UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
  
     
 
FORM 8-K
  
     
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
  
     
 
Date of report (Date of earliest event reported):  August 4, 2014
  
     
 
ACXIOM CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
  
     
 
DELAWARE
(State or Other Jurisdiction of Incorporation)
 
  
0-13163
71-0581897
(Commission File Number)
(IRS Employer Identification No.)
   
601 E. Third St., Little Rock, Arkansas
72201
(Address of Principal Executive Offices)
(Zip Code)
 
501-342-1000
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

 
Item 2.02                      Results of Operations and Financial Condition.

On August 4, 2014, Acxiom Corporation (the “Company”) issued a press release announcing the results of its financial performance for the first quarter of fiscal year 2015. The Company will hold a conference call at 3:30 p.m. CT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

The Company’s press release and other communications from time to time include certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

The attached press release includes non-GAAP measures of (i) income from operations and diluted earnings per share attributable to Acxiom shareholders excluding unusual items and (ii) free cash flow available to equity. Operating income excluding unusual items and diluted earnings per share attributable to Acxiom shareholders excluding unusual items  represent income from the Company’s operations less one-time expenses related to discontinued operations, gains, losses and other items, the impact of business separation and transformation expenses recorded in selling, general and administrative expense, and the impact of non-cash stock compensation recorded in both cost of revenue and selling, general and administrative expense.  The Company’s management believes that these non-GAAP measures are meaningful since they represent the recurring income from the Company’s continuing operations before one-time items, which are not a recurring part of the Company’s ordinary course operations, and before non-cash stock compensation, which is a recurring non-cash expense.  Management also believes these measures are useful in comparison to other companies who report similar measures.  The non-GAAP measures are reconciled to the corresponding GAAP measures of income from operations and diluted earnings per share attributable to Acxiom shareholders in a schedule to the press release.

Free cash flow available to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt. The Company’s management believes that this measure of free cash flow available to equity is meaningful since it represents the amount of money available for the Company’s discretionary spending after funding all required obligations including scheduled debt payments, and it therefore provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes. Free cash flow available to equity is reconciled to operating cash flow, the nearest comparable GAAP measure, in a schedule to the press release.

The non-GAAP financial measures used by the Company may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as substitutes for measures of financial performance or liquidity prepared in accordance with GAAP.

 
 
 


Item 9.01                      Financial Statements and Exhibits
 
(d)           Exhibits
 
The following exhibits are furnished herewith:
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated August 4, 2014

 
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:   August 4, 2014


ACXIOM CORPORATION


By: /s/ Jerry C. Jones                                                                
Name: Jerry C. Jones
 
Title:
Chief Ethics and Legal Officer & Executive Vice President
 
 
 
 
 

EXHIBIT INDEX
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated August 4, 2014


 
 
 
 




 
 
 
 

 

For more information, contact:
Lauren Russi
Acxiom Investor Relations
(650) 372-2242
investor.relations@acxiom.com
EACXM


ACXIOM ANNOUNCES FIRST QUARTER RESULTS
 
Maintains Guidance for the Year

LITTLE ROCK, Ark. – August 4, 2014 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its first quarter ended June 30, 2014.
 
First Quarter Financial Highlights
 
·  
Total revenue was down 6 percent compared to the first quarter of fiscal 2014 as a result of expected IT Infrastructure Management declines and European restructuring.
o  
Marketing and Data Services revenue was $187 million, slightly down compared to the first quarter of fiscal 2014.
o  
IT Infrastructure Management revenue was down, as expected, approximately 20 percent compared to the same period a year ago.
o  
Gross media spend through the Audience Operating System™ was approximately $28 million, up 87 percent compared to the fourth quarter of last year.
 
