Acxiom Announces First Quarter Results

Connectivity Nears Breakeven

Sale of IT Infrastructure Management Business Completed

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Q1 FY16 Text and Financials

LITTLE ROCK, Ark.--()--Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its first quarter ended June 30, 2015.

Financial Highlights

  • Revenue: Total revenue was $197 million, up approximately 5% compared to the first quarter of last year.
  • Operating Income (Loss): GAAP operating loss from continuing operations was $3 million compared to a loss of $13 million in the prior year. Non-GAAP operating income from continuing operations improved 71% to approximately $15 million compared to $9 million a year ago.
  • Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.07 compared to a net loss of $0.14 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.09, up 80% from $0.05 a year ago.
  • Operating Cash Flow: Operating cash flow from continuing operations improved to $12 million compared to negative $15 million a year ago.
  • Free Cash Flow to Equity: Free cash flow to equity was negative $12 million compared to negative $43 million in the prior year.

Segment Results

During the first quarter of fiscal 2016, Acxiom realigned its organizational structure to better reflect its business strategy. The Company will report its financial performance based on the following segments: Marketing Services and Audience Solutions and Connectivity. Prior period amounts have been adjusted to conform to the way the Company internally managed and monitored segment performance during the first quarter of fiscal year 2016.

Marketing Services and Audience Solutions

  • Revenue was $176 million, down 3% compared to the first quarter of last year primarily due to declines in International. US revenue of $159 million was roughly flat year-over-year.
  • Non-GAAP gross margin decreased from 43% to 41%.
  • Non-GAAP operating income was $40 million compared to $47 million in the prior year. The decline was primarily driven by lower revenue.

Connectivity

  • Revenue was $21 million, up approximately 376% compared to the first quarter of last year, driven by the addition of LiveRamp and continued onboarding momentum.
  • Non-GAAP gross margin improved from negative 83% to positive 60%.
  • Non-GAAP operating loss improved by approximately $14 million to roughly breakeven driven by growth in subscriptions and royalties.

Non-GAAP results exclude items including non-cash compensation, purchased intangible asset amortization, and separation and transformation costs. A reconciliation between GAAP and non-GAAP results is attached to this release.

“The first quarter was a solid start to fiscal 2016,” said Acxiom CEO Scott Howe. “Our results this quarter demonstrate the continued strength of Connectivity. A growing list of customers and synergies from our combination with LiveRamp contributed to dramatically expanding revenue, gross margin and bottom-line performance.”

“We are also pleased to announce that the sale of our IT Infrastructure Management business was completed on July 31, 2015, leaving Acxiom with a portfolio of businesses that share a single vision and mission,” continued Howe.

Business Highlights

  • LiveRamp added 30 new customers during the quarter and added 10 new partner integrations. Marketers can now onboard and distribute their data to a growing network of over 200 marketing platforms and data providers.
  • Acxiom relaunched its email and cross-channel marketing business, Acxiom Impact™, an advanced marketing offering specifically designed to meet the unique needs of sophisticated enterprise marketers.
  • The Company appointed Jeremy Allen as President of Marketing Services. Allen’s appointment completes Acxiom's new divisional structure, which includes Travis May as President of Connectivity and Rick Erwin as President of Audience Solutions. Acxiom's CFO, Warren Jenson, is heading the Company's international operations.
  • Acxiom repurchased approximately 832,000 shares for $15 million during the quarter. Since inception of the share repurchase program in August 2011, the Company has repurchased 13.7 million shares for $217 million.
  • On July 31, 2015, Acxiom completed the sale of its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners.

Financial Outlook

The Company’s guidance excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom reconfirms the following estimates for fiscal 2016:

  • 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 investors.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. 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 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, 2015, which was filed with the Securities and Exchange Commission on May 27, 2015.

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 loss per share)
               
For the Three Months Ended
June 30,
$ %
2015 2014 Variance     Variance
 
Revenues 196,895 186,683 10,212 5.5 %
 
Cost of revenue 117,709   113,090   4,619 4.1 %
Gross profit 79,186 73,593 5,593 7.6 %
% Gross margin 40.2 % 39.4 %
 
Operating expenses:
Research and development 20,011 16,350 3,661 22.4 %
Sales and marketing 29,494 26,500 2,994 11.3 %
General and administrative 31,743 36,701 (4,958 ) (13.5 %)
Gains, losses and other items, net 807   7,128   (6,321 ) (88.7 %)
Total operating expenses 82,055   86,679   (4,624 ) (5.3 %)
 
Loss from operations (2,869 ) (13,086 ) 10,217 78.1 %
% Margin -1.5 % -7.0 %
Other income (expense):
Interest expense (1,885 ) (1,948 ) 63 3.2 %
Other, net 304   (106 ) 410 386.8 %
Total other expense (1,581 ) (2,054 ) 473 23.0 %
 
