CONWAY, Ark--(BUSINESS WIRE)--Acxiom® (Nasdaq: ACXM), the data foundation for the world's best marketers, today announced financial results for its third quarter ended December 31, 2017.
Financial Highlights
- Revenue: Total revenue was $235 million, up 5% compared to the third quarter of last year.
- Operating Income: GAAP operating income was $11 million compared to operating income of $9 million in the prior year. Non-GAAP operating income grew 14% to approximately $38 million.
- Earnings per Share: GAAP diluted earnings per share were $0.28 compared to earnings per share of $0.01 in the prior year. Non-GAAP diluted earnings per share were $0.31 compared to $0.24 a year ago. Current period results include a $0.28 GAAP tax benefit and $0.04 non-GAAP tax benefit associated with the recent tax reform legislation.
- Operating Cash Flow: Operating cash flow was $44 million, down from $49 million in the prior year.
- Free Cash Flow to Equity: Free cash flow to equity was $27 million, roughly flat compared to the prior year. For the trailing twelve-month period, free cash flow to equity improved to $67 million, up from $53 million in the comparable period.
Segment Results
$M
Connectivity |
Q318 |
Q317 |
Y/Y Δ |
|||
Revenue |
$ 56 | $ 39 | 45% | |||
Gross Profit |
$ 38 | $ 23 | 64% | |||
Gross Margin | 68% | 60% | 810 bps | |||
Segment Operating Income |
$ 7 | $ 2 | 263% | |||
Segment Margin | 12% | 5% | 730 bps | |||
Audience Solutions |
Q318 |
Q317 |
Y/Y Δ |
|||
Revenue |
$ 84 | $ 83 | 1% | |||
Gross Profit |
$ 53 | $ 53 | (1%) | |||
Gross Margin | 63% | 64% | (110 bps) | |||
Segment Operating Income |
$ 33 | $ 35 | (4%) | |||
Segment Margin | 39% | 41% | (220 bps) | |||
Marketing Services |
Q318 |
Q317 |
Y/Y Δ |
|||
Revenue |
$ 94 | $ 101 | (7%) | |||
Gross Profit |
$ 36 | $ 37 | (5%) | |||
Gross Margin | 38% | 37% | 80 bps | |||
Segment Operating Income |
$ 22 | $ 21 | 4% | |||
Segment Margin | 23% | 21% | 250 bps |
A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
"We again delivered a solid quarter, led by the strong performance of our Connectivity division," said Acxiom CEO Scott Howe. "While revenue in Audience Solutions was softer than expected, we continue to be pleased with our ongoing ability to generate meaningful cash flows in both Marketing Services and Audience Solutions. On a trailing-twelve month basis, these businesses have generated over $200 million in segment income."
Recent Business Highlights
- LiveRamp® added over 50 new direct clients during the quarter and added several new partner integrations. Marketers can now onboard and activate their data across a growing network of more than 550 publishers and marketing technology providers.
- Audience Solutions announced the launch of a new partnership with 4INFO to deliver location-based audience segments, modeled by Acxiom. The data-as-a-service solution combines 4INFO's Predictive Visitors™ audience segments with Acxiom data to create location-informed targeting segments for digital campaigns.
- Marketing Services posted its second largest bookings quarter since the Company divisionalized, driven by several meaningful new logo and upsell wins.
- Acxiom received the 2018 Supplier of the Year award from Walmart Services in recognition of its high level of performance and service.
- Acxiom was recognized as a great workplace by the independent analysts at Great Places to Work®. For the second year in a row, Acxiom earned this credential based on positive employee feedback in areas such as culture, rewards, work-life balance, communication and leadership. In addition, Great Places to Work and FORTUNE named Acxiom one of the 2018 Best Workplaces in Technology.
- Acxiom repurchased 729,000 shares for approximately $20 million during the quarter. Since the inception of its share repurchase program in August 2011, Acxiom has repurchased 18.4 million shares for $325 million, with $75 million remaining under authorization.
Financial Outlook
Acxiom's non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, restructuring charges and business separation costs.
For fiscal 2018, Acxiom now expects to report:
- Revenue of between $910 million and $915 million, an increase of approximately 6% year-over-year after adjusting for the Acxiom Impact divestiture. This is reduced from our previous guidance of between $920 million and $930 million primarily as a result of lower expected revenue from Audience Solutions.
- GAAP diluted earnings per share of between $0.19 and $0.23. Included in this guidance is an assumed tax reform benefit of approximately $0.28.
- Non-GAAP diluted earnings per share of between $0.85 and $0.89, an increase of between 20% and 25% year-over-year. Included in this guidance is an assumed tax reform benefit of between $0.04 and $0.05. This guidance is unchanged on a comparable basis.
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on our investor site. A slide presentation will be referenced during the call and can be accessed here.
About Acxiom
Acxiom provides the data foundation for the world's best marketers. We enable people-based marketing everywhere through a simple, open approach to connecting systems and data that drives seamless customer experiences and higher ROI. A leader in identity and ethical data use for more than 48 years, Acxiom helps thousands of clients and partners around the globe work together to create a world where all marketing is relevant. Acxiom is a registered trademark of Acxiom Corporation. For more information, visit Acxiom.com.
Forward-Looking Statements
This release and today's conference call 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 the integration of acquired businesses may not be successful as planned; 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 purchasers will reduce their reliance on us by developing and using their own, or alternative, sources of data generally or with respect to certain data elements or categories; 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 the possibility that other risks and uncertainties may emerge, including those detailed from time to time in our current and 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, 2017, which was filed with the Securities and Exchange Commission on May 26, 2017.
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.
To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.
Acxiom, LiveRamp, IdentityLink, InfoBase and all other Acxiom marks contained herein are trademarks or service marks of Acxiom Corporation. All other marks are the property of their respective owners.
