0000733269-16-000058.txt : 20160517 0000733269-16-000058.hdr.sgml : 20160517 20160517164637 ACCESSION NUMBER: 0000733269-16-000058 CONFORMED SUBMISSION TYPE: 8-K CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20160517 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160517 DATE AS OF CHANGE: 20160517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACXIOM CORP CENTRAL INDEX KEY: 0000733269 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 710581897 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13163 BUSINESS ADDRESS: STREET 1: 601 E. 3RD STREET CITY: LITTLE ROCK STATE: AR ZIP: 72201 BUSINESS PHONE: 5012521000 MAIL ADDRESS: STREET 1: 601 E. 3RD STREET CITY: LITTLE ROCK STATE: AR ZIP: 72201 FORMER COMPANY: FORMER CONFORMED NAME: CCX NETWORK INC DATE OF NAME CHANGE: 19880816 8-K 1 form8k.htm FORM 8-K
 
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):  May 17, 2016
  
     
 
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.)
   
P.O. Box 8190, 601 E. Third Street,
Little Rock, Arkansas
 
72203-8190
(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):


☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐
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 May 17, 2016, Acxiom Corporation (the "Company") issued a press release announcing the results of its financial performance for the fourth quarter and fiscal year ended March 31, 2016. The Company will hold a conference call at 4:00 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 (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 excluding items 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 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 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 May 17, 2016
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:   May 17, 2016


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 May 17, 2016

EX-99.1 2 ex99.htm EXHIBIT 99.1 - PRESS RELEASE AND FINANCIALS


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


ACXIOM ANNOUNCES FOURTH QUARTER AND FISCAL YEAR RESULTS

Fourth Quarter Revenue Grows 9% Year-over-Year

Revenue Increases in Each Segment

Full Year Connectivity Revenue Exceeds $100 Million

LITTLE ROCK, Ark. – May 17, 2016 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.

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
 
1

·
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.

2
·
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 to the press release.

3
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.
 
4
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.
 
5
 
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 margin
    
45.0
%
    
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
%
                                 
                                 
                                 
Basic shares
    
76,753
      
77,427
                  
FDWA shares
    
78,386
      
79,027
                  
                                 
 
 
6
 
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 margin
    
42.5
%
    
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
%
                                 
                                 
                                 
Basic shares
    
77,616
      
77,106
                  
FDWA shares
    
79,099
      
78,494
                  
                                 
 
 
7
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
    
For the Twelve Months Ended
  
   
March 31,
   
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
  
                                 
 
 
8
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,
    
March 31,
  
   
2016
    
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
)
                 
 
 
9
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,
    
March 31,
  
   
2016
    
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
)
                 
                 
                 
 
 
10
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
%
                
                                 
 
 
11
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
%
                
 
12
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
)

13
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
%)
                                 
                                 
 
14
 
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
  
                 
 
15
 
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
      
-
  
                 
 
16
 
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
  

17
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 margin
    
38.1
%
    
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
  
                                                                                                 

18

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
)
  % Margin
    
4.6
%
    
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
  

19
                           
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
 
                                                                  
 
20
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.
                                                                                          

21

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
  
                                 
22
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