Loss from continuing operations before income taxes (4,450 ) (15,140 ) 10,690 70.6 %
 
Income taxes 732   (4,399 ) 5,131 116.6 %
 
Net loss from continuing operations (5,182 ) (10,741 ) 5,559 51.8 %
 
Earnings from discontinued operations, net of tax 4,143   3,137   1,006 32.1 %
 
Net loss (1,039 ) (7,604 ) 6,565 86.3 %
 
Basic earnings (loss) per share:
Net loss from continuing operations (0.07 ) (0.14 ) 0.07 52.4 %
Net earnings from discontinued operations 0.05   0.04   0.01 30.2 %
Net loss (0.01 ) (0.10 ) 0.09 86.5 %
 
 
Diluted earnings (loss) per share:
Net loss from continuing operations (0.07 ) (0.14 ) 0.07 52.4 %
Net earnings from discontinued operations 0.05   0.04   0.01 32.8 %
Net loss (0.01 ) (0.10 ) 0.09 86.8 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
       
For the Three Months Ended
June 30,
2015 2014
 
 
Loss from continuing operations before income taxes (4,450 ) (15,140 )
 
Income taxes 732   (4,399 )
 
Net loss from continuing operations (5,182 ) (10,741 )
 
Earnings from discontinued operations, net of tax 4,143   3,137  
 
Net loss (1,039 ) (7,604 )
 
Loss per share:
 
Basic (0.01 ) (0.10 )
 
Diluted (0.01 ) (0.10 )
 
Excluded items:
Purchased intangible asset amortization (cost of revenue) 3,754 63
Non-cash stock compensation (cost of revenue and operating expenses) 8,123 3,925
Restructuring charges and other adjustments (gains, losses, and other) 807 7,128
Separation and transformation costs (general and administrative) 3,414 10,538
Accelerated amortization (cost of revenue) 1,442   -  
 
Total excluded items, continuing operations 17,540   21,654  
 

Earnings from continuing operations before income taxes and excluding items

13,090 6,514
 
Income taxes 5,632   2,517  
 
Non-GAAP net earnings 7,458   3,997  
 
Non-GAAP earnings per share:
 
Basic 0.10   0.05  
 
Diluted 0.09   0.05  
 
Basic weighted average shares 77,918   76,833  
 
Diluted weighted average shares 79,352   78,341  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
       
For the Three Months Ended
June 30, June 30,
2015 2014
 
Basic loss per share from continuing operations:
Numerator - net loss (5,182 ) (10,741 )
 
Denominator - weighted-average shares outstanding 77,918   76,833  
Basic loss per share (0.07 ) (0.14 )
 
Diluted loss per share from continuing operations:
Numerator - net loss (5,182 ) (10,741 )
 
Denominator - weighted-average shares outstanding 77,918   76,833  
Diluted loss per share (0.07 ) (0.14 )
 
Basic earnings per share from discontinued operations:
Numerator - net earnings 4,143 3,137
 
Denominator - weighted-average shares outstanding 77,918   76,833  
Basic earnings per share 0.05   0.04  
 
Diluted earnings per share from discontinued operations:
Numerator - net earnings 4,143 3,137
 
Denominator - weighted-average shares outstanding 77,918 76,833
Dilutive effect of common stock options, warrants and restricted stock -   -  
77,918   76,833  
 
Diluted earnings per share 0.05   0.04  
 
Diluted loss per share:
Numerator - net loss (1,039 ) (7,604 )
 
Denominator - weighted-average shares outstanding 77,918 76,833
Dilutive effect of common stock options, warrants, and restricted stock -   -  
77,918   76,833  
 
Diluted loss per share (0.01 ) (0.10 )
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
                               
For the Three Months Ended
June 30, 2015 June 30, 2014
Marketing Services Marketing Services
& Audience Solutions Connectivity Corporate Total & Audience Solutions Connectivity Corporate Total
 
Revenues 176,276 20,619 - 196,895 182,349 4,334 - 186,683
 
Gross profit (loss) 72,019 8,609 (1,442 ) 79,186 77,224 (3,631 ) - 73,593
% Gross margin 40.9 % 41.8 % n/a 40.2 % 42.3 % -83.8 % n/a 39.4 %
 
Operating income (loss) 38,287 (8,025 ) (33,131 ) (2,869 ) 46,221 (14,261 ) (45,046 ) (13,086 )
% margin 21.7 % -38.9 % n/a -1.5 % 25.3 % -329.0 % n/a -7.0 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-NON-GAAP
(Unaudited)
(Dollars in thousands)
                               
For the Three Months Ended
June 30, 2015 June 30, 2014
Marketing Services Marketing Services
& Audience Solutions Connectivity Corporate Total & Audience Solutions Connectivity Corporate Total
 