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||
For the Three Months Ended | ||||||||||||
December 31, |
||||||||||||
|
2017 |
2016 |
$ |
% |
||||||||
Revenues | 234,871 | 223,312 | 11,559 | 5.2 | % | |||||||
Cost of revenue | 115,920 | 116,468 | (548 | ) | (0.5 | %) | ||||||
Gross profit | 118,951 | 106,844 | 12,107 | 11.3 | % | |||||||
% Gross margin | 50.6 | % | 47.8 | % | ||||||||
Operating expenses: | ||||||||||||
Research and development | 23,318 | 20,950 | 2,368 | 11.3 | % | |||||||
Sales and marketing | 53,730 | 43,048 | 10,682 | 24.8 | % | |||||||
General and administrative | 30,886 | 31,620 | (734 | ) | (2.3 | %) | ||||||
Gains, losses and other items, net | (41 | ) | 2,111 | (2,152 | ) | (101.9 | %) | |||||
Total operating expenses | 107,893 | 97,729 | 10,164 | 10.4 | % | |||||||
Income from operations | 11,058 | 9,115 | 1,943 | 21.3 | % | |||||||
% Margin | 4.7 | % | 4.1 | % | ||||||||
Other income (expense): | ||||||||||||
Interest expense | (2,566 | ) | (1,743 | ) | (823 | ) | (47.2 | %) | ||||
Other, net | 419 | 35 | 384 | 1097.1 | % | |||||||
Total other expense | (2,147 | ) | (1,708 | ) | (439 | ) | (25.7 | %) | ||||
Income before income taxes | 8,911 | 7,407 | 1,504 | 20.3 | % | |||||||
Income taxes | (14,030 | ) | 6,334 | (20,364 | ) | (321.5 | %) | |||||
Net earnings | 22,941 | 1,073 | 21,868 | 2038.0 | % | |||||||
Basic earnings per share | 0.29 | 0.01 | 0.28 | 2800.0 | % | |||||||
Diluted earnings per share | 0.28 | 0.01 | 0.27 | 2700.0 | % | |||||||
Basic weighted average shares | 79,043 | 77,507 | ||||||||||
Diluted weighted average shares | 81,869 | 79,851 | ||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||
For the Nine Months Ended |
||||||||||||
2017 | 2016 |
$ |
% |
|||||||||
Revenues | 672,625 | 655,380 | 17,245 | 2.6 | % | |||||||
Cost of revenue | 344,952 | 359,392 | (14,440 | ) | (4.0 | %) | ||||||
Gross profit | 327,673 | 295,988 | 31,685 | 10.7 | % | |||||||
% Gross margin | 48.7 | % | 45.2 | % | ||||||||
Operating expenses: | ||||||||||||
Research and development | 70,894 | 58,631 | 12,263 | 20.9 | % | |||||||
Sales and marketing | 152,288 | 118,243 | 34,045 | 28.8 | % | |||||||
General and administrative | 95,166 | 91,993 | 3,173 | 3.4 | % | |||||||
Gains, losses and other items, net | 3,521 | 2,724 | 797 | 29.3 | % | |||||||
Total operating expenses | 321,869 | 271,591 | 50,278 | 18.5 | % | |||||||
Income from operations | 5,804 | 24,397 | (18,593 | ) | (76.2 | %) | ||||||
% Margin | 0.9 | % | 3.7 | % | ||||||||
Other income (expense): | ||||||||||||
Interest expense | (7,432 | ) | (5,244 | ) | (2,188 | ) | (41.7 | %) | ||||
Other, net | (61 | ) | 135 | (196 | ) | (145.5 | %) | |||||
Total other expense | (7,493 | ) | (5,109 | ) | (2,384 | ) | (46.7 | %) | ||||
Income (loss) before income taxes | (1,689 | ) | 19,288 | (20,977 | ) | (108.8 | %) | |||||
Income taxes | (19,994 | ) | 7,099 | (27,093 | ) | (381.6 | %) | |||||
Net earnings | 18,305 | 12,189 | 6,116 | 50.2 | % | |||||||
Basic earnings per share | 0.23 | 0.16 | 0.07 | 43.8 | % | |||||||
Diluted earnings per share | 0.22 | 0.15 | 0.07 | 46.7 | % | |||||||
Basic weighted average shares | 78,983 | 77,475 | ||||||||||
Diluted weighted average shares | 81,594 | 79,494 | ||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF GAAP TO NON-GAAP EPS (1) |
||||||||||
(Unaudited) | ||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||
2017 | 2016 | 2017 | 2016 | |||||||
Earnings (loss) before income taxes | 8,911 | 7,407 | (1,689 | ) | 19,288 | |||||
Income taxes | (14,030 | ) | 6,334 | (19,994 | ) | 7,099 | ||||
Net earnings | 22,941 | 1,073 | 18,305 | 12,189 | ||||||
Earnings per share: | ||||||||||
Basic | 0.29 | 0.01 | 0.23 | 0.16 | ||||||
Diluted | 0.28 | 0.01 | 0.22 | 0.15 | ||||||
Excluded items: | ||||||||||
Purchased intangible asset amortization (cost of revenue) | 5,971 | 4,621 | 17,958 | 12,588 | ||||||
Non-cash stock compensation (cost of revenue and operating expenses) | 15,919 | 13,427 | 46,707 | 33,955 | ||||||
Restructuring and merger charges (gains, losses, and other) | (41 | ) | 2,111 | 3,521 | 2,725 | |||||
Separation and transformation costs (general and administrative) | 5,214 | 4,118 | 17,775 | 5,573 | ||||||
Total excluded items | 27,063 | 24,277 | 85,961 | 54,841 | ||||||
|
||||||||||
Income before income taxes and excluding items |
35,974 | 31,684 | 84,272 | 74,129 | ||||||
Income taxes (2) | 10,704 | 12,751 | 29,713 | 29,513 | ||||||
Non-GAAP net earnings | 25,270 | 18,933 | 54,559 | 44,616 | ||||||
Non-GAAP earnings per share: | ||||||||||
Basic | 0.32 | 0.24 | 0.69 | 0.58 | ||||||
Diluted | 0.31 | 0.24 | 0.67 | 0.56 | ||||||
Basic weighted average shares | 79,043 | 77,507 | 78,983 | 77,475 | ||||||
Diluted weighted average shares | 81,869 | 79,851 | 81,594 | 79,494 | ||||||
|
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated using an effective non-GAAP tax rate of 29.8% and 40.2% in the third quarter of fiscal 2018 and 2017, respectively, and 35.3% and 39.8% for the nine months ended December 31, 2017 and 2016, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the Tax Cuts and Jobs Act and net tax effects of the excluded items.