·  
GAAP operating income and diluted earnings per share were down due to one-time expenses associated with business separation and transformation activities.
o  
Net loss per diluted share from continuing operations was $0.08 compared to earnings per share of $0.17 a year ago. Unusual items and non-cash compensation expense impacted GAAP earnings per share by $0.21 in the quarter. Unusual items included expenses associated with the Company’s restructuring activities, separation and transformation initiatives, and the acquisition of LiveRamp, Inc.
o  
Operating cash flow from continuing operations was $149 million for the trailing twelve months, down 11 percent compared to the same period a year ago. Free cash flow to equity was $56 million for the trailing twelve-month period compared to $70 million for the comparable period. The decline was primarily due to cash restructuring and separation and transformation expenses and higher capital spending.
 
·  
Non-GAAP operating income and diluted earnings per share were down primarily due to the declines in the IT Infrastructure Management business.
o  
Excluding unusual items and non-cash compensation expense, diluted earnings per share were $0.13 compared to $0.19 a year ago.
o  
Excluding unusual items and non-cash compensation expense, operating income was $19 million, down from $27 million for the same period last year. The change was due to the expected declines in the IT Infrastructure Management business and, to a lesser extent, higher R&D expenses.
 
·  
The Company reiterates its full year revenue and earnings per share guidance.
 
A reconciliation between GAAP and non-GAAP results is attached to this release.
 
 
1
 
During the quarter, the Company announced its acquisition of LiveRamp, an industry leader in connecting first and third party offline data with the digital marketing ecosystem. In addition, Acxiom completed the sale of its U.K. call center business, 2Touch. As a result, 2Touch results for the current and prior years are presented as discontinued operations in the consolidated statement of operations. Revenue and expenses related to discontinued operations are netted and presented on one line, net of tax, in the statement of operations.
 
“The integration of LiveRamp is off to a great start,” said Acxiom CEO Scott Howe. “This quarter we added 7 new AOS™ clients and are in the process of introducing LiveRamp to our customer base. Exciting opportunities lie ahead as we build toward a connected ecosystem of customers, publishers and marketing applications.”
 
First Quarter Business Highlights
 
·  
The Company sold its U.K. call center operation, 2Touch, to Parseq Ltd. to increase its focus on its core Marketing and Data Services business.
 
·  
Acxiom signed several Marketing and Data Services agreements during the quarter including new database contracts with Zurich-based ACE Insurance Group and Australia-based Sevenwest Media Group, and renewals with Virgin Media and First National Bank of Omaha.
 
·  
Acxiom signed 7 new AOS agreements during the quarter with several industry-leading companies including Carrefour Media, J. Jill, a global investment management firm and a major airline.
 
·  
Subsequent to quarter end, Acxiom completed its acquisition of LiveRamp, a leading service for onboarding customer data into digital marketing applications. Together, Acxiom and LiveRamp become the industry-leading solution for bringing first and third party data online with better matching, more connectivity and faster onboarding.
 
Financial Outlook
 
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 the LiveRamp acquisition but excludes the impact of unusual items, acquisition related expenses and non-cash compensation expense. Acxiom’s estimates for fiscal 2015 are as follows:
 
·  
We continue to expect revenue from continuing operations for the fiscal year to be down roughly five percent compared to fiscal year 2014. The decline in revenue is primarily due to the impact of lost IT Infrastructure Management customers and the exit of our analog paper survey business in Europe.
 
·  
Adjusting for the 2Touch divestiture, we continue to expect earnings per diluted share to be in the range of $0.73 to $0.83.
 
Conference Call
 
Acxiom will hold a conference call at 3:30 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.
 
 
2
 
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 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 as well as statements regarding future investments, 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 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 or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2014, which was filed with the Securities and Exchange Commission on May 28, 2014.
 
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.
 
We undertake no obligation to update the information contained in this press release or any other forward-looking statement.
 
Acxiom is a registered trademark of Acxiom Corporation.
 