Revenues 176,276 20,619 - 196,895 182,349 4,334 - 186,683
 
Gross profit (loss) 72,473 12,338 - 84,811 77,559 (3,599 ) - 73,960
% Gross margin 41.1 % 59.8 % n/a 43.1 % 42.5 % -83.0 % n/a 39.6 %
 
Operating income (loss) 40,253 (173 ) (25,409 ) 14,671 47,270 (13,852 ) (24,850 ) 8,568
% margin 22.8 % -0.8 % n/a 7.5 % 25.9 % -319.6 % n/a 4.6 %
 
       
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
                       
For the Three Months Ended
June 30, 2015 June 30, 2014
Marketing Services Marketing Services
& Audience Solutions Connectivity Corporate Total & Audience Solutions Connectivity Corporate Total
 
Gross profit (loss) 72,019 8,609 (1,442 ) 79,186 77,224 (3,631 ) - 73,593
 
Purchased intangible asset amortization 25 3,729 - 3,754 31 32 - 63
Non-cash stock compensation 429 - - 429 304 - - 304
Accelerated amortization -     -       1,442       1,442   -     -       -       -  
 
Gross profit (loss) before excluded items 72,473     12,338       -       84,811   77,559     (3,599 )     -       73,960  
 
 
Operating income (loss) 38,287 (8,025 ) (33,131 ) (2,869 ) 46,221 (14,261 ) (45,046 ) (13,086 )
 
Purchased intangible asset amortization 25 3,729 - 3,754 31 32 - 63
Non-cash stock compensation 1,914 4,123 2,086 8,123 1,007 377 2,541 3,925
Restructuring charges and other adjustments 27 - 780 807 11 - 7,117 7,128
Separation and transformation costs - - 3,414 3,414 - - 10,538 10,538
Accelerated amortization -     -       1,442       1,442   -     -       -       -  
 
Operating income (loss) before excluded items 40,253     (173 )     (25,409 )     14,671   47,270     (13,852 )     (24,850 )     8,568  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
               
June 30, March 31, $ %
2015 2015 Variance     Variance

Assets

Current assets:
Cash and cash equivalents 123,192 141,010 (17,818 ) (12.6 %)
Trade accounts receivable, net 135,626 126,896 8,730 6.9 %
Deferred income taxes 23,111 25,610 (2,499 ) (9.8 %)
Refundable income taxes 21 5,239 (5,218 ) (99.6 %)
Restricted cash held in escrow 31,000 31,000 0 0.0 %
Other current assets 37,187 34,975 2,212 6.3 %
Assets of discontinued operations 163,768   172,284   (8,516 ) (4.9 %)
 
Total current assets 513,905   537,014   (23,109 ) (4.3 %)
 
Property and equipment 505,736 505,721 15 0.0 %
Less - accumulated depreciation and amortization 325,995   329,467   (3,472 ) (1.1 %)
 
Property and equipment, net 179,741   176,254   3,487 2.0 %
 
Software, net of accumulated amortization 63,242 68,962 (5,720 ) (8.3 %)
Goodwill 497,456 497,362 94 0.0 %
Purchased software licenses, net of accumulated amortization 9,492 9,551 (59 ) (0.6 %)
Other assets, net 31,195   33,281   (2,086 ) (6.3 %)
 
1,295,031   1,322,424   (27,393 ) (2.1 %)
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 87,186 32,232 54,954 170.5 %
Trade accounts payable 39,606 30,094 9,512 31.6 %
Accrued payroll and related expenses 26,013 36,659 (10,646 ) (29.0 %)
Other accrued expenses 55,025 62,754 (7,729 ) (12.3 %)
Acquisition escrow payable 31,000 31,000 0 0.0 %
Deferred revenue 33,554 33,620 (66 ) (0.2 %)
Income taxes - - 0 -
Liabilities of discontinued operations 50,764   57,433   (6,669 ) (11.6 %)
 
Total current liabilities 323,148   283,792   39,356 13.9 %
 
Long-term debt 184,802 247,855 (63,053 ) (25.4 %)
 
Deferred income taxes 76,654 80,675 (4,021 ) (5.0 %)
 
Other liabilities 12,125 6,845 5,280 77.1 %
 
Stockholders' equity:
Common stock 12,847 12,794 53 0.4 %
Additional paid-in capital 1,045,897 1,034,526 11,371 1.1 %
Retained earnings 590,759 591,798 (1,039 ) (0.2 %)
Accumulated other comprehensive income 10,142 9,413 729 7.7 %
Treasury stock, at cost (961,343 ) (945,274 ) (16,069 ) (1.7 %)
Total stockholders' equity 698,302   703,257   (4,955 ) (0.7 %)
 
1,295,031   1,322,424   (27,393 ) (2.1 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
       