ACXIOM CORPORATION AND SUBSIDIARIES | |||||||||
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS (1) |
|||||||||
(Unaudited) | |||||||||
(Dollars in thousands) | |||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||
2017 |
2016 | 2017 | 2016 | ||||||
Income from operations | 11,058 | 9,115 | 5,804 | 24,397 | |||||
Excluded items: | |||||||||
Purchased intangible asset amortization (cost of revenue) | 5,971 | 4,621 | 17,958 | 12,588 | |||||
Non-cash stock compensation (cost of revenue and operating expenses) | 15,919 | 13,427 | 46,707 | 33,955 | |||||
Restructuring and merger charges (gains, losses, and other) | (41 | ) | 2,111 | 3,521 | 2,725 | ||||
Separation and transformation costs (general and administrative) | 5,214 | 4,118 | 17,775 | 5,573 | |||||
Total excluded items | 27,063 | 24,277 | 85,961 | 54,841 | |||||
Income from operations before excluded items | 38,121 | 33,392 | 91,765 | 79,238 |
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
RESULTS BY SEGMENT | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands) | ||||||||||||
For the Three Months Ended |
||||||||||||
2017 | 2016 |
$ |
% |
|||||||||
Revenues | ||||||||||||
Marketing Services | 94,457 | 101,177 | (6,720 | ) | (6.6 | %) | ||||||
Audience Solutions | 84,436 | 83,399 | 1,037 | 1.2 | % | |||||||
Connectivity | 55,978 | 38,736 | 17,242 | 44.5 | % | |||||||
Total operating segment revenues |
234,871 | 223,312 | 11,559 | 5.2 | % | |||||||
Gross profit | ||||||||||||
Marketing Services | 35,798 | 37,494 | (1,696 | ) | (4.5 | %) | ||||||
Audience Solutions | 52,821 | 53,120 | (299 | ) | (0.6 | %) | ||||||
Connectivity | 37,914 | 23,091 | 14,823 | 64.2 | % | |||||||
Total operating segment gross profit | 126,533 | 113,705 | 12,828 | 11.3 | % | |||||||
Gross margin % | ||||||||||||
Marketing Services | 37.9 | % | 37.1 | % | ||||||||
Audience Solutions | 62.6 | % | 63.7 | % | ||||||||
Connectivity | 67.7 | % | 59.6 | % | ||||||||
Total operating segment gross margin | 53.9 | % | 50.9 | % | ||||||||
Income from operations | ||||||||||||
Marketing Services | 22,063 | 21,127 | 936 | 4.4 | % | |||||||
Audience Solutions | 33,112 | 34,572 | (1,460 | ) | (4.2 | %) | ||||||
Connectivity | 6,808 | 1,877 | 4,931 | 262.7 | % | |||||||
Total operating segment income from operations | 61,983 | 57,576 | 4,407 | 7.7 | % | |||||||
Operating income margin % | ||||||||||||
Marketing Services | 23.4 | % | 20.9 | % | ||||||||
Audience Solutions | 39.2 | % | 41.5 | % | ||||||||
Connectivity | 12.2 | % | 4.8 | % | ||||||||
Total operating segment operating margin | 26.4 | % | 25.8 | % | ||||||||
Some totals may not add due to rounding. | ||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
RESULTS BY SEGMENT | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands) | ||||||||||||
For the Nine Months Ended |
||||||||||||
2017 | 2016 |
$ |
% |
|||||||||
Revenues | ||||||||||||
Marketing Services | 280,093 | 316,571 | (36,478 | ) | (11.5 | %) | ||||||
Audience Solutions | 238,984 | 235,669 | 3,315 | 1.4 | % | |||||||
Connectivity | 153,548 | 103,140 | 50,408 | 48.9 | % | |||||||
Total operating segment revenues | 672,625 | 655,380 | 17,245 | 2.6 | % | |||||||
Gross profit | ||||||||||||
Marketing Services | 101,476 | 109,440 | (7,964 | ) | (7.3 | %) | ||||||
Audience Solutions | 148,352 | 143,030 | 5,322 | 3.7 | % | |||||||
Connectivity | 100,730 | 60,509 | 40,221 | 66.5 | % | |||||||
Total operating segment gross profit | 350,558 | 312,979 | 37,579 | 12.0 | % | |||||||
Gross margin % | ||||||||||||
Marketing Services | 36.2 | % | 34.6 | % | ||||||||
Audience Solutions | 62.1 | % | 60.7 | % | ||||||||
Connectivity | 65.6 | % | 58.7 | % | ||||||||
Total operating segment gross margin | 52.1 | % | 47.8 | % | ||||||||
Income from operations | ||||||||||||
Marketing Services | 63,721 | 61,109 | 2,612 | 4.3 | % | |||||||
Audience Solutions | 91,151 | 89,640 | 1,511 | 1.7 | % | |||||||
Connectivity | 12,475 | 3,831 | 8,644 | 225.6 | % | |||||||
Total operating segment income from operations | 167,347 | 154,580 | 12,767 | 8.3 | % | |||||||
Operating income margin % | ||||||||||||
Marketing Services | 22.7 | % | 19.3 | % | ||||||||
Audience Solutions | 38.1 | % | 38.0 | % | ||||||||
Connectivity | 8.1 | % | 3.7 | % | ||||||||
Total operating segment operating margin | 24.9 | % | 23.6 | % | ||||||||
