 
Diluted earnings per share:
Net earnings 0.11   0.75   (0.64 ) (85.3 %)
Net earnings attributable to Acxiom stockholders 0.12   0.75   (0.63 ) (84.0 %)
 
 
 
 
 
 
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,
2014 2013 2014 2013
 
 
Earnings (loss) before income taxes (17,178 ) 17,418 38,430 90,177
 
Income taxes 12,045   4,319   29,627   33,058  
 
Net earnings (loss) (29,223 ) 13,099 8,803 57,119
 
Less: Net loss attributable to noncontrolling interest -   (139 ) (60 ) (488 )
 
Net earnings (loss) attributable to Acxiom (29,223 ) 13,238   8,863   57,607  
 
Earnings (loss) per share attributable to Acxiom stockholders:
 
Basic (0.38 ) 0.18   0.12   0.77  
 
Diluted (0.38 ) 0.18   0.12   0.75  
 
Unusual items:
 
Business separation and transformation expenses 6,924 - 14,007 -
Legal settlement accruals - - 4,200 -
Restructuring charges and other adjustments 11,052 1,944 17,896 2,010
Gain on investment - - (2,567 ) -
Impairment of goodwill and other 28,834   -   28,834   -  
 
Total unusual items, continuing operations 46,810   1,944   62,370   2,010  
 

Earnings before income taxes and excluding unusual items

29,632 19,362 100,800 92,187
 
Income taxes 11,113   5,398   34,688   34,163  
 
Non-GAAP net earnings 18,519 13,964 66,112 58,024
 
Less: Net loss attributable to noncontrolling interest -   (139 ) (60 ) (488 )
 
Non-GAAP Net earnings attributable to Acxiom 18,519   14,103   66,172   58,512  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.24   0.19   0.89   0.78  
 
Diluted 0.24   0.19   0.86   0.76  
 
Diluted weighted average shares 78,450   75,027   76,954   76,497  
 
 
 
 
 
 
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,
2014 2013 2014 2013
 
Income (loss) from operations (15,199 ) 20,189 48,284 102,719
 
Unusual items 46,810   1,944 64,937 2,010
 
Income from operations before unusual items 31,611   22,133 113,221 104,729
 
 
 
 
 
 
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,
2014 2013
 
Basic earnings (loss) per share:
Numerator - net earnings (loss) (29,223 ) 13,099
Denominator - weighted-average shares outstanding 76,293   73,670
Basic earnings (loss) per share (0.38 ) 0.18
 
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom (28,757 ) 13,238
Denominator - weighted-average shares outstanding 76,293   73,670
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders (0.38 ) 0.18
 
Diluted earnings (loss) per share:
Numerator - net earnings (loss) (29,223 ) 13,099
Denominator - weighted-average shares outstanding 76,293 73,670
Dilutive effect of common stock options, warrants and restricted stock -   1,357
76,293   75,027
 
Diluted earnings (loss) per share (0.38 ) 0.17
 
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom (28,757 ) 13,238
Denominator - weighted-average shares outstanding 76,293 73,670
Dilutive effect of common stock options, warrants, and restricted stock -   1,357
76,293   75,027
 
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders (0.38 ) 0.18
 
 
 
 
 
 
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,
2014 2013
 
Basic earnings per share:
Numerator - net earnings 8,803 57,119
Denominator - weighted-average shares outstanding 74,690 74,814
Basic earnings per share 0.12 0.76
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 8,863 57,607
Denominator - weighted-average shares outstanding 74,690 74,814
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.12 0.77
 
Diluted earnings per share:
Numerator - net earnings 8,803 57,119
Denominator - weighted-average shares outstanding 74,690 74,814
Dilutive effect of common stock options, warrants and restricted stock 2,264 1,683
76,954 76,497
 
Diluted earnings per share from continuing operations 0.11 0.75
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 8,863 57,607
Denominator - weighted-average shares outstanding 74,690 74,814
Dilutive effect of common stock options, warrants, and restricted stock 2,264 1,683
76,954 76,497
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.12 0.75
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
   
 
For the Three Months Ended
 
March 31, March 31,
Revenue: 2014 2013
 
Marketing and data services 209,746 202,510
IT Infrastructure management services 58,816 65,202
Other services 8,646   9,419  
 
Total revenue 277,208   277,131  
 
 
Income (loss) from operations:
 
Marketing and data services 27,244 20,866
IT Infrastructure management services 3,803 2,357
Other services 564 (1,090 )
Corporate (46,810 ) (1,944 )
 
Total income (loss) from operations (15,199 ) 20,189  
 
Margin:
 