For the Three Months Ended
June 30,
       
2015     2014
 
Cash flows from operating activities:
Net loss (1,039 ) (7,604 )
Earnings from discontinued operations, net of tax (4,143 ) (3,137 )
Non-cash operating activities:
Depreciation and amortization 21,775 15,920
Loss (gain) on disposal or impairment of assets 241 (254 )
Deferred income taxes (1,522 ) (1,843 )
Non-cash stock compensation expense 8,123 3,925
Changes in operating assets and liabilities:
Accounts receivable (8,037 ) 11,399
Other assets 809 3,590
Deferred costs (425 ) (211 )
Accounts payable and other liabilities (3,530 ) (29,057 )
Deferred revenue (255 ) (8,184 )
Net cash provided by (used in) operating activities 11,997   (15,456 )
Cash flows from investing activities:
Capitalized software (2,797 ) (4,969 )
Capital expenditures (12,876 ) (16,778 )
Data acquisition costs (430 ) (635 )
Net cash used in investing activities (16,103 ) (22,382 )
Cash flows from financing activities:
Payments of debt (8,099 ) (4,917 )
Sale of common stock, net of stock acquired for withholding taxes 2,069 (674 )
Income tax impact of stock options, warrants and restricted stock (77 ) -
Acquisition of treasury stock (14,951 ) -  
Net cash used in financing activities (21,058 ) (5,591 )
Cash flows from discontinued operations:
From operating activities 11,653 17,310
From investing activities (4,484 ) 704
From financing activities (153 ) (585 )
Net cash provided by discontinued operations 7,016   17,429  
Effect of exchange rate changes on cash 330   332  
 
Net change in cash and cash equivalents (17,818 ) (25,668 )
Cash and cash equivalents at beginning of period 141,010   418,586  
Cash and cash equivalents at end of period 123,192   392,918  
 
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 2,185 2,875
Income taxes (1,044 ) 297
Payments on capital leases and installment payment arrangements 216 1,235
Other debt payments, excluding line of credit 8,036 4,267
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
                       
                           
06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15
 
Net cash provided by operating activities - continuing operations (15,456 ) 14,325 32,890 29,372 61,131 11,997
 
Less:
Payments for investments - - - - - -
Capitalized software (4,969 ) (5,608 ) (4,408 ) (3,602 ) (18,587 ) (2,797 )
Capital expenditures (16,778 ) (15,362 ) (10,212 ) (14,600 ) (56,952 ) (12,876 )
Data acquisition costs (635 ) (468 ) (394 ) (374 ) (1,871 ) (430 )
Payments on capital leases and installment payment arrangements (650 ) (567 ) (471 ) (315 ) (2,003 ) (63 )
Other required debt payments (4,267 )     (4,272 )     (8,027 )     (8,032 )     (24,598 ) (8,036 )
 
Total (42,755 )     (11,952 )     9,378       2,449       (42,880 ) (12,205 )
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
                                   
                              Q1 FY16 to Q1 FY15
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15 %     $
Revenues 805,153 186,683 204,248 208,246 205,734 804,911 196,895 5.5 % 10,212
 
Cost of revenue 472,492   113,090       122,088       122,567       123,055       480,800   117,709   4.1 % 4,619
Gross profit 332,661 73,593 82,160 85,679 82,679 324,111 79,186 7.6 % 5,593
% Gross margin 41.3 % 39.4 % 40.2 % 41.1 % 40.2 % 40.3 % 40.2 %
 
Operating expenses
Research and development 65,269 16,350 20,555 19,696 19,737 76,338 20,011 22.4 % 3,661
Sales and marketing 115,077 26,500 28,842 30,997 32,319 118,658 29,494 11.3 % 2,994
General and administrative 108,637 36,701 38,373 33,895 30,230 139,199 31,743 -13.5 % (4,958 )
Gains, losses and other items, net 42,121   7,128       833       3,381       11,258       22,600   807   -88.7 % (6,321 )
Total operating expenses 331,104 86,679 88,603 87,969 93,544 356,795 82,055 -5.3 % (4,624 )
 
Income (loss) from operations 1,557 (13,086 ) (6,443 ) (2,290 ) (10,865 ) (32,684 ) (2,869 ) 78.1 % 10,217
% Margin 0.2 % -7.0 % -3.2 % -1.1 % -5.3 % -4.1 % -1.5 %
Other income (expense)
Interest expense (8,671 ) (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 ) (1,885 ) 3.2 % 63
Other, net 1,814   (106 )     (163 )     35       (757 )     (991 ) 304   386.8 % 410
Total other expense (6,857 ) (2,054 ) (1,984 ) (1,970 ) (2,655 ) (8,663 ) (1,581 ) 23.0 % 473
 