Some totals may not add due to rounding. | ||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | |||||||||
RECONCILIATION OF SEGMENT RESULTS | |||||||||
(Unaudited) | |||||||||
(Dollars in thousands) | |||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Total operating segment gross profit | 126,533 | 113,705 | 350,558 | 312,979 | |||||
Less: | |||||||||
Purchased intangible asset amortization | 5,971 | 4,621 | 17,958 | 12,588 | |||||
Non-cash stock compensation | 1,612 | 2,240 | 4,927 | 4,404 | |||||
Gross profit | 118,951 | 106,844 | 327,673 | 295,988 | |||||
Total operating segment income from operations | 61,983 | 57,576 | 167,347 | 154,580 | |||||
Less: | |||||||||
Corporate expenses | 23,862 | 24,184 | 75,582 | 75,342 | |||||
Purchased intangible asset amortization | 5,971 | 4,621 | 17,958 | 12,588 | |||||
Non-cash stock compensation | 15,919 | 13,427 | 46,707 | 33,955 | |||||
Restructuring charges | (41 | ) | 2,111 | 3,521 | 2,725 | ||||
Separation and transformation costs | 5,214 | 4,118 | 17,775 | 5,573 | |||||
Income from operations | 11,058 | 9,115 | 5,804 | 24,397 | |||||
Some totals may not add due to rounding. | |||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF ADJUSTED EBITDA (1) | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands) | ||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Net earnings | 22,941 | 1,073 | 18,305 | 12,189 | ||||||||
Income taxes | (14,030 | ) | 6,334 | (19,994 | ) | 7,099 | ||||||
Other expense | (2,147 | ) | (1,708 | ) | (7,493 | ) | (5,109 | ) | ||||
Income from operations | 11,058 | 9,115 | 5,804 | 24,397 | ||||||||
Depreciation and amortization | 21,200 | 19,947 | 63,719 | 61,097 | ||||||||
EBITDA | 32,258 | 29,062 | 69,523 | 85,494 | ||||||||
Other adjustments: | ||||||||||||
Non-cash stock compensation (cost of revenue and operating expenses) | 15,919 | 13,427 | 46,707 | 33,955 | ||||||||
Gains, losses, and other items, net | (41 | ) | 2,111 | 3,521 | 2,725 | |||||||
Separation and transformation costs (general and administrative) | 5,214 | 4,118 | 17,775 | 5,573 | ||||||||
Other adjustments | 21,092 | 19,656 | 68,003 | 42,253 | ||||||||
Adjusted EBITDA | 53,350 | 48,718 | 137,526 | 127,747 | ||||||||
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(Dollars in thousands) | ||||||||||||
December 31, |
March 31, |
$ |
% |
|||||||||
(unaudited) | ||||||||||||
Assets |
||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 177,807 | 170,343 | 7,464 | 4.4 | % | |||||||
Trade accounts receivable, net | 155,634 | 142,768 | 12,866 | 9.0 | % | |||||||
Refundable income taxes | 6,365 | 7,098 | (733 | ) | (10.3 | %) | ||||||
Other current assets | 42,357 | 48,310 | (5,953 | ) | (12.3 | %) | ||||||
Total current assets | 382,163 | 368,519 | 13,644 | 3.7 | % | |||||||
Property and equipment | 483,355 | 476,281 | 7,074 | 1.5 | % | |||||||
Less - accumulated depreciation and amortization | 330,316 | 320,307 | 10,009 | 3.1 | % | |||||||
Property and equipment, net | 153,039 | 155,974 | (2,935 | ) | (1.9 | %) | ||||||
Software, net of accumulated amortization | 37,489 | 47,638 | (10,149 | ) | (21.3 | %) | ||||||
Goodwill | 592,827 | 592,731 | 96 | 0.0 | % | |||||||
Purchased software licenses, net of accumulated amortization | 7,775 | 7,972 | (197 | ) | (2.5 | %) | ||||||
Deferred income taxes | 9,621 | 10,261 | (640 | ) | (6.2 | %) | ||||||
Other assets, net | 43,576 | 51,443 | (7,867 | ) | (15.3 | %) | ||||||
1,226,490 | 1,234,538 | (8,048 | ) | (0.7 | %) | |||||||
Liabilities and Stockholders' Equity |
||||||||||||
Current liabilities: | ||||||||||||
Current installments of long-term debt | 1,837 | 39,819 | (37,982 | ) | (95.4 | %) | ||||||
Trade accounts payable | 46,211 | 40,208 | 6,003 | 14.9 | % | |||||||
Accrued payroll and related expenses | 36,592 | 53,238 | (16,646 | ) | (31.3 | %) | ||||||
Other accrued expenses | 53,999 | 59,861 | (5,862 | ) | (9.8 | %) | ||||||
Deferred revenue | 34,169 | 37,087 | (2,918 | ) | (7.9 | %) | ||||||
Total current liabilities | 172,808 | 230,213 | (57,405 | ) | (24.9 | %) | ||||||
Long-term debt | 227,943 | 189,241 | 38,702 | 20.5 | % | |||||||
Deferred income taxes | 34,300 | 58,374 | (24,074 | ) | (41.2 | %) | ||||||
Other liabilities | 17,328 | 17,730 | (402 | ) | (2.3 | %) | ||||||
Stockholders' equity: | ||||||||||||
