Acxiom Announces Fourth Quarter and Fiscal Year Results

Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its fourth quarter and fiscal year ended March 31, 2016.

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Fourth Quarter Financial Highlights

  • Revenue: Total revenue was $225 million, up 9% compared to the fourth quarter of last year driven by growth in each segment. Excluding an unfavorable currency impact of approximately $1 million, revenue was up 10%. US revenue of $205 million was up 11% year-over-year. International revenue of $20 million increased 2% on a constant currency basis.
  • Operating Income (Loss): GAAP operating loss from continuing operations improved to $8 million compared to a loss of $11 million in the prior year. Non-GAAP operating income from continuing operations declined 7% to approximately $20 million.
  • Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.02 compared to a loss per share of $0.12 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.18, up from $0.17 a year ago.
  • Operating Cash Flow: Operating cash flow from continuing operations was $43 million, up 47% from $29 million last year.
  • Free Cash Flow to Equity: Free cash flow to equity was $17 million, up from $2 million in the prior year.

Fiscal Year Financial Highlights

  • Revenue: Total revenue was $850 million, up 6% compared to fiscal 2015. Excluding an unfavorable currency impact of approximately $8 million, revenue was up 7%. US revenue of $770 million increased 9% year-over-year. International revenue of $80 million was down 8% on a constant currency basis. Connectivity revenue of $102 million increased 86% year-over-year.
  • Operating Income (Loss): GAAP operating loss from continuing operations improved to $13 million compared to a loss of $33 million in the prior year. Non-GAAP operating income from continuing operations improved 16% to approximately $76 million.
  • Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.11 compared to a loss per share of $0.34 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.59, up from $0.49 a year ago.

Fourth Quarter Segment Results

Marketing Services

  • Revenue was $113 million, up 3% compared to the fourth quarter of last year. US revenue of $104 million was up 4% year-over-year.
  • Gross margin improved from 33% to 35%.
  • Operating income was $19 million, up 7% compared to the prior year.

Audience Solutions

  • Revenue was $80 million, up 4% compared to the prior year period. US revenue of $71 million was up 6% year-over-year.
  • Gross margin improved from 55% to 58%.
  • Operating income was $30 million, down 3% compared to the prior year.

Connectivity

  • Revenue was $31 million, up 62% compared to the fourth quarter of last year. Connectivity exited the quarter with an $110 million annualized revenue run-rate.
  • Gross margin improved from 43% to 63%.
  • Operating loss improved by $6 million to nearly break-even.

A detailed discussion of our non-GAAP financial measures is included at the bottom of this release, and a reconciliation between GAAP and non-GAAP results is attached.

"Our strong fourth quarter performance capped off a year of solid execution across each of our businesses," said Acxiom CEO Scott Howe. "In fiscal 2016, we extended our leadership in data connectivity with the launch of LiveRamp Customer Link™ and expansion of data onboarding to the UK and France. At the same time, Marketing Services and Audience Solutions had a number of key customer and partner wins. We enter fiscal 2017 from a position of strength, propelled by our recent progress and momentum."

Recent Business Highlights

  • LiveRamp™ launched its data onboarding service in the United Kingdom and France to meet rapidly growing demand from clients and partners. Global and local brands can now use LiveRamp to activate offline first and third-party data across their marketing stack.
  • Connectivity added more than 15 new customers during the quarter and added over 40 new partner integrations. Marketers can now onboard and activate their data across a growing network of more than 300 marketing platforms and data providers.
  • Marketing Services announced the Acxiom Marketing Analytics Environment™, a privacy-safe, closed-loop marketing analytics solution that allows clients to quickly leverage the power of data science and analytics to drive improved customer experiences and higher return on investment.
  • Acxiom was awarded the prestigious Innovation Partner Award by Citigroup Inc. in recognition of its high level of service and performance. Acxiom was among five companies recognized at this year’s Citi Supplier Awards event.
  • Debora Beachner Tomlin was named to the Acxiom Board of Directors. Ms. Tomlin is a proven and respected marketing executive with a deep understanding of the value of data-driven marketing. She currently serves as chief marketing and distribution officer for CSAA Insurance Group. Prior to CSAA, Ms. Tomlin held several senior leadership positions at Capital One Bank.
  • Acxiom repurchased 731,000 shares for approximately $15 million during the quarter. Since inception of the share repurchase program in August 2011, Acxiom has repurchased 15.5 million shares for $255 million.

Financial Outlook

Acxiom’s guidance excludes the impact of non-cash compensation, purchased intangible asset amortization, restructuring charges and separation and transformation costs.

For fiscal 2017, Acxiom expects to report:

  • Revenue in the range of $870 million to $890 million
  • Non-GAAP diluted earnings per share in the range of $0.55 to slightly higher

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 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 45 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.