Loss from continuing operations before income taxes (5,300 ) (15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 ) 70.6 % 10,690
Income taxes 12,040   (4,399 )     (1,326 )     (4,597 )     (4,483 )     (14,805 ) 732   116.6 % 5,131
 
Net earnings (loss) from continuing operations (17,340 ) (10,741 ) (7,101 ) 337 (9,037 ) (26,542 ) (5,182 ) 51.8 % 5,559
 
Earnings from discontinued operations, net of tax 26,143   3,137       5,557       3,819       2,998       15,511   4,143   32.1 % 1,006
 
Net earnings (loss) 8,803 (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) (1,039 ) 86.3 % 6,565
 
NCI (60 ) 0 0 0 0 0 0 - 0
 
Net earnings (loss) attributable to Acxiom 8,863   (7,604 )     (1,544 )     4,156       (6,039 )     (11,031 ) (1,039 ) 86.3 % 6,565
 
Diluted earnings (loss) per share 0.12   (0.10 )     (0.02 )     0.05       (0.08 )     (0.14 ) (0.01 ) 86.5 % 0.09
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
                                   
                              Q1 FY16 to Q1 FY15
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15 %     $
Revenues 805,153 186,683 204,248 208,246 205,734 804,911 196,895 5.5 % 10,212
 
Cost of revenue 471,015   112,723       118,012       118,412       114,586       463,733   112,084   -0.6 % (639 )
Gross profit 334,138 73,960 86,236 89,834 91,148 341,178 84,811 14.7 % 10,851
% Gross margin 41.5 % 39.6 % 42.2 % 43.1 % 44.3 % 42.4 % 43.1 %
 
Operating expenses
Research and development 63,701 15,911 17,286 16,283 16,613 66,093 16,384 3.0 % 473
Sales and marketing 112,080 25,854 27,040 28,941 30,150 111,985 28,170 9.0 % 2,316
General and administrative 94,807 23,627 27,702 23,869 22,656 97,854 25,586 8.3 % 1,959
Gains, losses and other items, net -   -       -       -       -       -   -   - -
Total operating expenses 270,588 65,392 72,028 69,093 69,419 275,932 70,140 7.3 % 4,748
 
Income from operations 63,550 8,568 14,208 20,741 21,729 65,246 14,671 71.2 % 6,103
% Margin 7.9 % 4.6 % 7.0 % 10.0 % 10.6 % 8.1 % 7.5 %
Other income (expense)
Interest expense (8,671 ) (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 ) (1,885 ) 3.2 % 63
Other, net (758 ) (106 )     (163 )     35       (757 )     (991 ) 304   386.8 % 410
Total other expense (9,429 ) (2,054 ) (1,984 ) (1,970 ) (2,655 ) (8,663 ) (1,581 ) 23.0 % 473
 
Earnings from continuing operations before income taxes 54,121 6,514 12,224 18,771 19,074 56,583 13,090 101.0 % 6,576
Income taxes 17,200   2,517       4,757       5,755       5,324       18,353   5,632   123.8 % 3,115
 
Net earnings from continuing operations 36,921 3,997 7,467 13,016 13,750 38,230 7,458 86.6 % 3,461
 
Earnings from discontinued operations, net of tax -   -       -       -       -       -   -   - -
 
Net earnings 36,921 3,997 7,467 13,016 13,750 38,230 7,458 86.6 % 3,461
 
NCI (60 ) - - - - - - - -
 
Net earnings attributable to Acxiom 36,981   3,997       7,467       13,016       13,750       38,230   7,458   86.6 % 3,461
 
Diluted earnings per share 0.48   0.05       0.10       0.17       0.17       0.49   0.09   84.2 % 0.04
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
                           
                             
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15
 
 
Loss from continuing operations before income taxes (5,300 ) (15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 )
 
Income taxes 12,040   (4,399 )     (1,446 )     (4,717 )     (4,603 )     (15,165 ) 732  
 
Net earnings (loss) from continuing operations (17,340 ) (10,741 ) (6,981 ) 457 (8,917 ) (26,182 ) (5,182 )
 
Earnings (loss) from discontinued operations, net of tax 26,143   3,137       5,557       3,819       2,998       15,511   4,143  
 
Net earnings (loss) 8,803   (7,604 )     (1,424 )     4,276       (5,919 )     (10,671 ) (1,039 )
 
Earnings (loss) per share:
 
Basic 0.12   (0.10 )     (0.02 )     0.06       (0.08 )     (0.14 ) (0.01 )
 
Diluted 0.11   (0.10 )     (0.02 )     0.05       (0.08 )     (0.14 ) (0.01 )
 