Common stock | 13,552 | 13,288 | 264 | 2.0 | % | |||||||
Additional paid-in capital | 1,216,565 | 1,154,429 | 62,136 | 5.4 | % | |||||||
Retained earnings | 623,156 | 602,609 | 20,547 | 3.4 | % | |||||||
Accumulated other comprehensive income | 9,826 | 7,999 | 1,827 | 22.8 | % | |||||||
Treasury stock, at cost | (1,088,988 | ) | (1,039,345 | ) | (49,643 | ) | (4.8 | %) | ||||
Total stockholders' equity | 774,111 | 738,980 | 35,131 | 4.8 | % | |||||||
1,226,490 | 1,234,538 | (8,048 | ) | (0.7 | %) | |||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(Unaudited) | ||||||
(Dollars in thousands) | ||||||
For the Three Months Ended |
||||||
2017 | 2016 | |||||
Cash flows from operating activities: | ||||||
Net earnings | 22,941 | 1,073 | ||||
Non-cash operating activities: | ||||||
Depreciation and amortization | 21,200 | 19,947 | ||||
Loss (gain) on disposal or impairment of assets | 235 | (78 | ) | |||
Deferred income taxes | (17,213 | ) | 4,557 | |||
Non-cash stock compensation expense | 15,911 | 13,427 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (14,048 | ) | (4,597 | ) | ||
Other assets | 2,271 | 4,974 | ||||
Accounts payable and other liabilities | 8,610 | 10,172 | ||||
Deferred revenue | 3,723 | (542 | ) | |||
Net cash provided by operating activities | 43,630 | 48,933 | ||||
Cash flows from investing activities: | ||||||
Capitalized software | (3,188 | ) | (3,296 | ) | ||
Capital expenditures | (12,432 | ) | (9,557 | ) | ||
Data acquisition costs | (198 | ) | (196 | ) | ||
Equity investments | (1,000 | ) | - | |||
Net cash paid in acquisition | - | (137,383 | ) | |||
Net cash used in investing activities | (16,818 | ) | (150,432 | ) | ||
Cash flows from financing activities: | ||||||
Proceeds from debt | - | 70,000 | ||||
Payments of debt | (582 | ) | (8,062 | ) | ||
Sale of common stock, net of stock acquired for withholding taxes | 1,412 | 2,370 | ||||
Excess tax benefits from share-based compensation | - | 370 | ||||
Acquisition of treasury stock | (19,665 | ) | - | |||
Net cash provided by (used in) financing activities | (18,835 | ) | 64,678 | |||
Effect of exchange rate changes on cash | 323 | (738 | ) | |||
Net change in cash and cash equivalents | 8,300 | (37,559 | ) | |||
Cash and cash equivalents at beginning of period | 169,507 | 175,409 | ||||
Cash and cash equivalents at end of period | 177,807 | 137,850 | ||||
Supplemental cash flow information: | ||||||
Cash paid during the period for: | ||||||
Interest | 1,950 | 1,339 | ||||
Income taxes | 328 | 4,599 | ||||
Noncash investing and financing activities: | ||||||
Leasehold improvements paid directly by lessor | 978 | - | ||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(Unaudited) | ||||
(Dollars in thousands) | ||||
For the Nine Months Ended |
||||
2017 | 2016 | |||
Cash flows from operating activities: | ||||
Net earnings | 18,305 | 12,189 | ||
Non-cash operating activities: | ||||
Depreciation and amortization | 63,719 | 61,097 | ||
Loss (gain) on disposal or impairment of assets | 2,646 | (520) | ||
Accelerated deferred debt costs | 720 | - | ||
Deferred income taxes | (20,451) | (1,982) | ||
Non-cash stock compensation expense | 46,707 | 33,955 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (11,432) | (6,161) | ||
Other assets | (1,277) | 8,653 | ||
Accounts payable and other liabilities | (18,232) | (11,819) | ||
Deferred revenue | (4,314) | (10,247) | ||
Net cash provided by operating activities | 76,391 | 85,165 | ||
Cash flows from investing activities: | ||||
Capitalized software | (10,332) | (11,171) | ||
Capital expenditures | (26,950) | (30,096) | ||
Data acquisition costs | (621) | (463) | ||
Equity investments | (1,000) | - | ||
Net cash received in disposition | 4,000 | 16,988 | ||
Net cash paid in acquisitions | - | (137,383) | ||
Net cash used in investing activities | (34,903) | (162,125) | ||
Cash flows from financing activities: | ||||
Proceeds from debt | 230,000 | 70,000 | ||
Payments of debt | (226,732) | (24,173) | ||
Fees for debt refinancing | (4,001) | - | ||
Sale of common stock, net of stock acquired for withholding taxes | 5,107 | 9,670 | ||
Excess tax benefits from share-based compensation | - | 1,785 | ||
Acquisition of treasury stock | (39,441) | (30,542) | ||
Net cash provided by (used in) financing activities | (35,067) | 26,740 | ||