Non-GAAP Financial Measures

The Company’s press release includes (i) non-GAAP earnings from operations and non-GAAP earnings per share, both excluding items, and (ii) free cash flow available to equity, which is also a non-GAAP measure. Non-GAAP earnings from operations and non-GAAP earnings per share excluding items represent loss from the Company’s continuing operations less expenses related to gains, losses and other items, impairment of goodwill and other assets, separation and transformation expenses recorded in general and administrative expense, purchased intangible asset and accelerated software amortization recorded in cost of revenue, non-cash stock compensation recorded in both cost of revenue and operating expenses, and accelerated amortization recorded in cost of revenue. 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 excluded unusual items, which are not indicative of the Company’s ordinary course of operations, and before purchased intangible asset amortization and non-cash stock compensation, which are recurring non-cash expenses. 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 (loss) from operations and earnings (loss) per share in schedules 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, and excluding the impact of discontinued operations. 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 from continuing operations 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 attached to the press release.

Adjusted EBITDA is defined as net income or loss from continuing operations before other expense, income taxes, depreciation and amortization, equity in net income of affiliates, restructuring charges, goodwill and intangible asset impairment charges, stock-based compensation expense, gains, losses and other items, impairment of goodwill and other assets, separation and transformation expenses recorded in general and administrative expense, purchased intangible asset and accelerated software amortization recorded in cost of revenue, non-cash stock compensation recorded in both cost of revenue and operating expenses, and accelerated amortization recorded in cost of revenue. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. The Company believes that its inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company’s performance and trends. Adjusted EBITDA is reconciled to Net loss from continuing operations, the nearest comparable GAAP measure, in a schedule attached 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.

Forward-Looking Statements

This release and today’s conference call contains 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 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, 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 earnings (loss) per share)
For the Three Months Ended
March 31,
2016 2015 $
Variance
%
Variance
Revenues 224,655 205,734 18,921 9.2 %
Cost of revenue 123,626 127,708 (4,082 ) (3.2 %)
Gross profit 101,029 78,026 23,003 29.5 %
% Gross margin45.0%37.9%
Operating expenses:
Research and development 16,758 19,080 (2,322 ) (12.2 %)
Sales and marketing 45,842 31,084 14,758 47.5 %
General and administrative 35,330 27,469 7,861 28.6 %
Impairment of goodwill and other 6,100 - 6,100 -
Gains, losses and other items, net 4,763 11,258 (6,495 ) (57.7 %)
Total operating expenses 108,793 88,891 19,902 22.4 %
Loss from operations (7,764 ) (10,865 ) 3,101 28.5 %
% Margin-3.5%-5.3%
Other expense:
Interest expense (1,880 ) (1,898 ) 18 0.9 %
Other, net (214 ) (757 ) 543 71.7 %
Total other expense (2,094 ) (2,655 ) 561 21.1 %
Loss from continuing operations before income taxes (9,858 ) (13,520 ) 3,662 27.1 %
Income taxes (8,176 ) (4,483 ) (3,693 ) (82.4 %)
Net loss from continuing operations (1,682 ) (9,037 ) 7,355 81.4 %
Earnings from discontinued operations, net of tax 111 2,998 (2,887 ) (96.3 %)
Net loss (1,571 ) (6,039 ) 4,468 74.0 %
Basic earnings (loss) per share:
Continuing operations (0.02 ) (0.12 ) 0.09 81.2 %
Discontinued operations 0.00 0.04 (0.04 ) (96.3 %)
Net loss (0.02 ) (0.08 ) 0.06 73.8 %
Diluted earnings (loss) per share:
Continuing operations (0.02 ) (0.12 ) 0.09 81.2 %
Discontinued operations 0.00 0.04 (0.04 ) (96.3 %)
Net loss (0.02 ) (0.08 ) 0.06 73.8 %
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
For the Twelve Months Ended
March 31,
2016 2015 $
Variance
%
Variance
Revenues 850,088 804,911 45,177 5.6 %
Cost of revenue 488,382 494,037 (5,655 ) (1.1 %)
Gross profit 361,706 310,874 50,832 16.4 %
% Gross margin42.5%38.6%
Operating expenses:
Research and development 74,247 74,201 46 0.1 %
Sales and marketing 146,176 116,494 29,682 25.5 %
General and administrative 135,385 130,263 5,122 3.9 %
Impairment of goodwill and other 6,829 - 6,829 -
Gains, losses and other items, net 12,132 22,600 (10,468 ) (46.3 %)
Total operating expenses 374,769 343,558 31,211 9.1 %
Loss from operations (13,063 ) (32,684 ) 19,621 60.0 %
% Margin-1.5%-4.1%
Other income (expense):
Interest expense (7,669 ) (7,672 ) 3 0.0 %
Other, net 452 (991 ) 1,443 145.6 %
Total other expense (7,217 ) (8,663 ) 1,446 16.7 %
Loss from continuing operations before income taxes (20,280 ) (41,347 ) 21,067 51.0 %
Income taxes (11,632 ) (14,805 ) 3,173 21.4 %
Net loss from continuing operations (8,648 ) (26,542 ) 17,894 67.4 %
Earnings from discontinued operations, net of tax 15,351 15,511 (160 ) (1.0 %)
Net earnings (loss) 6,703 (11,031 ) 17,734 160.8 %
Basic earnings (loss) per share:
Continuing operations (0.11 ) (0.34 ) 0.23 67.6 %
Discontinued operations 0.20 0.20 (0.00 ) (1.7 %)
Net earnings (loss) 0.09 (0.14 ) 0.23 160.4 %
Diluted earnings (loss) per share:
Continuing operations (0.11 ) (0.34 ) 0.23 67.6 %
Discontinued operations 0.20 0.20 (0.00 ) (1.7 %)
Net earnings (loss) 0.09 (0.14 ) 0.23 160.4 %
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
March 31,
For the Twelve Months Ended
March 31,
2016 2015 2016 2015
Loss from continuing operations before income taxes (9,858 ) (13,520 ) (20,280 ) (41,347 )
Income taxes (8,176 ) (4,483 ) (11,632 ) (14,805 )
Net loss from continuing operations (1,682 ) (9,037 ) (8,648 ) (26,542 )
Earnings from discontinued operations, net of tax 111 2,998 15,351 15,511
Net earnings (loss) (1,571 ) (6,039 ) 6,703 (11,031 )
Earnings (loss) per share:
Basic (0.02 ) (0.08 ) 0.09 (0.14 )
Diluted (0.02 ) (0.08 ) 0.09 (0.14 )
Excluded items:
Purchased intangible asset amortization (cost of revenue) 4,204 3,781 15,466 11,454
Non-cash stock compensation (cost of revenue and operating expenses) 7,934 8,216 31,463 28,316
Impairment of goodwill and other 6,100 - 6,829 -
Restructuring charges and other adjustments (gains, losses, and other) 4,763 11,258 12,132 22,600
Separation and transformation costs (general and administrative) 4,686 5,023 20,826 31,269
Accelerated amortization (cost of revenue) 252 4,316 1,850 4,316
Total excluded items, continuing operations 27,939 32,594 88,566 97,955