To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

 
3 
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                         
                         
   
For the Three Months Ended
  
   
June 30,
  
                 $       %  
   
2014
    
2013
    
Variance
    
Variance
  
                           
Revenue:
                          
    Marketing and data services
     186,683       187,793       (1,110 )     (0.6 %)
    IT Infrastructure management services
     55,532       69,385       (13,853 )     (20.0 %)
     Total revenue
     242,215       257,178       (14,963 )     (5.8 %)
                                 
Operating costs and expenses:
                                
    Cost of revenue
     192,303       196,105       (3,802 )     (1.9 %)
    Selling, general and administrative
     46,938       37,615       9,323       24.8 %
    Gains, losses and other items, net
     7,452       -       7,452       100.0 %
                                 
        Total operating costs and expenses
     246,693       233,720       12,973       5.6 %
                                 
    Income (loss) from operations
     (4,478 )     23,458       (27,936 )     (119.1 %)
     % Margin
     -1.8 %     9.1 %                
   Other income (expense):
                                
     Interest expense
     (2,571 )     (3,019 )     448       14.8 %
     Other, net
     (413 )     104       (517 )     (497.1 %)
                                 
   Total other income (expense)
     (2,984 )     (2,915 )     (69 )     (2.4 %)
                                 
   Earnings (loss) from continuing operations before income taxes
     (7,462 )     20,543       (28,005 )     (136.3 %)
                                 
   Income taxes
     (1,390 )     8,040       (9,430 )     (117.3 %)
                                 
   Net earnings (loss) from continuing operations
     (6,072 )     12,503       (18,575 )     (148.6 %)
                                 
   Earnings (loss) from discontinued operations, net of tax
     (1,532 )     592       (2,124 )     (358.8 %)
                                 
    Net earnings (loss)
     (7,604 )     13,095       (20,699 )     (158.1 %)
                                 
  Less: Net loss attributable to noncontrolling interest
     -       (85 )     85       100.0 %
                                 
  Net earnings (loss) attributable to Acxiom
     (7,604 )     13,180       (20,784 )     (157.7 %)
                                 
Basic earnings (loss) per share:
                                
   Net earnings (loss) from continuing operations
     (0.08 )     0.17       (0.25 )     (147.1 %)
   Earnings (loss) from discontinued operations
     (0.02 )     0.01       (0.03 )     (300.0 %)
      Net earnings (loss)
     (0.10 )     0.18       (0.28 )     (155.6 %)
                                 
      Net earnings (loss) attributable to Acxiom stockholders
     (0.10 )     0.18       (0.28 )     (155.6 %)
                                 
                                 
Diluted earnings (loss) per share:
                                
   Net earnings (loss) from continuing operations
     (0.08 )     0.17       (0.25 )     (147.1 %)
   Earnings (loss) from discontinued operations
     (0.02 )     0.01       (0.03 )     (300.0 %)
      Net earnings (loss)
     (0.10 )     0.17       (0.27 )     (158.8 %)
                                 
      Net earnings (loss) attributable to Acxiom stockholders
     (0.10 )     0.17       (0.27 )     (158.8 %)
                                 



 
4 
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP EPS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
             
   
For the Three Months Ended
  
   
June 30,
  
   
2014
    
2013
  
             
             
   Earnings (loss) from continuing operations before income taxes
     (7,462 )     20,543  
                 
   Income taxes
     (1,390 )     8,040  
                 
   Net earnings (loss) from continuing operations
     (6,072 )     12,503  
                 
   Earnings (loss) from discontinued operations, net of tax
     (1,532 )     592  
                 
   Net earnings (loss)
     (7,604 )     13,095  
                 
   Less: Net loss attributable to noncontrolling interest
     -       (85 )
                 
   Net earnings (loss) attributable to Acxiom
     (7,604 )     13,180  
                 
Earnings (loss) per share attributable to Acxiom stockholders:
                
                 
    Basic
     (0.10 )     0.18  
                 
    Diluted
     (0.10 )     0.17  
                 
Unusual items:
                
                 
  Live Ramp acquisition costs
     780       -  
  Non-cash stock compensation
     4,089       3,180  
  Restructuring charges and other adjustments
     6,672       -  
  Separation and transformation costs
     12,037       -  
                 