Effect of exchange rate changes on cash | 1,043 | (1,559) | ||
Net change in cash and cash equivalents | 7,464 | (51,779) | ||
Cash and cash equivalents at beginning of period | 170,343 | 189,629 | ||
Cash and cash equivalents at end of period | 177,807 | 137,850 | ||
Supplemental cash flow information: | ||||
Cash paid during the period for: | ||||
Interest | 6,712 | 5,301 | ||
Income taxes | 1,152 | 4,796 | ||
Noncash investing and financing activities: | ||||
Leasehold improvements paid directly by lessor | 978 | - | ||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||
CALCULATION OF FREE CASH FLOW TO EQUITY (1) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
06/30/16 | 09/30/16 | 12/31/16 | 03/31/17 |
FY2017 |
06/30/17 | 09/30/17 | 12/31/17 | YTD FY2018 | ||||||||||||||||||
Net Cash Provided by Operating Activities | 750 | 35,482 | 48,933 | 30,665 | 115,830 | 4,951 | 27,810 | 43,630 | 76,391 | |||||||||||||||||
Less (plus): | ||||||||||||||||||||||||||
Capitalized software | (3,982 | ) | (3,893 | ) | (3,296 | ) | (3,306 | ) | (14,477 | ) | (3,388 | ) | (3,756 | ) | (3,188 | ) | (10,332 | ) | ||||||||
Capital expenditures | (10,694 | ) | (9,845 | ) | (9,557 | ) | (17,897 | ) | (47,993 | ) | (6,888 | ) | (7,630 | ) | (12,432 | ) | (26,950 | ) | ||||||||
Data acquisition costs | (20 | ) | (247 | ) | (196 | ) | (418 | ) | (881 | ) | (190 | ) | (233 | ) | (198 | ) | (621 | ) | ||||||||
Required debt payments | (8,053 | ) | (8,058 | ) | (8,062 | ) | (8,070 | ) | (32,243 | ) | (572 | ) | (578 | ) | (582 | ) | (1,732 | ) | ||||||||
Net cash received in disposition | - | 16,988 | - | - | 16,988 | - | 4,000 | - | 4,000 | |||||||||||||||||
Proceeds from sales of assets | - | - | - | 25,494 | 25,494 | - | - | - | - | |||||||||||||||||
Free Cash Flow to Equity | (21,999 | ) | 30,427 | 27,822 | 26,468 | 62,718 | (6,087 | ) | 19,613 | 27,230 | 40,756 | |||||||||||||||
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
ACXIOM CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||
Q3 FY18 to Q3 FY17 |
|||||||||||||||||||||||||||||||||
06/30/16 | 09/30/16 | 12/31/16 | 03/31/17 | FY2017 | 06/30/17 | 09/30/17 | 12/31/17 | YTD FY2018 |
% |
$ | |||||||||||||||||||||||
Revenues | 214,801 | 217,267 | 223,312 | 224,867 | 880,247 | 212,514 | 225,240 | 234,871 | 672,625 | 5.2 | % | 11,559 | |||||||||||||||||||||
Cost of revenue | 122,819 | 120,105 | 116,468 | 118,294 | 477,686 | 113,960 | 115,072 | 115,920 | 344,952 | -0.5 | % | (548 | ) | ||||||||||||||||||||
Gross profit | 91,982 | 97,162 | 106,844 | 106,573 | 402,561 | 98,554 | 110,168 | 118,951 | 327,673 | 11.3 | % | 12,107 | |||||||||||||||||||||
% Gross margin | 42.8 | % | 44.7 | % | 47.8 | % | 47.4 | % | 45.7 | % | 46.4 | % | 48.9 | % | 50.6 | % | 48.7 | % | |||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||
Research and development | 18,652 | 19,029 | 20,950 | 23,478 | 82,109 | 23,563 | 24,013 | 23,318 | 70,894 | 11.3 | % | 2,368 | |||||||||||||||||||||
Sales and marketing | 37,348 | 37,847 | 43,048 | 48,433 | 166,676 | 48,440 | 50,118 | 53,730 | 152,288 | 24.8 | % | 10,682 | |||||||||||||||||||||
General and administrative | 27,506 | 32,866 | 31,620 | 37,721 | 129,714 | 32,356 | 31,924 | 30,886 | 95,166 | -2.3 | % | (734 | ) | ||||||||||||||||||||
Gains, losses and other items, net | 314 | 300 | 2,111 | 5,650 | 8,373 | (98 | ) | 3,660 | (41 | ) | 3,521 | -101.9 | % | (2,152 | ) | ||||||||||||||||||
Total operating expenses | 83,820 | 90,042 | 97,729 | 115,282 | 386,872 | 104,261 | 109,715 | 107,893 | 321,869 | 10.4 | % | 10,164 | |||||||||||||||||||||
Income (loss) from operations | 8,162 | 7,120 | 9,115 | (8,709 | ) | 15,689 | (5,707 | ) | 453 | 11,058 | 5,804 | 21.3 | % | 1,943 | |||||||||||||||||||
% Margin | 3.8 | % | 3.3 | % | 4.1 | % | -3.9 | % | 1.8 | % | -2.7 | % | 0.2 | % | 4.7 | % | 0.9 | % | |||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||
Interest expense | (1,812 | ) | (1,689 | ) | (1,743 | ) | (2,137 | ) | (7,381 | ) | (2,342 | ) | (2,524 | ) | (2,566 | ) | (7,432 | ) | -47.2 | % | (823 | ) | |||||||||||
Other, net | 307 | (207 | ) | 35 | 199 | 334 | (672 | ) | 192 | 419 | (61 | ) | 1096.6 | % | 384 | ||||||||||||||||||
Total other expense | (1,505 | ) | (1,896 | ) | (1,708 | ) | (1,937 | ) | (7,047 | ) | (3,014 | ) | (2,332 | ) | (2,147 | ) | (7,493 | ) | -25.7 | % | (439 | ) | |||||||||||