Excluded items:
Purchased intangible asset amortization (cost of revenue) 252 63 3,802 3,783 3,781 11,429 3,754
Non-cash stock compensation (cost of revenue and operating expenses) 13,206 3,925 7,725 8,450 8,216 28,316 8,123
Restructuring charges and other adjustments (gains, losses, and other) 42,121 7,128 833 3,381 11,137 22,479 807
Separation and transformation costs (general and administrative) 6,409 10,538 8,291 7,417 5,144 31,390 3,414
Accelerated amortization (cost of revenue) - - - - 4,316 4,316 1,442
Other income (2,567 ) -       -       -       -       -   -  
 
Total excluded items, continuing operations 59,421   21,654       20,651       23,031       32,594       97,930   17,540  
 

Earnings from continuing operations before income taxes and excluding items

54,121 6,514 12,224 18,771 19,074 56,583 13,090
 
Income taxes 17,200   2,517       4,757       5,755       5,324       18,353   5,632  
 
Non-GAAP earnings from continuing operations 36,921 3,997 7,467 13,016 13,750 38,230 7,458
 
Less: noncontrolling interest (60 ) -       -       -       -       -   -  
 
Non-GAAP net earnings 36,981   3,997       7,467       13,016       13,750       38,230   7,458  
 
Non-GAAP earnings per share:
 
Basic 0.50   0.05       0.10       0.17       0.18       0.50   0.10  
 
Diluted 0.48   0.05       0.10       0.17       0.17       0.49   0.09  
 
Basic weighted average shares 74,690   76,833       77,123       77,039       77,427       77,106   77,918  
 
Diluted weighted average shares 76,954   78,341       78,307       78,302       79,027       78,494   79,352  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
                                              Q1 FY16 to Q1 FY15
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15 %     $
                   
Revenues:
 
Marketing services and audience solutions 790,394 182,349 190,776 190,336 186,478 749,939 176,276 -3.3 % (6,073 )
Connectivity 14,759   4,334       13,472       17,910       19,256       54,972   20,619   375.7 % 16,285  
 
Total revenues 805,153   186,683       204,248       208,246       205,734       804,911   196,895   5.5 % 10,212  
 
Gross profit from continuing operations:
 
Marketing services and audience solutions 344,034 77,224 83,409 83,715 82,594 326,942 72,019 -6.7 % (5,205 )
Connectivity (11,373 ) (3,631 ) (1,249 ) 1,964 4,400 1,484 8,609 337.1 % 12,240
Corporate -   -       -       -       (4,315 )     (4,315 ) (1,442 ) n/a (1,442 )
 
Total gross profit from continuing operations 332,661   73,593       82,160       85,679       82,679       324,111   79,186   7.6 % 5,593  
 
Gross margin:
 
Marketing services and audience solutions 43.5 % 42.3 % 43.7 % 44.0 % 44.3 % 43.6 % 40.9 %
Connectivity -77.1 % -83.8 % -9.3 % 11.0 % 22.9 % 2.7 % 41.8 %
 
Total 41.3 % 39.4 % 40.2 % 41.1 % 40.2 % 40.3 % 40.2 %
 
Income (loss) from continuing operations:
 
Marketing services and audience solutions 208,403 46,221 52,302 51,268 48,065 197,856 38,287 -17.2 % (7,934 )
Connectivity (48,839 ) (14,261 ) (20,277 ) (16,876 ) (17,444 ) (68,858 ) (8,025 ) 43.7 % 6,236
Corporate

(158,007

)

(45,046 )     (38,468 )     (36,682 )     (41,486 )     (161,682 ) (33,131 ) 26.5 % 11,915  
 
Total income (loss) from continuing operations 1,557   (13,086 )     (6,443 )     (2,290 )     (10,865 )     (32,684 ) (2,869 ) 78.1 % 10,217  
 
Margin:
 
Marketing services and audience solutions 26.4 % 25.3 % 27.4 % 26.9 % 25.8 % 26.4 % 21.7 %
Connectivity -330.9 % -329.0 % -150.5 % -94.2 % -90.6 % -125.3 % -38.9 %
 
Total 0.2 % -7.0 % -3.2 % -1.1 % -5.3 % -4.1 % -1.5 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT - NON GAAP
(Unaudited)
(Dollars in thousands)
                                              Q1 FY16 to Q1 FY15
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15 %     $
                   
Revenues:
 
Marketing services and audience solutions 790,394 182,349 190,776 190,336 186,478 749,939 176,276 -3.3 % (6,073 )
Connectivity 14,759   4,334       13,472       17,910       19,256       54,972   20,619   375.7 % 16,285  
 
Total revenues 805,153   186,683       204,248       208,246       205,734       804,911   196,895   5.5 % 10,212  
 
Gross profit from continuing operations:
 
Marketing services and audience solutions 345,356 77,559 85,029 82,863 83,012 328,463 72,473 -6.6 % (5,086 )
Connectivity (11,218 ) (3,599 ) 1,207 6,971 8,136 12,715 12,338 442.8 % 15,937
Corporate -   -       -       -       -       -   -   n/a -  
 