Earnings from continuing operations before income taxes and excluding items

18,081 19,074 68,286 56,608
Income taxes 4,262 5,324 21,456 18,353
Non-GAAP net earnings 13,819 13,750 46,830 38,255
Non-GAAP earnings per share:
Basic 0.18 0.18 0.60 0.50
Diluted 0.18 0.17 0.59 0.49
Basic weighted average shares 76,753 77,427 77,616 77,106
Diluted weighted average shares 78,386 79,027 79,099 78,494
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
For the Three Months Ended
March 31,
2016
March 31,
2015
Basic loss per share from continuing operations:
Numerator - net loss (1,682 ) (9,037 )
Denominator - weighted-average shares outstanding 76,753 77,427
Basic loss per share (0.02 ) (0.12 )
Diluted loss per share from continuing operations:
Numerator - net loss (1,682 ) (9,037 )
Denominator - weighted-average shares outstanding 76,753 77,427
Diluted loss per share (0.02 ) (0.12 )
Basic earnings per share from discontinued operations:
Numerator - net earnings 111 2,998
Denominator - weighted-average shares outstanding 76,753 77,427
Basic earnings per share 0.00 0.04
Diluted earnings per share from discontinued operations:
Numerator - net earnings 111 2,998
Denominator - weighted-average shares outstanding 76,753 77,427
Diluted earnings per share 0.00 0.04
Basic loss per share:
Numerator - net loss (1,571 ) (6,039 )
Denominator - weighted-average shares outstanding 76,753 77,427
Basic loss per share (0.02 ) (0.08 )
Diluted loss per share:
Numerator - net loss (1,571 ) (6,039 )
Denominator - weighted-average shares outstanding 76,753 77,427
Diluted loss per share (0.02 ) (0.08 )
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
For the Twelve Months Ended
March 31,
2016
March 31,
2015
Basic loss per share from continuing operations:
Numerator - net loss (8,648 ) (26,542 )
Denominator - weighted-average shares outstanding 77,616 77,106
Basic loss per share (0.11 ) (0.34 )
Diluted loss per share from continuing operations:
Numerator - net loss (8,648 ) (26,542 )
Denominator - weighted-average shares outstanding 77,616 77,106
Diluted loss per share (0.11 ) (0.34 )
Basic earnings per share from discontinued operations:
Numerator - net earnings 15,351 15,511
Denominator - weighted-average shares outstanding 77,616 77,106
Basic earnings per share 0.20 0.20
Diluted earnings per share from discontinued operations:
Numerator - net earnings 15,351 15,511
Denominator - weighted-average shares outstanding 77,616 77,106
Diluted earnings per share 0.20 0.20
Basic loss per share:
Numerator - net earnings (loss) 6,703 (11,031 )
Denominator - weighted-average shares outstanding 77,616 77,106
Diluted earnings (loss) per share 0.09 (0.14 )
Diluted loss per share:
Numerator - net earnings (loss) 6,703 (11,031 )
Denominator - weighted-average shares outstanding 77,616 77,106
Diluted earnings (loss) per share 0.09 (0.14 )
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
March 31,
2016 2015 $
Variance
%
Variance
Revenues
Marketing Services 113,342 109,662 3,680 3.4 %
Audience Solutions 80,128 76,816 3,312 4.3 %
Connectivity 31,185 19,256 11,929 61.9 %
Total operating segment revenues 224,655 205,734 18,921 9.2 %
Gross profit
Marketing Services 40,117 36,120 3,997 11.1 %
Audience Solutions 46,457 42,141 4,316 10.2 %
Connectivity 19,617 8,234 11,383 138.2 %
Total operating segment gross profit 106,191 86,495 19,696 22.8 %
Gross profit margin %
Marketing Services 35.4 % 32.9 %
Audience Solutions 58.0 % 54.9 %
Connectivity 62.9 % 42.8 %
Total operating segment gross margin 47.3 % 42.0 %
Income (loss) from operations
Marketing Services 19,301 17,984 1,317 7.3 %
Audience Solutions 29,598 30,594 (996 ) (3.3 %)
Connectivity (424 ) (6,026 ) 5,602 93.0 %
Total operating segment income from operations 48,475 42,552 5,923 13.9 %
Operating income (loss) margin %
Marketing Services 17.0 % 16.4 %
Audience Solutions 36.9 % 39.8 %
Connectivity (1.4 %) (31.3 %)
Total operating segment operating margin 21.6 % 20.7 %
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
For the Twelve Months Ended
March 31,
$ %
2016 2015 Variance Variance
Revenues
Marketing Services 449,772 446,103 3,669 0.8 %
Audience Solutions 297,846 303,836 (5,990 ) (2.0 %)
Connectivity 102,470 54,972 47,498 86.4 %