 Total unusual items, continuing operations
     23,578       3,180  
                 
   Earnings from continuing operations before income taxes
                
     and excluding unusual items
     16,116       23,723  
                 
   Income taxes
     6,204       9,252  
                 
   Non-GAAP earnings from continuing operations
     9,912       14,471  
                 
   Earnings from discontinued operations, net of tax
     -       -  
                 
   Non-GAAP net earnings
     9,912       14,471  
                 
   Less: Net loss attributable to noncontrolling interest
     -       (85 )
                 
   Non-GAAP Net earnings attributable to Acxiom
     9,912       14,556  
                 
Non-GAAP earnings per share attributable to Acxiom stockholders:
                
                 
    Basic
     0.13       0.20  
                 
    Diluted
     0.13       0.19  
                 
Diluted weighted average shares
     78,341       75,491  
                 
                 


 
5 
 

             
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
  
   
June 30,
  
   
2014
    
2013
  
             
   Income (loss) from operations
     (4,478 )     23,458  
                 
   Unusual items
     23,578       3,180  
                 
   Income from operations before unusual items
     19,100       26,638  
                 
                 

 

 
6 
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
CALCULATION OF EARNINGS PER SHARE
  
(Unaudited)
  
(In thousands, except earnings per share)
  
             
             
   
For the Three Months Ended
  
             
   
June 30,
    
June 30,
  
   
2014
    
2013
  
             
Basic earnings (loss) per share from continuing operations:
            
    Numerator - net earnings (loss)
     (6,072 )     12,503  
    Denominator - weighted-average shares outstanding
     76,833       73,679  
        Basic earnings (loss) per share
     (0.08 )     0.17  
                 
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
                
    Numerator - net earnings (loss) attributable to Acxiom
     (7,604 )     13,180  
    Denominator - weighted-average shares outstanding
     76,833       73,679  
        Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders
     (0.10 )     0.18  
                 
Diluted earnings (loss) per share from continuing operations:
                
    Numerator - net earnings (loss)
     (6,072 )     12,503  
                 
    Denominator - weighted-average shares outstanding
     76,833       73,679  
    Dilutive effect of common stock options, warrants and restricted stock
     -       1,812  
      76,833       75,491  
                 
        Diluted earnings (loss) per share from continuing operations
     (0.08 )     0.17  
                 
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
                
    Numerator - net earnings (loss) attributable to Acxiom
     (7,604 )     13,180  
                 
    Denominator - weighted-average shares outstanding
     76,833       73,679  
    Dilutive effect of common stock options, warrants, and restricted stock
     -       1,812  
      76,833       75,491  
                 
        Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders
     (0.10 )     0.17  
                 
                 



 
7 
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
             
             
   
For the Three Months Ended
  
             
   
June 30,
    
June 30,
  
Revenue:
  
2014
    
2013
  
             
Marketing and data services
     186,683       187,793  
IT Infrastructure management services
     55,532       69,385  
                 
Total revenue
     242,215       257,178  
                 
                 
Income from continuing operations:
                
                 
Marketing and data services
     10,272       12,697  
IT Infrastructure management services
     4,739       10,761  
Corporate
     (19,489 )     -  
                 
Total income (loss) from continuing operations
     (4,478 )     23,458  
                 
Margin:
                
                 
Marketing and data services
     5.5 %     6.8 %
IT Infrastructure management services
     8.5 %     15.5 %
                 
Total margin
     -1.8 %     9.1 %
                 



 
8 
 

                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
June 30,
    
March 31,
      $       %  
   
2014
    
2014
    
Variance
    
Variance
  
Assets
                          
Current assets:
                          
  Cash and cash equivalents
     392,918       418,586       (25,668 )     (6.1 %)
  Trade accounts receivable, net
     150,605       160,718       (10,113 )     (6.3 %)
  Deferred income taxes
     12,285       12,870       (585 )     (4.5 %)
  Refundable income taxes
     11,436       11,535       (99 )     (0.9 %)
  Other current assets
     51,644       54,484       (2,840 )     (5.2 %)
  Assets of discontinued operations
     1,140       7,332       (6,192 )     (84.5 %)
                                 