Marketing and data services 13.0 % 10.3 %
IT Infrastructure management services 6.5 % 3.6 %
Other services 6.5 % -11.6 %
 
Total margin -5.5 % 7.3 %
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
   
 
For the Twelve Months Ended
 
March 31, March 31,
Revenue: 2014 2013
 
Marketing and data services 805,153 788,740
IT Infrastructure management services 257,125 275,469
Other services 35,267   35,150  
 
Total revenue 1,097,545   1,099,359  
 
 
Income from operations:
 
Marketing and data services 78,433 80,017
IT Infrastructure management services 32,847 29,330
Other services 1,941 (4,618 )
Corporate (64,937 ) (2,010 )
 
Total income from operations 48,284   102,719  
 
Margin:
 
Marketing and data services 9.7 % 10.1 %
IT Infrastructure management services 12.8 % 10.6 %
Other services 5.5 % -13.1 %
 
Total margin 4.4 % 9.3 %
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
       
March 31, March 31, $ %
2014 2013 Variance   Variance

Assets

Current assets:
Cash and cash equivalents 418,586 222,974 195,612 87.7 %
Trade accounts receivable, net 167,169 159,882 7,287 4.6 %
Deferred income taxes 12,870 13,496 (626 ) (4.6 %)
Refundable income taxes 11,535 5,809 5,726 98.6 %
Other current assets 55,365   58,935   (3,570 ) (6.1 %)
 
Total current assets 665,525   461,096   204,429 44.3 %
 
Property and equipment 852,236 822,439 29,797 3.6 %
Less - accumulated depreciation and amortization 635,330   591,687   43,643 7.4 %
 
Property and equipment, net 216,906   230,752   (13,846 ) (6.0 %)
 
Software, net of accumulated amortization 39,425 24,471 14,954 61.1 %
Goodwill 358,384 381,129 (22,745 ) (6.0 %)
Purchased software licenses, net of accumulated amortization 18,584 23,604 (5,020 ) (21.3 %)
Deferred costs, net 16,143 42,971 (26,828 ) (62.4 %)
Data acquisition costs 4,502 10,631 (6,129 ) (57.7 %)
Other assets, net 3,832   13,052   (9,220 ) (70.6 %)
 
1,323,301   1,187,706   135,595 11.4 %
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 28,567 16,105 (12,462 ) (77.4 %)
Trade accounts payable 36,183 35,786 (397 ) (1.1 %)
Accrued payroll and related expenses 63,972 62,390 (1,582 ) (2.5 %)
Other accrued expenses 72,762 68,270 (4,492 ) (6.6 %)
Deferred revenue 47,744 41,388 (6,356 ) (15.4 %)
Income taxes 241   637   396 62.2 %
 
Total current liabilities 249,469   224,576   (24,893 ) (11.1 %)
 
Long-term debt 289,043 237,400 (51,643 ) (21.8 %)
 
Deferred income taxes 90,226 94,918 4,692 4.9 %
 
Other liabilities 11,706 11,444 (262 ) (2.3 %)
 
Stockholders' equity:
Common stock 12,584 12,134 450 3.7 %
Additional paid-in capital 981,985 885,184 96,801 10.9 %
Retained earnings 602,829 593,966 8,863 1.5 %
Accumulated other comprehensive income 13,662 11,423 2,239 19.6 %
Treasury stock, at cost (928,203 ) (882,959 ) (45,244 ) (5.1 %)
Total Acxiom stockholders' equity 682,857 619,748 63,109 10.2 %
Noncontrolling interest -   (380 ) 380 100.0 %
 
Total equity 682,857   619,368   63,489 10.3 %
 
1,323,301   1,187,706   135,595 11.4 %
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
   
For the Three Months Ended
March 31,
2014   2013
 
Cash flows from operating activities:
Net earnings (loss) (29,223 ) 13,099
Non-cash operating activities:
Depreciation and amortization 26,879 26,614
Loss (Gain) on disposal or impairment of assets (9 ) -
Impairment of goodwill and other 28,804 -
Deferred income taxes 5,763 2,850
Non-cash stock compensation expense 3,581 3,096
Changes in operating assets and liabilities:
Accounts receivable 6,202 20,603
Other assets (7,920 ) (9,941 )
Deferred costs (417 ) 36
Accounts payable and other liabilities 12,763 23,719
Deferred revenue (2,589 ) (5,855 )
Net cash provided by operating activities 43,834   74,221  
Cash flows from investing activities:
Disposal of operations - -
Capitalized software (5,408 ) (6,689 )
Capital expenditures (14,409 ) (16,515 )
Data acquisition costs (3,085 ) (2,106 )
Payments received from investments 190 -
Net cash paid in acquisitions (500 ) -  
Net cash used by investing activities (23,212 ) (25,310 )
Cash flows from financing activities:
Payments of debt (5,728 ) (7,081 )
Sale of common stock 11,384 4,094
Tax impact of stock options, warrants, and restricted stock 11,295 357
Acquisition of treasury stock -   (9,023 )
Net cash provided (used) by financing activities 16,951   (11,653 )
Effect of exchange rate changes on cash 105   (504 )
 