Total operating segment revenues

850,088 804,911 45,177 5.6 %
Gross profit
Marketing Services 152,258 156,395 (4,137 ) (2.6 %)
Audience Solutions 167,715 158,386 9,329 5.9 %
Connectivity 61,199 13,322 47,877 359.4 %
Total operating segment gross profit 381,172 328,103 53,069 16.2 %
Gross profit margin %
Marketing Services 33.9 % 35.1 %
Audience Solutions 56.3 % 52.1 %
Connectivity 59.7 % 24.2 %

Total operating segment gross margin

44.8 % 40.8 %
Income (loss) from operations
Marketing Services 74,371 81,247 (6,876 ) (8.5 %)
Audience Solutions 109,598 115,078 (5,480 ) (4.8 %)
Connectivity (3,298 ) (40,069 ) 36,771 91.8 %
Total operating segment income from operations 180,671 156,256 24,415 15.6 %
Operating income (loss) margin %
Marketing Services 16.5 % 18.2 %
Audience Solutions 36.8 % 37.9 %
Connectivity (3.2 %) (72.9 %)

Total operating segment operating margin

21.3 % 19.4 %
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2016 2015 2016 2015
Total operating segment gross profit 106,191 86,495 381,172 328,103
Less:
Purchased intangible asset amortization 4,204 3,781 15,466 11,454
Non-cash stock compensation 706 372 2,150 1,459
Accelerated amortization 252 4,316 1,850 4,316
Gross profit 101,029 78,026 361,706 310,874
Total operating segment income from operations 48,475 42,552 180,671 156,256
Less:
Corporate expenses 28,300 20,823 105,168 90,985
Purchased intangible asset amortization 4,204 3,781 15,466 11,454
Non-cash stock compensation 7,934 8,216 31,463 28,316
Impairment of goodwill and other 6,100 - 6,829 -
Restructuring charges and other adjustments 4,763 11,258 12,132 22,600
Separation and transformation costs 4,686 5,023 20,826 31,269
Accelerated amortization 252 4,316 1,850 4,316
Loss from operations (7,764 ) (10,865 ) (13,063 ) (32,684 )
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
March 31, March 31, $ %
2016 2015 Variance Variance

Assets

Current assets:
Cash and cash equivalents 189,629 141,010 48,619 34.5 %
Trade accounts receivable, net 138,650 126,896 11,754 9.3 %
Refundable income taxes 9,834 5,239 4,595 87.7 %
Restricted cash held in escrow - 31,000 (31,000 ) (100.0 %)
Other current assets 37,897 34,975 2,922 8.4 %
Assets of discontinued operations - 172,284 (172,284 ) (100.0 %)
Total current assets 376,010 511,404 (135,394 ) (26.5 %)
Property and equipment 528,675 505,721 22,954 4.5 %
Less - accumulated depreciation and amortization 345,632 329,467 16,165 4.9 %
Property and equipment, net 183,043 176,254 6,789 3.9 %
Software, net of accumulated amortization 55,735 68,962 (13,227 ) (19.2 %)
Goodwill 492,745 497,362 (4,617 ) (0.9 %)
Purchased software licenses, net of accumulated amortization 10,116 9,551 565 5.9 %
Deferred income taxes 6,885 381 6,504 1707.1 %
Other assets, net 25,315 30,173 (4,858 ) (16.1 %)
1,149,849 1,294,087 (144,238 ) (11.1 %)