Total income from continuing operations 334,138   73,960       86,236       89,834       91,148       341,178   84,811   14.7 % 10,851  
 
Gross margin:
 
Marketing services and audience solutions 43.7 % 42.5 % 44.6 % 43.5 % 44.5 % 43.8 % 41.1 %
Connectivity -76.0 % -83.0 % 9.0 % 38.9 % 42.3 % 23.1 % 59.8 %
 
Total 41.5 % 39.6 % 42.2 % 43.1 % 44.3 % 42.4 % 43.1 %
 
Income from continuing operations:
 
Marketing services and audience solutions 214,242 47,269 54,902 51,280 50,803 204,254 40,253 -14.8 % (7,016 )
Connectivity (47,555 ) (13,852 ) (13,053 ) (6,205 ) (5,809 ) (38,919 ) (173 ) 98.8 % 13,679
Corporate (103,137 ) (24,849 )     (27,641 )     (24,334 )     (23,265 )     (100,089 ) (25,409 ) -2.3 % (560 )
 
Total income from continuing operations 63,550   8,568       14,208       20,741       21,729       65,246   14,671   71.2 % 6,103  
 
Margin:
 
Marketing services and audience solutions 27.1 % 25.9 % 28.8 % 26.9 % 27.2 % 27.2 % 22.8 %
Connectivity -322.2 % -319.6 % -96.9 % -34.6 % -30.2 % -70.8 % -0.8 %
 
Total 7.9 % 4.6 % 7.0 % 10.0 % 10.6 % 8.1 % 7.5 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
                       
March 31, June 30, Sept 30, Dec 31, March 31, June 30,
2014 2014     2014     2014     2015 2015

Assets

Current assets:
Cash and cash equivalents 418,586 392,918 109,810 126,891 141,010 123,192
Trade accounts receivable, net 129,216 120,186 123,055 122,320 126,896 135,626
Deferred income taxes 9,469 16,774 14,689 12,408 25,610 23,111
Refundable income taxes 11,535 11,436 5,128 11,823 5,239 21
Restricted cash held in escrow - 31,000 31,000 31,000 31,000
Other current assets 39,245 36,904 41,428 38,443 34,975 37,187
Assets of discontinued operations 205,387   180,205       186,453       175,843       172,284   163,768  
 
Total current assets 813,438   758,423       511,563       518,728       537,014   513,905  
 
Property and equipment 531,298 536,315 545,455 510,943 505,721 505,736
Less - accumulated depreciation and amortization 375,047   372,457       373,341       340,530       329,467   325,995  
 
Property and equipment, net 156,251   163,858       172,114       170,413       176,254   179,741  
 
Software, net of accumulated amortization 39,425 40,766 79,768 77,033 68,962 63,242
Goodwill 286,876 287,163 501,960 501,081 497,362 497,456
Purchased software licenses, net of accumulated amortization 14,306 13,883 11,723 10,516 9,551 9,492
Other assets, net 13,005   13,380       38,100       36,182       33,281   31,195  
 
1,323,301   1,277,473       1,315,228       1,313,953       1,322,424   1,295,031  
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 26,599 29,781 32,982 32,632 32,232 87,186
Trade accounts payable 30,054 34,793 38,991 28,399 30,094 39,606
Accrued payroll and related expenses 57,917 29,306 29,553 33,524 36,659 26,013
Other accrued expenses 64,024 61,805 59,987 62,447 62,754 55,025
Acquisition escrow payable - - 31,000 31,000 31,000 31,000
Deferred revenue 39,611 33,914 29,702 32,882 33,620 33,554
Income taxes 241 - - - - -
Liabilities of discontinued operations 74,488   69,261       69,936       62,268       57,433   50,764  
 
Total current liabilities 292,934   258,860       292,151       283,152       283,792   323,148  
 
Long-term debt 280,087 271,988 263,950 255,802 247,855 184,802
 
Deferred income taxes 62,147 60,401 73,345 75,419 80,675 76,654
 
Other liabilities 5,276 6,790 7,300 9,172 6,845 12,125
 
Stockholders' equity:
Common stock 12,584 12,644 12,707 12,723 12,794 12,847
Additional paid-in capital 981,985 988,607 1,005,443 1,015,697 1,034,526 1,045,897
Retained earnings 602,829 595,225 593,681 597,837 591,798 590,759
Accumulated other comprehensive income 13,662 14,428 11,856 9,364 9,413 10,142
Treasury stock, at cost (928,203 ) (931,470 )     (945,205 )     (945,213 )     (945,274 ) (961,343 )
Total stockholders' equity 682,857   679,434       678,482       690,408       703,257   698,302  
 