Net change in cash and cash equivalents 37,678 36,754
Cash and cash equivalents at beginning of period 380,908   186,220  
Cash and cash equivalents at end of period 418,586   222,974  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 2,495 3,031
Income taxes 5,928 9,196
Payments on capital leases and installment payment arrangements 1,465 3,566
Payments on software and data license liabilities - 1,432
Other debt payments, excluding line of credit 4,263 2,083
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
   
For the Twelve Months Ended
March 31,
2014   2013
 
Cash flows from operating activities:
Net earnings 8,803 57,119
Non-cash operating activities:
Depreciation and amortization 103,006 116,208
Loss (gain) on disposal or impairment of assets (2,576 ) 25
Loss on early extinguishment of debt 664 -
Impairment of goodwill and other 28,804 -
Deferred income taxes 2,097 (3,578 )
Non-cash stock compensation expense 13,925 12,002
Changes in operating assets and liabilities:
Accounts receivable 7,733 6,678
Other assets (1,129 ) (9,185 )
Deferred costs (506 ) (1,564 )
Accounts payable and other liabilities 210 (8,888 )
Deferred revenue 3,945   (18,685 )
Net cash provided by operating activities 164,976   150,132  
Cash flows from investing activities:
Capitalized software (24,517 ) (19,879 )
Capital expenditures (39,298 ) (38,491 )
Data acquisition costs (7,745 ) (8,570 )
Payments from investments 3,823 -
Net cash paid in acquisitions (500 ) -  
Net cash used by investing activities (68,237 ) (66,940 )
Cash flows from financing activities:
Proceeds from debt 300,000 -
Payments of debt (235,895 ) (26,871 )
Fees for debt refinancing (4,370 ) -
Sale of common stock 80,490 11,957
Tax impact of stock options, warrants, and restricted stock 11,295 357
Acquisition of treasury stock (52,663 ) (74,378 )
Acquisition of NCI (600 ) -
Contingent consideration paid for prior acquisitions -   (288 )
Net cash provided (used) by financing activities 98,257   (89,223 )
Effect of exchange rate changes on cash 616   (643 )
 
Net change in cash and cash equivalents 195,612 (6,674 )
Cash and cash equivalents at beginning of period 222,974   229,648  
Cash and cash equivalents at end of period 418,586   222,974  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 11,762 12,709
Income taxes 21,702 57,464
Payments on capital leases and installment payment arrangements 8,379 16,514
Payments on software and data license liabilities - 1,769
Other debt payments, excluding line of credit 12,516 8,588
Prepayment of debt 215,000 -
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

- 2,157
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
           
06/30/12     09/30/12     12/31/12     03/31/13     YTD FY2013 06/30/13     09/30/13     12/31/13     03/31/14     YTD FY2014
                               
Net cash provided (used) by operating activities (1,867 ) 39,235 38,543 74,221 150,132 16,849 40,521 63,772 43,834 164,976
 
Less:
Payments for investments - - - - - - - 3,633 190 3,823
Capitalized software (3,673 ) (4,074 ) (5,443 ) (6,689 ) (19,879 ) (5,954 ) (7,660 ) (5,495 ) (5,408 ) (24,517 )
Capital expenditures (3,538 ) (8,178 ) (10,260 ) (16,515 ) (38,491 ) (8,920 ) (9,269 ) (6,700 ) (14,409 ) (39,298 )
Data acquisition costs (2,302 ) (1,396 ) (2,766 ) (2,106 ) (8,570 ) (1,961 ) (913 ) (1,786 ) (3,085 ) (7,745 )
Payments on capital leases and installment payment arrangements (4,562 ) (4,384 ) (4,002 ) (3,566 ) (16,514 ) (2,900 ) (2,339 ) (1,675 ) (1,465 ) (8,379 )
Other required debt payments (2,294 )     (2,298 )     (2,250 )     (3,515 )     (10,357 ) (1,990 )     (2,004 )     (4,259 )     (4,263 )     (12,516 )
 