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 32,243 32,232 11 0.0 %
Trade accounts payable 37,717 30,094 7,623 25.3 %
Accrued payroll and related expenses 61,309 36,659 24,650 67.2 %
Other accrued expenses 48,254 62,754 (14,500 ) (23.1 %)
Acquisition escrow payable - 31,000 (31,000 ) (100.0 %)
Deferred revenue 44,477 33,620 10,857 32.3 %
Liabilities of discontinued operations - 57,433 (57,433 ) (100.0 %)
Total current liabilities 224,000 283,792 (59,792 ) (21.1 %)
Long-term debt 157,897 244,753 (86,856 ) (35.5 %)
Deferred income taxes 53,964 55,440 (1,476 ) (2.7 %)
Other liabilities 15,020 6,845 8,175 119.4 %
Stockholders' equity:
Common stock 13,039 12,794 245 1.9 %
Additional paid-in capital 1,082,220 1,034,526 47,694 4.6 %
Retained earnings 598,501 591,798 6,703 1.1 %
Accumulated other comprehensive income 8,590 9,413 (823 ) (8.7 %)
Treasury stock, at cost (1,003,382 ) (945,274 ) (58,108 ) (6.1 %)
Total stockholders' equity 698,968 703,257 (4,289 ) (0.6 %)
1,149,849 1,294,087 (144,238 ) (11.1 %)
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
March 31,
2016 2015
Cash flows from operating activities:
Net loss (1,571 ) (6,039 )
Earnings from discontinued operations, net of tax (111 ) (2,998 )
Non-cash operating activities:
Depreciation and amortization 22,242 25,760
Loss on disposal or impairment of assets - 1,975
Impairment of goodwill and other 6,100 -
Deferred income taxes (4,266 ) (2,945 )
Non-cash stock compensation expense 7,934 8,216
Changes in operating assets and liabilities:
Accounts receivable 2,224 (5,829 )
Other assets (13,531 ) 11,774
Accounts payable and other liabilities 22,370 (1,450 )
Deferred revenue 1,879 908
Net cash provided by operating activities 43,270 29,372
Cash flows from investing activities:
Capitalized software (4,520 ) (3,602 )
Capital expenditures (13,601 ) (14,600 )
Data acquisition costs (418 ) (374 )
Net cash used in investing activities (18,539 ) (18,576 )
Cash flows from financing activities:
Payments of debt (8,048 ) (8,347 )
Sale of common stock, net of stock acquired for withholding taxes 4,074 5,846
Excess tax benefits from share-based compensation 1,529 4,645
Acquisition of treasury stock (15,229 ) -
Net cash used in financing activities (17,674 ) 2,144
Cash flows from discontinued operations:
From operating activities (3,954 ) 5,080
From investing activities - (3,004 )
From financing activities - (259 )
Net cash provided by (used in) discontinued operations (3,954 ) 1,817
Effect of exchange rate changes on cash 136 (638 )
Net change in cash and cash equivalents 3,239 14,119
Cash and cash equivalents at beginning of period 186,390 126,891
Cash and cash equivalents at end of period 189,629 141,010
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 1,925 2,473
Income taxes 96 (4,383 )
Payments on capital leases and installment payment arrangements - 574
Other debt payments, excluding line of credit 8,048 8,032
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Twelve Months Ended
March 31,
2016 2015
Cash flows from operating activities:
Net earnings (loss) 6,703 (11,031 )
Earnings from discontinued operations, net of tax (15,351 ) (15,511 )
Non-cash operating activities:
Depreciation and amortization 85,463 80,447
Loss on disposal or impairment of assets 232 1,700
Impairment of goodwill and other 6,829 -
Deferred income taxes (9,122 ) (4,965 )
Non-cash stock compensation expense 31,463 28,316
Changes in operating assets and liabilities:
Accounts receivable (13,014 ) 3,744
Other assets (16,174 ) 12,867
Accounts payable and other liabilities 25,529 (28,129 )
Deferred revenue 11,084 (6,307 )
Net cash provided by operating activities 113,642 61,131
Cash flows from investing activities:
Capitalized software (14,880 ) (18,587 )
Capital expenditures (47,423 ) (56,952 )
Data acquisition costs (1,553 ) (1,871 )
Net cash paid in acquisitions (5,386 ) (265,672 )
Net cash used in investing activities (69,242 ) (343,082 )
Cash flows from financing activities:
Payments of debt (87,231 ) (26,601 )
Sale of common stock, net of stock acquired for withholding taxes 10,417 5,039
Excess tax benefits from share-based compensation 3,551 4,645
Acquisition of treasury stock (52,764 ) (9,868 )
Net cash used in financing activities (126,027 ) (26,785 )
Cash flows from discontinued operations:
From operating activities 6,323 43,853
From investing activities 124,506 (9,254 )
From financing activities (206 ) (1,820 )
Net cash provided by discontinued operations 130,623 32,779
Effect of exchange rate changes on cash (377 ) (1,619 )