     Total current assets
     620,028       665,525       (45,497 )     (6.8 %)
                                 
Property and equipment
     854,544       852,236       2,308       0.3 %
  Less - accumulated depreciation and amortization
     638,222       635,330       2,892       0.5 %
                                 
Property and equipment, net
     216,322       216,906       (584 )     (0.3 %)
                                 
Software, net of accumulated amortization
     40,766       39,425       1,341       3.4 %
Goodwill
     358,671       358,384       287       0.1 %
Purchased software licenses, net of accumulated amortization
     19,079       18,584       495       2.7 %
Other assets, net
     22,607       24,477       (1,870 )     (7.6 %)
                                 
      1,277,473       1,323,301       (45,828 )     (3.5 %)
                                 
Liabilities and Stockholders' Equity
                                
Current liabilities:
                                
  Current installments of long-term debt
     31,368       28,567       2,801       9.8 %
  Trade accounts payable
     42,803       36,179       6,624       18.3 %
  Accrued payroll and related expenses
     31,010       62,182       (31,172 )     (50.1 %)
  Other accrued expenses
     67,777       70,412       (2,635 )     (3.7 %)
  Deferred revenue
     43,481       47,638       (4,157 )     (8.7 %)
  Income taxes
     -       241       (241 )     (100.0 %)
  Liabilities of discontinued operations
     1,681       4,250       (2,569 )     (60.4 %)
                                 
   Total current liabilities
     218,120       249,469       (31,349 )     (12.6 %)
                                 
Long-term debt
     278,975       289,043       (10,068 )     (3.5 %)
                                 
Deferred income taxes
     88,480       90,226       (1,746 )     (1.9 %)
                                 
Other liabilities
     12,464       11,706       758       6.5 %
                                 
  Stockholders' equity:
                                
  Common stock
     12,644       12,584       60       0.5 %
  Additional paid-in capital
     988,607       981,985       6,622       0.7 %
  Retained earnings
     595,225       602,829       (7,604 )     (1.3 %)
  Accumulated other comprehensive income
     14,428       13,662       766       5.6 %
  Treasury stock, at cost
     (931,470 )     (928,203 )     (3,267 )     (0.4 %)
Total stockholders' equity
     679,434       682,857       (3,423 )     (0.5 %)
                                 
      1,277,473       1,323,301       (45,828 )     (3.5 %)
                                 

 


 
9 
 

             
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Unaudited)
  
(Dollars in thousands)
  
             
   
For the Three Months Ended
  
             
   
June 30,
  
             
   
2014
    
2013
  
             
Cash flows from operating activities:
            
  Net earnings (loss)
     (7,604 )     13,095  
  Loss (earnings) from discontinued operations, net of tax
     1,532       (592 )
  Non-cash operating activities:
                
    Depreciation and amortization
     27,524       25,048  
    Deferred income taxes
     (1,843 )     (588 )
    Non-cash stock compensation expense
     4,089       3,181  
    Changes in operating assets and liabilities:
                
      Accounts receivable
     12,482       2,216  
      Other assets
     2,736       743  
      Deferred costs
     (1,383 )     -  
      Accounts payable and other liabilities
     (29,022 )     (27,826 )
      Deferred revenue
     (6,644 )     1,231  
      Net cash provided by operating activities
     1,867       16,508  
Cash flows from investing activities:
                
    Capitalized software
     (4,969 )     (5,954 )
    Capital expenditures
     (19,001 )     (8,912 )
    Data acquisition costs
     (635 )     (1,961 )
      Net cash provided (used) by investing activities
     (24,605 )     (16,827 )
Cash flows from financing activities:
                
    Payments of debt
     (5,502 )     (4,890 )
    Sale of common stock, net of stock acquired for withholding taxes
     (674 )     5,755  
    Acquisition of treasury stock
     -       (16,139 )
      Net cash used by financing activities
     (6,176 )     (15,274 )
Cash flows from discontinued operations:
                