Income (loss) before income taxes | 6,657 | 5,224 | 7,407 | (10,646 | ) | 8,642 | (8,721 | ) | (1,879 | ) | 8,911 | (1,689 | ) | 20.3 | % | 1,504 | |||||||||||||||||
Income taxes | 2,681 | (1,916 | ) | 6,334 | (2,565 | ) | 4,534 | (7,421 | ) | 1,457 | (14,030 | ) | (19,994 | ) | -321.5 | % | (20,364 | ) | |||||||||||||||
Net earnings (loss) | 3,976 | 7,140 | 1,073 | (8,081 | ) | 4,108 | (1,300 | ) | (3,336 | ) | 22,941 | 18,305 | 2038.2 | % | 21,868 | ||||||||||||||||||
Diluted earnings (loss) per share | 0.05 | 0.09 | 0.01 | (0.10 | ) | 0.05 | (0.02 | ) | (0.04 | ) | 0.28 | 0.22 | 1985.5 | % | 0.27 | ||||||||||||||||||
Some earnings (loss) per share amounts may not add due to rounding. | |||||||||||||||||||||||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP EPS (1) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||
06/30/16 | 09/30/16 | 12/31/16 | 03/31/17 |
FY2017 |
06/30/17 | 09/30/17 | 12/31/17 | YTD FY2018 | ||||||||||||||||
Earnings (loss) before income taxes | 6,657 | 5,224 | 7,407 | (10,646 | ) | 8,642 | (8,721 | ) | (1,879 | ) | 8,911 | (1,689 | ) | |||||||||||
Income taxes | 2,681 | (1,916 | ) | 6,334 | (2,565 | ) | 4,534 | (7,421 | ) | 1,457 | (14,030 | ) | (19,994 | ) | ||||||||||
Net earnings (loss) | 3,976 | 7,140 | 1,073 | (8,081 | ) | 4,108 | (1,300 | ) | (3,336 | ) | 22,941 | 18,305 | ||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||
Basic | 0.05 | 0.09 | 0.01 | (0.10 | ) | 0.05 | (0.02 | ) | (0.04 | ) | 0.29 | 0.23 | ||||||||||||
Diluted | 0.05 | 0.09 | 0.01 | (0.10 | ) | 0.05 | (0.02 | ) | (0.04 | ) | 0.28 | 0.22 | ||||||||||||
Excluded items: | ||||||||||||||||||||||||
Purchased intangible asset amortization (cost of revenue) | 4,077 | 3,890 | 4,621 | 6,056 | 18,644 | 5,966 | 6,021 | 5,971 | 17,958 | |||||||||||||||
Non-cash stock compensation (cost of revenue and operating expenses) | 8,590 | 11,938 | 13,427 | 15,190 | 49,145 | 15,031 | 15,757 | 15,919 | 46,707 | |||||||||||||||
Restructuring and merger charges (gains, losses, and other) | 314 | 300 | 2,111 | 7,321 | 10,045 | (98 | ) | 3,660 | (41 | ) | 3,521 | |||||||||||||
Gain on sales of assets (gains, losses and other) | - | - | - | (1,671 | ) | (1,671 | ) | - | - | - | - | |||||||||||||
Separation and transformation costs (general and administrative) | - | 1,455 | 4,118 | 3,066 | 8,639 | 7,119 | 5,442 | 5,214 | 17,775 | |||||||||||||||
Total excluded items | 12,981 | 17,583 | 24,277 | 29,962 | 84,803 | 28,018 | 30,880 | 27,063 | 85,961 | |||||||||||||||
Income before income taxes and excluding items |
19,638 | 22,807 | 31,684 | 19,315 | 93,444 | 19,297 | 29,001 | 35,974 | 84,272 | |||||||||||||||
Income taxes | 7,852 | 8,910 | 12,751 | 7,139 | 36,652 | 7,720 | 11,289 | 10,704 | 29,713 | |||||||||||||||
Non-GAAP net earnings | 11,786 | 13,897 | 18,933 | 12,177 | 56,792 | 11,577 | 17,712 | 25,270 | 54,559 | |||||||||||||||
Non-GAAP earnings per share: | ||||||||||||||||||||||||
Basic | 0.15 | 0.18 | 0.24 | 0.16 | 0.73 | 0.15 | 0.22 | 0.32 | 0.69 | |||||||||||||||
Diluted | 0.15 | 0.18 | 0.24 | 0.15 | 0.71 | 0.14 | 0.22 | 0.31 | 0.67 | |||||||||||||||
Basic weighted average shares | 77,471 | 77,446 | 77,507 | 78,012 | 77,609 | 78,672 | 79,235 | 79,043 | 78,983 | |||||||||||||||
Diluted weighted average shares | 79,353 | 79,277 | 79,851 | 80,912 | 79,848 | 81,440 | 81,472 | 81,869 | 81,594 | |||||||||||||||
Some totals may not add due to rounding | ||||||||||||||||||||||||
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
ACXIOM CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
RESULTS BY SEGMENT | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Q3 FY18 to Q3 FY17 | ||||||||||||||||||||||||||||||||
06/30/16 | 09/30/16 | 12/31/16 | 03/31/17 | FY2017 | 06/30/17 | 09/30/17 | 12/31/17 | YTD FY2018 | % | $ | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Marketing Services | 109,715 | 105,679 | 101,177 | 94,269 | 410,840 | 91,594 | 94,042 | 94,457 | 280,093 | (6.6 | %) | (6,720 | ) | |||||||||||||||||||
Audience Solutions | 73,744 | 78,526 | 83,399 | 86,396 | 322,065 | 75,734 | 78,814 | 84,436 | 238,984 | 1.2 | % | 1,037 | ||||||||||||||||||||
Connectivity | 31,342 | 33,062 | 38,736 | 44,203 | 147,342 | 45,186 | 52,384 | 55,978 | 153,548 | 44.5 | % | 17,242 | ||||||||||||||||||||