Net change in cash and cash equivalents 48,619 (277,576 )
Cash and cash equivalents at beginning of period 141,010 418,586
Cash and cash equivalents at end of period 189,629 141,010
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest 8,145 8,673
Income taxes 6,100 (3,845 )
Payments on capital leases and installment payment arrangements 269 3,823
Other debt payments, excluding line of credit 32,168 24,598
Prepayment of debt 55,000 -
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 06/30/15 09/30/15 12/31/15 03/31/16 YTD FY2016
Net cash provided by operating activities - continuing operations (15,456 ) 14,325 32,890 29,372 61,131 11,997 21,357 37,018 43,270 113,642
Less:
Capitalized software (4,969 ) (5,608 ) (4,408 ) (3,602 ) (18,587 ) (2,797 ) (3,936 ) (3,627 ) (4,520 ) (14,880 )
Capital expenditures (16,778 ) (15,362 ) (10,212 ) (14,600 ) (56,952 ) (12,876 ) (10,244 ) (10,702 ) (13,601 ) (47,423 )
Data acquisition costs (635 ) (468 ) (394 ) (374 ) (1,871 ) (430 ) (281 ) (424 ) (418 ) (1,553 )
Payments on capital leases and installment payment arrangements (650 ) (567 ) (471 ) (315 ) (2,003 ) (63 ) - - - (63 )
Other required debt payments (4,267 ) (4,272 ) (8,027 ) (8,032 ) (24,598 ) (8,036 ) (8,039 ) (8,045 ) (8,048 ) (32,168 )
Total (42,755 ) (11,952 ) 9,378 2,449 (42,880 ) (12,205 ) (1,143 ) 14,220 16,683 17,555
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
Q4 FY16 to Q4 FY15
06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 06/30/15 09/30/15 12/31/15 03/31/16 YTD FY2016 % $
Revenues 186,683 204,248 208,246 205,734 804,911 196,895 207,345 221,193 224,655 850,088 9.2 % 18,921
Cost of revenue 115,564 124,958 125,807 127,708 494,037 117,709 121,312 125,735 123,626 488,382 -3.2 % (4,082 )
Gross profit 71,119 79,290 82,439 78,026 310,874 79,186 86,033 95,458 101,029 361,706 29.5 % 23,003
% Gross margin38.1%38.8%39.6%37.9%38.6%40.2%41.5%43.2%45.0%42.5%
Operating expenses
Research and development 16,350 19,798 18,973 19,080 74,201 20,011 19,078 18,400 16,758 74,247 -12.2 % (2,322 )
Sales and marketing 26,265 28,591 30,554 31,084 116,494 29,494 34,259 36,581 45,842 146,176 47.5 % 14,758
General and administrative 34,462 36,511 31,821 27,469 130,263 31,743 31,519 36,793 35,330 135,385 28.6 % 7,861
Impairment of goodwill and other - - - - - - 729 - 6,100 6,829 - 6,100
Gains, losses and other items, net 7,128 833 3,381 11,258 22,600 807 2,504 4,058 4,763 12,132 -57.7 % (6,495 )
Total operating expenses 84,205 85,733 84,729 88,891 343,558 82,055 88,089 95,832 108,793 374,769 22.4 % 19,902
Loss from operations (13,086 ) (6,443 ) (2,290 ) (10,865 ) (32,684 ) (2,869 ) (2,056 ) (374 ) (7,764 ) (13,063 ) 28.5 % 3,101
% Margin-7.0%-3.2%-1.1%-5.3%-4.1%-1.5%-1.0%-0.2%-3.5%-1.5%
Other income (expense)
Interest expense (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 ) (1,885 ) (1,956 ) (1,948 ) (1,880 ) (7,669 ) 0.9 % 18
Other, net (106 ) (163 ) 35 (757 ) (991 ) 304 59 303 (214 ) 452 71.7 % 543
Total other expense (2,054 ) (1,984 ) (1,970 ) (2,655 ) (8,663 ) (1,581 ) (1,897 ) (1,645 ) (2,094 ) (7,217 ) 21.1 % 561
Loss from continuing operations before income taxes (15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 ) (3,953 ) (2,019 ) (9,858 ) (20,280 ) 27.1 % 3,662
Income taxes (4,399 ) (1,326 ) (4,597 ) (4,483 ) (14,805 ) 732 (2,608 ) (1,580 ) (8,176 ) (11,632 ) -82.4 % (3,693 )
Net earnings (loss) from continuing operations (10,741 ) (7,101 ) 337 (9,037 ) (26,542 ) (5,182 ) (1,345 ) (439 ) (1,682 ) (8,648 ) 81.4 % 7,355
Earnings (loss) from discontinued operations, net of tax 3,137 5,557 3,819 2,998 15,511 4,143 12,068 (971 ) 111 15,351 -96.3 % (2,887 )
Net earnings (loss) (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) (1,039 ) 10,723 (1,410 ) (1,571 ) 6,703 74.0 % 4,468
Diluted earnings (loss) per share (0.10 ) (0.02 ) 0.05 (0.08 ) (0.14 ) (0.01 ) 0.14 (0.02 ) (0.02 ) 0.09 73.8 % 0.06
Diluted earnings (loss) per share continuing operations (0.14 ) (0.09 ) 0.00 (0.12 ) (0.34 ) (0.07 ) (0.02 ) (0.01 ) (0.02 ) (0.11 ) 81.2 % 0.09
Some earnings (loss) per share amounts may not add due to rounding
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
Q4 FY16 to Q4 FY15
06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 06/30/15 09/30/15 12/31/15 03/31/16 YTD FY2016 % $
Revenues 186,683 204,248 208,246 205,734 804,911 196,895 207,345 221,193 224,655 850,088 9.2 % 18,921
Cost of revenue 115,197 120,771 121,601 119,239 476,808 112,084 117,131 121,237 118,464 468,916 -0.7 % (775 )
Gross profit 71,486 83,477 86,645 86,495 328,103 84,811 90,214 99,956 106,191 381,172 22.8 % 19,696