1,323,301   1,277,473       1,315,228       1,313,953       1,322,424   1,295,031  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
                           
                             
FY2014 06/30/14     09/30/14     12/31/14     03/31/15     FY2015 06/30/15
 
 
 
Cash flows from operating activities:
Net earnings (loss) 8,803 (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) (1,039 )
Loss (earnings) from discontinued operations, net of tax (26,143 ) (3,137 ) (5,557 ) (3,819 ) (2,998 ) (15,511 ) (4,143 )
Non-cash operating activities:
Depreciation and amortization 56,900 15,920 18,257 20,510 25,760 80,447 21,775
Loss (gain) on disposal or impairment of assets, net (2,591 ) (254 ) 47 (68 ) 1,975 1,700 241
Impairment of goodwill and other 24,953 - - - - - -
Loss on early extinguishment of debt 664 - - - - - -
Deferred income taxes 10,935 (1,843 ) (4,179 ) 4,002 (2,945 ) (4,965 ) (1,522 )
Non-cash stock compensation expense 13,206 3,925 7,725 8,450 8,216 28,316 8,123
Changes in operating assets and liabilities:
Accounts receivable (2,797 ) 11,399 (848 ) (978 ) (5,829 ) 3,744 (8,037 )
Other assets (8,609 ) 3,590 1,778 (3,959 ) 11,770 13,179 809
Deferred costs (445 ) (211 ) - (105 ) 4 (312 ) (425 )
Accounts payable and other liabilities 14,369 (29,057 ) 967 1,411 (1,450 ) (28,129 ) (3,530 )
Deferred revenue 6,541   (8,184 )     (2,321 )     3,290       908       (6,307 ) (255 )
Net cash provided by operating activities 95,786   (15,456 )     14,325       32,890       29,372       61,131   11,997  
Cash flows from investing activities:
Capitalized software (24,517 ) (4,969 ) (5,608 ) (4,408 ) (3,602 ) (18,587 ) (2,797 )
Capital expenditures (25,951 ) (16,778 ) (15,362 ) (10,212 ) (14,600 ) (56,952 ) (12,876 )
Data acquisition costs (7,745 ) (635 ) (468 ) (394 ) (374 ) (1,871 ) (430 )
Payments from investments 3,823 - - - - - -
Net cash paid in acquisitions (500 ) -       (265,672 )     -       -       (265,672 ) -  
Net cash used in investing activities (54,890 ) (22,382 )     (287,110 )     (15,014 )     (18,576 )     (343,082 ) (16,103 )
Cash flows from financing activities:
Proceeds from debt 300,000 - - - - - -
Payments of debt (231,151 ) (4,917 ) (4,839 ) (8,498 ) (8,347 ) (26,601 ) (8,099 )
Fees for debt refinancing (4,370 ) - - - - - -
Sale of common stock, net of stock acquired for withholding taxes 80,490 (674 ) (1,813 ) 1,680 5,846 5,039 2,069
Tax impact of stock options, warrants, and restricted stock (52,663 ) - (9,868 ) - - (9,868 ) (77 )
Acquisition of treasury stock 11,295 - - - 4,645 4,645 (14,951 )
Acquisition of NCI (600 ) -       -       -       -       -   -  
Net cash provided (used) by financing activities 103,001   (5,591 )     (16,520 )     (6,818 )     2,144       (26,785 ) (21,058 )
Cash flows from discontinued operations:
From operating activities 69,190 17,310 11,547 9,916 5,080 43,853 11,653
From investing activities (13,347 ) 704 (4,034 ) (2,920 ) (3,004 ) (9,254 ) (4,484 )
From financing activities (4,744 ) (585 )     (517 )     (459 )     (259 )     (1,820 ) (153 )
Net cash provided by discontinued operations 51,099   17,429       6,996       6,537       1,817       32,779   7,016  
Effect of exchange rate changes on cash 616   332       (801 )     (512 )     (638 )     (1,619 ) 330  
 
Net change in cash and cash equivalents 195,612 (25,668 ) (283,110 ) 17,083 14,119 (277,576 ) (17,818 )
Cash and cash equivalents at beginning of period 222,974   418,586       392,918       109,808       126,891       418,586   141,010  
Cash and cash equivalents at end of period 418,586   392,918       109,808       126,891       141,010       141,010   123,192  
 
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 11,762 2,875 2,516 809 2,473 8,673 2,185
Income taxes 21,702 297 59 182 (4,383 ) (3,845 ) (1,044 )
Prepayment of debt 215,000 - - - - - -
Payments on capital leases and installment payment arrangements 8,379 1,235 1,084 930 574 3,823 216
Other debt payments, excluding line of credit 12,516 4,267 4,272 8,027 8,032 24,598 8,036
 

Contacts

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

Contacts

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