Total operating segment revenues | 214,801 | 217,267 | 223,312 | 224,867 | 880,247 | 212,514 | 225,240 | 234,871 | 672,625 | 5.2 | % | 11,559 | ||||||||||||||||||||
Gross profit: | ||||||||||||||||||||||||||||||||
Marketing Services | 37,466 | 34,480 | 37,494 | 31,207 | 140,647 | 31,358 | 34,320 | 35,798 | 101,476 | (4.5 | %) | (1,696 | ) | |||||||||||||||||||
Audience Solutions | 41,912 | 47,998 | 53,120 | 55,154 | 198,185 | 47,210 | 48,321 | 52,821 | 148,352 | (0.6 | %) | (299 | ) | |||||||||||||||||||
Connectivity | 17,575 | 19,843 | 23,091 | 27,742 | 88,251 | 27,525 | 35,291 | 37,914 | 100,730 | 64.2 | % | 14,823 | ||||||||||||||||||||
Total operating segment gross profit | 96,953 | 102,321 | 113,705 | 114,104 | 427,084 | 106,093 | 117,932 | 126,533 | 350,558 | 11.3 | % | 12,828 | ||||||||||||||||||||
Gross margin %: | ||||||||||||||||||||||||||||||||
Marketing Services | 34.1 | % | 32.6 | % | 37.1 | % | 33.1 | % | 34.2 | % | 34.2 | % | 36.5 | % | 37.9 | % | 36.2 | % | ||||||||||||||
Audience Solutions | 56.8 | % | 61.1 | % | 63.7 | % | 63.8 | % | 61.5 | % | 62.3 | % | 61.3 | % | 62.6 | % | 62.1 | % | ||||||||||||||
Connectivity | 56.1 | % | 60.0 | % | 59.6 | % | 62.8 | % | 59.9 | % | 60.9 | % | 67.4 | % | 67.7 | % | 65.6 | % | ||||||||||||||
Total operating segment gross margin | 45.1 | % | 47.1 | % | 50.9 | % | 50.7 | % | 48.5 | % | 49.9 | % | 52.4 | % | 53.9 | % | 52.1 | % | ||||||||||||||
Income (loss) from operations: | ||||||||||||||||||||||||||||||||
Marketing Services | 20,145 | 19,837 | 21,127 | 19,513 | 80,622 | 19,784 | 21,874 | 22,063 | 63,721 | 4.4 | % | 936 | ||||||||||||||||||||
Audience Solutions | 25,096 | 29,972 | 34,572 | 33,598 | 123,238 | 28,542 | 29,497 | 33,112 | 91,151 | (4.2 | %) | (1,460 | ) | |||||||||||||||||||
Connectivity | 291 | 1,663 | 1,877 | 1,502 | 5,333 | (48 | ) | 5,715 | 6,808 | 12,475 | 262.8 | % | 4,932 | |||||||||||||||||||
Total operating segment income from operations | 45,532 | 51,472 | 57,576 | 54,613 | 209,193 | 48,277 | 57,086 | 61,983 | 167,347 | 7.7 | % | 4,407 | ||||||||||||||||||||
Operating income (loss) margin %: | ||||||||||||||||||||||||||||||||
Marketing Services | 18.4 | % | 18.8 | % | 20.9 | % | 20.7 | % | 19.6 | % | 21.6 | % | 23.3 | % | 23.4 | % | 22.7 | % | ||||||||||||||
Audience Solutions | 34.0 | % | 38.2 | % | 41.5 | % | 38.9 | % | 38.3 | % | 37.7 | % | 37.4 | % | 39.2 | % | 38.1 | % | ||||||||||||||
Connectivity | 0.9 | % | 5.0 | % | 4.8 | % | 3.4 | % | 3.6 | % | -0.1 | % | 10.9 | % | 12.2 | % | 8.1 | % | ||||||||||||||
Total operating segment operating margin | 21.2 | % | 23.7 | % | 25.8 | % | 24.3 | % | 23.8 | % | 22.7 | % | 25.3 | % | 26.4 | % | 24.9 | % | ||||||||||||||
Some totals may not add due to rounding. | ||||||||||||||||||||||||||||||||
ACXIOM CORPORATION AND SUBSIDIARIES | |||||||
RECONCILIATION OF GAAP TO NON-GAAP EPS GUIDANCE (1) |
|||||||
(Unaudited) | |||||||
(Dollars in thousands, except per share amounts) | |||||||
For the year ending |
|||||||
Low Range | High Range | ||||||
Income (loss) before income taxes | (3,000 | ) | 2,500 | ||||
Income taxes (benefit) | (18,500 | ) | (16,500 | ) | |||
Net earnings | 15,500 | 19,000 | |||||
Diluted earnings per share | $ | 0.19 | $ | 0.23 | |||
Excluded items: | |||||||
Purchased intangible asset amortization | 24,000 | 24,000 | |||||
Non-cash stock compensation | 65,000 | 65,000 | |||||
Gains, losses and other items, net | 4,000 | 4,000 | |||||
Separation and related costs | 20,000 | 20,000 | |||||
Total excluded items | 113,000 | 113,000 | |||||
Income before income taxes and excluding items | 110,000 | 115,500 | |||||
Income taxes (2) | 40,000 | 42,000 | |||||
Non-GAAP net earnings | 70,000 | 73,500 | |||||
Non-GAAP diluted earnings per share | $ | 0.85 | $ | 0.89 | |||
Diluted weighted average shares | 82,500 | 82,500 | |||||
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated using an effective non-GAAP tax rate of approximately 36.5%. The difference between our GAAP and Non-GAAP tax rates was due to the effect of excluded items and the benefit of remeasuring net deferred tax liabilites due to enactment of new legislation.
APPENDIX A | ||||||||||
ACXIOM CORPORATION | ||||||||||
Q3 FISCAL 2018 FINANCIAL RESULTS | ||||||||||
EXPLANATION OF NON-GAAP MEASURES | ||||||||||
To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.
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