% Gross margin

38.3%40.9%41.6%42.0%40.8%43.1%43.5%45.2%47.3%44.8%
Operating expenses
Research and development 15,911 16,529 15,559 15,956 63,955 16,384 15,400 15,647 14,716 62,147 -7.8 % (1,240 )
Sales and marketing 25,619 26,789 28,498 28,915 109,821 28,170 32,945 34,664 43,792 139,571 51.4 % 14,877
General and administrative 21,388 25,926 21,847 19,895 89,056 25,586 23,402 27,455 27,508 103,951 38.3 % 7,613
Gains, losses and other items, net - - - - - - - - - - - -
Total operating expenses 62,918 69,244 65,904 64,766 262,832 70,140 71,747 77,766 86,016 305,669 32.8 % 21,250
Income from operations 8,568 14,233 20,741 21,729 65,271 14,671 18,467 22,190 20,176 75,503 -7.1 % (1,553 )
% Margin4.6%7.0%10.0%10.6%8.1%7.5%8.9%10.0%9.0%8.9%
Other income (expense)
Interest expense (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 ) (1,885 ) (1,956 ) (1,948 ) (1,880 ) (7,669 ) 0.9 % 18
Other, net (106 ) (163 ) 35 (757 ) (991 ) 304 59 303 (214 ) 452 71.7 % 543
Total other expense (2,054 ) (1,984 ) (1,970 ) (2,655 ) (8,663 ) (1,581 ) (1,897 ) (1,645 ) (2,094 ) (7,217 ) 21.1 % 561
Earnings from continuing operations before income taxes 6,514 12,249 18,771 19,074 56,608 13,090 16,570 20,545 18,082 68,286 -5.2 % (992 )
Income taxes 2,517 4,757 5,755 5,324 18,353 5,632 5,163 6,399 4,262 21,456 -19.9 % (1,062 )
Net earnings from continuing operations 3,997 7,492 13,016 13,750 38,255 7,458 11,407 14,146 13,820 46,830 0.5 % 70
Earnings from discontinued operations, net of tax - - - - - - - - - - - -
Net earnings 3,997 7,492 13,016 13,750 38,255 7,458 11,407 14,146 13,820 46,830 0.5 % 70
Diluted earnings per share 0.05 0.10 0.17 0.17 0.49 0.09 0.14 0.18 0.18 0.59 5.9 % 0.01
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
06/30/14 09/30/14 12/31/14 03/31/15 FY2015 06/30/15 09/30/15 12/31/15 03/31/16 YTD FY2016
Loss from continuing operations before income taxes (15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 ) (3,953 ) (2,019 ) (9,858 ) (20,280 )
Income taxes (4,399 ) (1,326 ) (4,597 ) (4,483 ) (14,805 ) 732 (2,608 ) (1,580 ) (8,176 ) (11,632 )
Net earnings (loss) from continuing operations (10,741 ) (7,101 ) 337 (9,037 ) (26,542 ) (5,182 ) (1,345 ) (439 ) (1,682 ) (8,648 )
Earnings (loss) from discontinued operations, net of tax 3,137 5,557 3,819 2,998 15,511 4,143 12,068 (971 ) 111 15,351
Net earnings (loss) (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031 ) (1,039 ) 10,723 (1,410 ) (1,571 ) 6,703
Earnings (loss) per share:
Basic (0.10 ) (0.02 ) 0.05 (0.08 ) (0.14 ) (0.01 ) 0.14 (0.02 ) (0.02 ) 0.09
Diluted (0.10 ) (0.02 ) 0.05 (0.08 ) (0.14 ) (0.01 ) 0.14 (0.02 ) (0.02 ) 0.09
Unusual items:
Purchased intangible asset amortization (cost of revenue) 63 3,827 3,783 3,781 11,454 3,754 3,754 3,754 4,204 15,466
Non-cash stock compensation (cost of revenue and operating expenses) 3,925 7,725 8,450 8,216 28,316 8,123 7,360 8,046 7,934 31,463
Impairment of goodwill and other - - - - - - 729 - 6,100 6,829
Restructuring charges and other adjustments (gains, losses, and other) 7,128 833 3,381 11,258 22,600 807 2,504 4,058 4,763 12,132
Separation and transformation costs (general and administrative) 10,538 8,291 7,417 5,023 31,269 3,414 6,098 6,628 4,686 20,826
Accelerated amortization (cost of revenue) - - - 4,316 4,316 1,442 78 78 252 1,850
Total unusual items, continuing operations 21,654 20,676 23,031 32,594 97,955 17,540 20,523 22,564 27,939 88,566

Earnings from continuing operations before income taxes and excluding unusual items