Total (18,236 )     18,905       13,822       41,830       56,321   (4,876 )     18,336       47,490       15,394       76,344  
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
            Q4 FY14 to Q4 FY13
06/30/12   09/30/12   12/31/12   03/31/13   YTD FY2013 06/30/13   09/30/13   12/31/13   03/31/14   YTD FY2014 %   $
Revenue:                  
Marketing and data services 192,482 198,602 195,146 202,510 788,740 187,793 200,952 206,662 209,746 805,153 3.6 % 7,236
IT Infrastructure management services 70,290 70,061 69,916 65,202 275,469 69,385 66,825 62,099 58,816 257,125 -9.8 % (6,386 )
Other services 8,887     8,804     8,040     9,419     35,150   9,015     8,494     9,112     8,646     35,267   -8.2 %   (773 )
Total revenue 271,659 277,467 273,102 277,131 1,099,359 266,193 276,271 277,873 277,208 1,097,545 0.0 % 77
 
Operating costs and expenses:
Cost of revenue 209,311 209,164 208,848 213,317 840,640 204,506 207,394 210,053 207,002 828,955 -3.0 % (6,315 )
Selling, general and administrative 36,764 38,063 37,482 41,681 153,990 37,615 42,859 43,383 45,519 169,376 9.2 % 3,838

Impairment of goodwill and other

- - - - - - - - 28,834 28,834 -100.0 % 28,834
Gains, losses and other items, net 160     32     (126 )   1,944     2,010   -     6,387     4,657     11,052     22,096   468.5 %   9,108  
 
Total operating costs and expenses 246,235 247,259 246,204 256,942 996,640 242,121 256,640 258,093 292,407 1,049,261 13.8 % 35,465
 
Income (loss) from operations 25,424 30,208 26,898 20,189 102,719 24,072 19,631 19,780 (15,199 ) 48,284 -175.3 % (35,388 )
% Margin 9.4 % 10.9 % 9.8 % 7.3 % 9.3 % 9.0 % 7.1 % 7.1 % -5.5 % 4.4 %
Other expense
Interest expense (3,240 ) (3,317 ) (3,178 ) (2,959 ) (12,694 ) (3,019 ) (2,980 ) (3,114 ) (2,558 ) (11,671 ) -13.6 % 401
Other, net (547 )   (54 )   565     188     152   104     (350 )   1,484     579     1,817   208.0 %   391  
Total other expense (3,787 ) (3,371 ) (2,613 ) (2,771 ) (12,542 ) (2,915 ) (3,330 ) (1,630 ) (1,979 ) (9,854 ) 28.6 % 792
 
Earnings (loss) before income taxes 21,637 26,837 24,285 17,418 90,177 21,157 16,301 18,150 (17,178 ) 38,430 -198.6 % (34,596 )
Income taxes 8,438     10,465     9,836     4,319     33,058   8,062     6,437     3,083     12,045     29,627   178.9 %   7,726  
 
Net earnings (loss) 13,199     16,372     14,449     13,099     57,119   13,095     9,864     15,067     (29,223 )   8,803   -323.1 %   (42,322 )
 

Less: Net gain (loss) attributable to noncontrolling interest

(134 )   (139 )   (76 )   (139 )   (488 ) (85 )   25     -     -     (60 ) 100.0 %   139  
 
Net earnings (loss) attributable to Acxiom 13,333     16,511     14,525     13,238     57,607   13,180     9,839     15,067     (29,223 )   8,863   -320.8 %   (42,461 )
 

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

0.17     0.21     0.19     0.18     0.75   0.17     0.13     0.19     (0.38 )   0.12   -311.1 %   (0.56 )
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
            Q4 FY14 to Q4 FY13
06/30/12   09/30/12   12/31/12   03/31/13   YTD FY2013 06/30/13   09/30/13   12/31/13   03/31/14   YTD FY2014 %   $
                 
Revenue:
 
Marketing and data services 192,482 198,602 195,146 202,510 788,740 187,793 200,952 206,662 209,746 805,153 4 % 7,236
IT Infrastructure management services 70,290 70,061 69,916 65,202 275,469 69,385 66,825 62,099 58,816 257,125 -10 % (6,386 )
Other services 8,887     8,804     8,040     9,419     35,150   9,015     8,494     9,112     8,646     35,267   -8 %   (773 )
 
Total revenue 271,659     277,467     273,102     277,131     1,099,359   266,193     276,271     277,873     277,208     1,097,545   0 %   77  
 
 
Marketing and data services 18,703 22,262 18,186 20,866 80,017 12,657 16,014 22,518 27,244 78,433 31 % 6,378
IT Infrastructure management services 8,831 8,520 9,622 2,357 29,330 10,761 11,967 6,316 3,803 32,847 61 % 1,446
Other services (1,950 ) (542 ) (1,036 ) (1,090 ) (4,618 ) 654 223 500 564 1,941 152 % 1,654
Corporate (160 )   (32 )   126     (1,944 )   (2,010 ) -     (8,573 )   (9,554 )   (46,810 )   (64,937 ) -2308 %   (44,866 )
 