    From operating activities
     (13 )     341  
    From investing activities
     2,927       (8 )
      Net cash provided by discontinued operations
     2,914       333  
      Effect of exchange rate changes on cash
     332       (84 )
                 
  Net change in cash and cash equivalents
     (25,668 )     (15,344 )
  Cash and cash equivalents at beginning of period
     418,586       222,974  
  Cash and cash equivalents at end of period
     392,918       207,630  
                 
   Supplemental cash flow information:
                
    Cash paid during the period for:
                
      Interest
     2,875       3,011  
      Income taxes
     297       1,084  
      Payments on capital leases and installment payment arrangements
     1,235       2,900  
      Other debt payments, excluding line of credit
     4,267       1,990  
                 
                 



 
10 
 

                                                 
ACXIOM CORPORATION AND SUBSIDIARIES
              
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
              
AND RECONCILIATION TO OPERATING CASH FLOW
              
(Unaudited)
              
(Dollars in thousands)
              
                                                 
                                                 
   
06/30/13
    
09/30/13
    
12/31/13
    
03/31/14
    
YTD FY2014
    
06/30/14
    
TTM 6/30/13
    
TTM 6/30/14
  
                                                 
Net cash provided by operating activities - continuing operations
     16,508       42,255       63,791       40,687       163,241       1,867       166,312       148,600  
Net cash provided by operating activities - discontinued operations
     341       (1,734 )     (19 )     3,147       1,735       (13 )     2,536       1,381  
                                                                 
Less:
                                                                
    Payments for investments
     -       -       3,633       190       3,823       -       -       3,823  
    Capitalized software
     (5,954 )     (7,660 )     (5,495 )     (5,408 )     (24,517 )     (4,969 )     (22,160 )     (23,532 )
    Capital expenditures
     (8,912 )     (9,130 )     (6,681 )     (14,409 )     (39,132 )     (19,001 )     (43,565 )     (49,221 )
    Data acquisition costs
     (1,961 )     (913 )     (1,786 )     (3,085 )     (7,745 )     (635 )     (8,229 )     (6,419 )
    Discontinued operations investing activities
     (8 )     (139 )     (19 )     -       (166 )     2,927       (308 )     2,769  
    Payments on capital leases and installment payment arrangements
     (2,900 )     (2,339 )     (1,675 )     (1,465 )     (8,379 )     (1,235 )     (14,852 )     (6,714 )
    Other required debt payments
     (1,990 )     (2,004 )     (4,259 )     (4,263 )     (12,516 )     (4,267 )     (10,053 )     (14,793 )
                                                                 
Total
     (4,876 )     18,336       47,490       15,394       76,344       (25,326 )     69,681       55,894  
                                                                 
                                                                 
                                                                 



 
11 
 

                                                 
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except earnings per share)
  
                                                 
                                       
Q1 FY15 to Q1 FY14
  
   
06/30/13
    
09/30/13
    
12/31/13
    
03/31/14
    
YTD FY2014
    
06/30/14
    
%
       $  
Revenue:
                                                  
Marketing and data services
     187,793       200,952       206,662       209,746       805,153       186,683       -0.6 %     (1,110 )
IT Infrastructure management services
     69,385       66,825       62,099       58,816       257,125       55,532       -20.0 %     (13,853 )
  Total revenue
     257,178       267,777       268,761       268,562       1,062,278       242,215       -5.8 %     (14,963 )
                                                                 
Operating costs and expenses:
                                                                
Cost of revenue
     196,105       199,107       201,430       198,920       795,562       192,303       -1.9 %     (3,802 )
Selling, general and administrative
     37,615       42,859       43,383       45,519       169,376       46,938       24.8 %     9,323  
Impairment of goodwill and other
     -       -       -       24,953       24,953       -       0.0 %     -  
Gains, losses and other items, net
     -       6,584       4,657       10,673       21,914       7,452       100.0 %     7,452  
                                                                 
     Total operating costs and expenses
     233,720       248,550       249,470       280,065       1,011,805       246,693       5.6 %     12,973  
                                                                 