6,514 12,249 18,771 19,074 56,608 13,090 16,570 20,545 18,081 68,286
Income taxes 2,517 4,757 5,755 5,324 18,353 5,632 5,163 6,399 4,262 21,456
Non-GAAP net earnings 3,997 7,492 13,016 13,750 38,255 7,458 11,407 14,146 13,819 46,830
Non-GAAP earnings per share:
Basic 0.05 0.10 0.17 0.18 0.50 0.10 0.15 0.18 0.18 0.60
Diluted 0.05 0.10 0.17 0.17 0.49 0.09 0.14 0.18 0.18 0.59
Basic weighted average shares 76,833 77,123 77,039 77,427 77,106 77,918 77,960 77,831 76,753 77,616
Diluted weighted average shares 78,341 78,307 78,302 79,027 78,494 79,352 79,310 79,346 78,386 79,099
Some earnings (loss) per share amounts may not add due to rounding
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
Q4 FY16 to Q4 FY15
06/30/14 09/30/14 12/31/14 03/31/15 YTD FY2015 06/30/15 09/30/15 12/31/15 03/31/16 YTD FY2016 % $
Revenues:
Marketing services 109,288 112,750 114,403 109,662 446,103 107,726 112,979 115,725 113,342 449,772 3.4 % 3,680
Audience Solutions 73,061 78,026 75,933 76,816 303,836 68,550 72,122 77,046 80,128 297,846 4.3 % 3,312
Connectivity 4,334 13,472 17,910 19,256 54,972 20,619 22,244 28,422 31,185 102,470 61.9 % 11,929
Total operating segment revenues 186,683 204,248 208,246 205,734 804,911 196,895 207,345 221,193 224,655 850,088 9.2 % 18,921
Gross profit:
Marketing services 39,408 39,295 41,572 36,120 156,395 36,034 37,545 38,561 40,117 152,257 11.1 % 3,997
Audience Solutions 35,605 41,425 39,215 42,141 158,386 36,824 39,170 45,265 46,457 167,716 10.2 % 4,316
Connectivity (3,527 ) 2,757 5,858 8,234 13,322 11,953 13,499 16,130 19,617 61,199 138.2 % 11,383
Total operating segment gross profit 71,486 83,477 86,645 86,495 328,103 84,811 90,214 99,956 106,191 381,172 22.8 % 19,696
Gross margin:
Marketing services 36.1 % 34.9 % 36.3 % 32.9 % 35.1 % 33.4 % 33.2 % 33.3 % 35.4 % 33.9 %
Audience Solutions 48.7 % 53.1 % 51.6 % 54.9 % 52.1 % 53.7 % 54.3 % 58.8 % 58.0 % 56.3 %
Connectivity -81.4 % 20.5 % 32.7 % 42.8 % 24.2 % 58.0 % 60.7 % 56.8 % 62.9 % 59.7 %
Total operating segment gross margin 38.3 % 40.9 % 41.6 % 42.0 % 40.8 % 43.1 % 43.5 % 45.2 % 47.3 % 44.8 %
Income (loss) from continuing operations:
Marketing services 20,828 20,576 21,859 17,984 81,247 16,853 17,908 20,309 19,301 74,371 7.3 % 1,317
Audience Solutions 24,190 31,375 28,919 30,594 115,078 24,087 25,190 30,723 29,598 109,598 -3.3 % (996 )
Connectivity (14,089 ) (12,152 ) (7,802 ) (6,026 ) (40,069 ) (791 ) (1,068 ) (1,015 ) (424 ) (3,298 ) 93.0 % 5,602
Total operating segment income from operations 30,929 39,799 42,976 42,552 156,256 40,149 42,030 50,017 48,475 180,671 13.9 % 5,923
Margin:
Marketing services 19.1 % 18.2 % 19.1 % 16.4 % 18.2 % 15.6 % 15.9 % 17.5 % 17.0 % 16.5 %
Audience Solutions 33.1 % 40.2 % 38.1 % 39.8 % 37.9 % 35.1 % 34.9 % 39.9 % 36.9 % 36.8 %
Connectivity -325.1 % -90.2 % -43.6 % -31.3 % -72.9 % -3.8 % -4.8 % -3.6 % -1.4 % -3.2 %
Total operating segment operating margin 16.6 % 19.5 % 20.6 % 20.7 % 19.4 % 20.4 % 20.3 % 22.6 % 21.6 % 21.3 %
Some totals may not add due to rounding.
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)

(Dollars in thousands)

For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2016 2015 2016 2015
Net loss from continuing operations (1,682 ) (9,037 ) (8,648 ) (26,542 )
Income taxes (8,176 ) (4,483 ) (11,632 ) (14,805 )
Other expense (2,094 ) (2,655 ) (7,217 ) (8,663 )
Loss from operations (7,764 ) (10,865 ) (13,063 ) (32,684 )
Depreciation and amortization 22,242 25,760 85,463 80,447
Less:
Deferred interest amortization 306 248 1,206 1,009
Adjusted depreciation and amortization 21,936 25,512 84,257 79,438
EBITDA 14,172 14,647 71,194 46,754
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses) 7,934 8,216 31,463 28,316
Impairment of goodwill and other 6,100 - 6,829 -
Restructuring charges and other adjustments (gains, losses, and other) 4,763 11,258 12,132 22,600
Separation and transformation costs (general and administrative) 4,686 5,023 20,826 31,269
Other adjustments 23,483 24,497 71,250 82,185
Adjusted EBITDA 37,655 39,144 142,444 128,939

Contacts:

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

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