Total income (loss) from operations 25,424     30,208     26,898     20,189     102,719   24,072     19,631     19,780     (15,199 )   48,284   -175 %   (35,388 )
 
Margin:
 
Marketing and data services 9.7 % 11.2 % 9.3 % 10.3 % 10.1 % 6.7 % 8.0 % 10.9 % 13.0 % 9.7 %
IT Infrastructure management services 12.6 % 12.2 % 13.8 % 3.6 % 10.6 % 15.5 % 17.9 % 10.2 % 6.5 % 12.8 %
Other services -21.9 % -6.2 % -12.9 % -11.6 % -13.1 % 7.3 % 2.6 % 5.5 % 6.5 % 5.5 %
 
Total 9.4 % 10.9 % 9.8 % 7.3 % 9.3 % 9.0 % 7.1 % 7.1 % -5.5 % 4.4 %
 
 
 
 
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURE OF EARNINGS PER SHARE EXCLUDING STOCK COMPENSATION
(Unaudited)
(Dollars in thousands)
                                       
06/30/12   09/30/12   12/31/12   03/31/13   FY2013 06/30/13   09/30/13   12/31/13   03/31/14   FY2014
               
Earnings (loss) before income taxes 21,637 26,837 24,285 17,418 90,177 21,157 16,301 18,150 (17,178 ) 38,430
 
Income taxes 8,438     10,465     9,836     4,319     33,058   8,062     6,437   3,083     12,045     29,627  
 
Net earnings (loss) 13,199 16,372 14,449 13,099 57,119 13,095 9,864 15,067 (29,223 ) 8,803
 
Less: Net loss attributable to noncontrolling interest (134 )   (139 )   (76 )   (139 )   (488 ) (85 )   25   -     -     (60 )
 
Net earnings (loss) attributable to Acxiom 13,333     16,511     14,525     13,238     57,607   13,180     9,839   15,067     (29,223 )   8,863  
 
Earnings (loss) per share attributable to Acxiom stockholders:
 
Basic 0.17     0.21     0.19     0.18     0.77   0.18     0.13   0.20     (0.38 )   0.12  
 
Diluted 0.17     0.21     0.19     0.18     0.75   0.17     0.13   0.19     (0.38 )   0.12  
 
 
Excluded items:
 
Business separation and transformation expenses - - - - - - 2,186 4,897 6,924 14,007
Legal settlement accruals 160 32 (126 ) 1,944 2,010 - 3,200 1,000 - 4,200
Restructuring charges and other adjustments - - - - - - 3,187 3,657 11,052 17,896
Gain on investment - - - - - - - (2,567 ) - (2,567 )
Impairment of goodwill and other - - - - - - - - 28,834 28,834
Non-cash stock compensation expense 2,653     3,150     3,103     3,096     12,002   3,180     3,709   3,455     3,581     13,925  
 
Total excluded items 2,813 3,182 2,977 5,040 14,012 3,180 12,282 10,442 50,391 76,295
 
Non-GAAP earnings before income taxes 24,450 30,019 27,262 22,458 104,189 24,337 28,583 28,592 33,213 114,725
 
Income taxes 9,535     11,706     11,012     6,583     38,836   9,274     11,288   6,979     12,474     40,015  
 
Non-GAAP net earnings 14,915 18,313 16,250 15,875 65,353 15,063 17,295 21,613 20,739 74,710
 
Less: Net loss attributable to noncontrolling interest (134 )   (139 )   (76 )   (139 )   (488 ) (85 )   25   -     -     (60 )
 
Non-GAAP Net earnings attributable to Acxiom 15,049     18,452     16,326     16,014     65,841   15,148     17,270   21,613     20,739     74,770  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.20     0.25     0.22     0.22     0.88   0.21     0.23   0.29     0.27     1.00  
 
Diluted 0.19     0.24     0.22     0.21     0.86   0.20     0.23   0.28     0.26     0.97  
 
Diluted weighted average shares 78,057     77,025     75,878     75,027     76,497   75,491     76,036   77,839     78,450     76,954  
 
 
 

Contacts

Acxiom Corporation
Investor Relations:
Lauren Russi, 650-372-2242
investor.relations@acxiom.com
EACXM

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Contacts

Acxiom Corporation
Investor Relations:
Lauren Russi, 650-372-2242
investor.relations@acxiom.com
EACXM