Income (loss) from operations
     23,458       19,227       19,291       (11,503 )     50,473       (4,478 )     -119.1 %     (27,936 )
  % Margin
     9.1 %     7.2 %     7.2 %     -4.3 %     4.8 %     -1.8 %                
Other expense
                                                                
  Interest expense
     (3,019 )     (2,980 )     (3,114 )     (2,558 )     (11,671 )     (2,571 )     -14.8 %     448  
  Other, net
     104       (350 )     1,484       579       1,817       (413 )     -497.1 %     (517 )
Total other expense
     (2,915 )     (3,330 )     (1,630 )     (1,979 )     (9,854 )     (2,984 )     -3.5 %     (69 )
                                                                 
Earnings (loss) from continuing operations before income taxes
     20,543       15,897       17,661       (13,482 )     40,619       (7,462 )     -136.3 %     (28,005 )
Income taxes
     8,040       6,459       3,083       12,045       29,627       (1,390 )     -117.3 %     (9,430 )
                                                                 
Net earnings (loss) from continuing operations
     12,503       9,438       14,578       (25,527 )     10,992       (6,072 )     -148.6 %     (18,575 )
                                                                 
Earnings (loss) from discontinued operations, net of tax
     592       426       489       (3,696 )     (2,189 )     (1,532 )     -358.8 %     (2,124 )
                                                                 
Net earnings (loss)
     13,095       9,864       15,067       (29,223 )     8,803       (7,604 )     -158.1 %     (20,699 )
                                                                 
Less: Net gain (loss) attributable
                                                                
         to noncontrolling interest
     (85 )     25       -       -       (60 )     -       -100.0 %     85  
                                                                 
Net earnings (loss) attributable to Acxiom
     13,180       9,839       15,067       (29,223 )     8,863       (7,604 )     -157.7 %     (20,784 )
                                                                 
Diluted earnings (loss) per share - net earnings (loss) attributable
                                                          
to Acxiom stockholders
     0.17       0.13       0.19       (0.38 )     0.12       (0.10 )     -158.8 %     (0.27 )
                                                                 
                                                                 



 
12 
 

ACXIOM CORPORATION AND SUBSIDIARIES
        
                      RESULTS BY SEGMENT
                    
                      (Unaudited)
                    
                      (Dollars in thousands)
                    
                                       
Q1 FY15 to Q1 FY14
        
   
06/30/13
    
09/30/13
    
12/31/13
    
03/31/14
    
YTD FY2014
    
06/30/14
    
%
      $          
                                                         
Revenue:
                                                        
                                                         
Marketing and data services
     187,793       200,952       206,662       209,746       805,153       186,683       -1 %     (1,110 )        
IT Infrastructure management services
     69,385       66,825       62,099       58,816       257,125       55,532       -20 %     (13,853 )        
                                                                         
Total revenue
     257,178       267,777       268,761       268,562       1,062,278       242,215       -6 %     (14,963 )        
                                                                         
Income from continuing operations:
                                                                        
                                                                         
Marketing and data services
     12,697       16,030       22,529       27,244       78,500       10,272       -19 %     (2,425 )        
IT Infrastructure management services
     10,761       11,967       6,316       3,803       32,847       4,739       -56 %     (6,022 )        
Corporate
     -       (8,770 )     (9,554 )     (42,550 )     (60,874 )     (19,489 )     -100 %     (19,489 )        
                                                                         
Total income (loss) from continuing operations
     23,458       19,227       19,291       (11,503 )     50,473       (4,478 )     -119 %     (27,936 )        
                                                                         
Margin:
                                                                        
                                                                         
Marketing and data services
     6.8 %     8.0 %     10.9 %     13.0 %     9.7 %     5.5 %                        
IT Infrastructure management services
     15.5 %     17.9 %     10.2 %     6.5 %     12.8 %     8.5 %                        
                                                                         
Total
     9.1 %     7.2 %     7.2 %     -4.3 %     4.8 %     -1.8 %                        
                                                                         

 

 
13 
 
 


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