Connectivity Nears Breakeven
Sale of IT Infrastructure Management
Business Completed
Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and
software-as-a-service company, today announced financial results
for its first quarter ended June 30, 2015.
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Financial Highlights
- Revenue: Total revenue was $197
million, up approximately 5% compared to the first quarter of last
year.
- Operating Income (Loss): GAAP
operating loss from continuing operations was $3 million compared
to a loss of $13 million in the prior year. Non-GAAP operating
income from continuing operations improved 71% to approximately $15
million compared to $9 million a year ago.
- Earnings (Loss) per Share: GAAP
loss per share from continuing operations was $0.07 compared to a
net loss of $0.14 in the prior year. Non-GAAP diluted earnings per
share from continuing operations were $0.09, up 80% from $0.05 a
year ago.
- Operating Cash Flow: Operating
cash flow from continuing operations improved to $12 million
compared to negative $15 million a year ago.
- Free Cash Flow to Equity: Free
cash flow to equity was negative $12 million compared to negative
$43 million in the prior year.
Segment Results
During the first quarter of fiscal 2016, Acxiom realigned its
organizational structure to better reflect its business strategy.
The Company will report its financial performance based on the
following segments: Marketing Services and Audience Solutions and
Connectivity. Prior period amounts have been adjusted to conform to
the way the Company internally managed and monitored segment
performance during the first quarter of fiscal year 2016.
Marketing Services and Audience Solutions
- Revenue was $176 million, down 3%
compared to the first quarter of last year primarily due to
declines in International. US revenue of $159 million was roughly
flat year-over-year.
- Non-GAAP gross margin decreased from
43% to 41%.
- Non-GAAP operating income was $40
million compared to $47 million in the prior year. The decline was
primarily driven by lower revenue.
Connectivity
- Revenue was $21 million, up
approximately 376% compared to the first quarter of last year,
driven by the addition of LiveRamp™ and continued onboarding
momentum.
- Non-GAAP gross margin improved from
negative 83% to positive 60%.
- Non-GAAP operating loss improved by
approximately $14 million to roughly breakeven driven by growth in
subscriptions and royalties.
Non-GAAP results exclude items including non-cash compensation,
purchased intangible asset amortization, and separation and
transformation costs. A reconciliation between GAAP and non-GAAP
results is attached to this release.
“The first quarter was a solid start to fiscal 2016,” said
Acxiom CEO Scott Howe. “Our results this quarter demonstrate the
continued strength of Connectivity. A growing list of customers and
synergies from our combination with LiveRamp contributed to
dramatically expanding revenue, gross margin and bottom-line
performance.”
“We are also pleased to announce that the sale of our IT
Infrastructure Management business was completed on July 31, 2015,
leaving Acxiom with a portfolio of businesses that share a single
vision and mission,” continued Howe.
Business Highlights
- LiveRamp added 30 new customers
during the quarter and added 10 new partner integrations.
Marketers can now onboard and distribute their data to a growing
network of over 200 marketing platforms and data providers.
- Acxiom relaunched its email and
cross-channel marketing business, Acxiom Impact™, an advanced
marketing offering specifically designed to meet the unique needs
of sophisticated enterprise marketers.
- The Company appointed Jeremy Allen
as President of Marketing Services. Allen’s appointment
completes Acxiom's new divisional structure, which includes Travis
May as President of Connectivity and Rick Erwin as President of
Audience Solutions. Acxiom's CFO, Warren Jenson, is heading the
Company's international operations.
- Acxiom repurchased approximately
832,000 shares for $15 million during the quarter. Since
inception of the share repurchase program in August 2011, the
Company has repurchased 13.7 million shares for $217 million.
- On July 31, 2015, Acxiom completed
the sale of its IT Infrastructure Management business to
Charlesbank Capital Partners and co-investor M/C Partners.
Financial Outlook
The Company’s guidance excludes the impact of unusual items,
non-cash compensation and acquired intangible asset amortization.
Acxiom reconfirms the following estimates for fiscal 2016:
- Revenue from continuing operations in
the range of $815 million to $840 million.
- Earnings per diluted share from
continuing operations in the range of $0.45 to $0.50.
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CDT today to
further discuss this information. Interested parties are invited to
listen to the call, which will be broadcast via the Internet at
investors.acxiom.com. A slide presentation will be referenced
during the call and can be accessed here.
About Acxiom
Acxiom is an enterprise data, analytics and
software-as-a-service company that uniquely fuses trust, experience
and scale to fuel data-driven results. For over 40 years, Acxiom
has been an innovator in harnessing the most important sources and
uses of data to strengthen connections between people, businesses
and their partners. Utilizing a channel and media neutral approach,
we leverage cutting-edge, data-oriented products and services to
maximize customer value. Every week, Acxiom powers more than a
trillion transactions that enable better living for people and
better results for our 7,000+ global clients. For more information
about Acxiom, visit Acxiom.com.
Forward-Looking Statements
This release and today’s conference call may contain
forward-looking statements including, without limitation,
statements regarding expected levels of revenue and earnings per
share. Such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially. The following are factors, among others, that could
cause actual results to differ materially from these
forward-looking statements: the possibility that the expected
revenue from the divisions may not be realized within the expected
timeframe; the possibility that certain contracts may not generate
the anticipated revenue or profitability or may not be closed
within the anticipated time frames; the possibility that
significant customers may experience extreme, severe economic
difficulty or otherwise reduce or cancel the amount of business
they do with us; the possibility that we will not successfully
complete customer contract requirements on time or meet the service
levels specified in the contracts, which may result in contract
penalties or lost revenue; the possibility that data suppliers
might withdraw data from us, leading to our inability to provide
certain products and services to our clients; the possibility that
we may not be able to attract, retain or motivate qualified
technical, sales and leadership associates, or that we may lose key
associates; the possibility that we may not be able to adequately
adapt to rapidly changing computing environments, technologies and
marketing practices; the possibility that we will not be able to
continue to receive credit upon satisfactory terms and conditions;
the possibility that negative changes in economic conditions in
general or other conditions might lead to a reduction in demand for
our products and services; the possibility that there will be
changes in consumer or business information industries and markets
that negatively impact the company; the possibility that the
historical seasonality of our business may change; the possibility
that we will not be able to achieve anticipated cost reductions and
avoid unanticipated costs; the possibility that the fair value of
certain of our assets may not be equal to the carrying value of
those assets now or in future time periods; the possibility that
unusual charges may be incurred; the possibility that changes in
accounting pronouncements may occur and may impact these
forward-looking statements; the possibility that we may encounter
difficulties when entering new markets or industries; the
possibility that we could experience loss of data center capacity
or interruption of telecommunication links; the possibility that
new laws may be enacted which limit our ability to provide services
to our clients and/or which limit the use of data; and other risks
and uncertainties, including those detailed from time to time in
our periodic reports filed with the Securities and Exchange
Commission, including our current reports on Form 8-K, quarterly
reports on Form 10-Q and annual reports on Form 10-K, particularly
the discussion under the caption “Item 1A, RISK FACTORS” in our
Annual Report on Form 10-K for the year ended March 31, 2015, which
was filed with the Securities and Exchange Commission on May 27,
2015.
With respect to the provision of products or services outside
our primary base of operations in the United States, all of the
above factors apply, along with the difficulty of doing business in
numerous sovereign jurisdictions due to differences in scale,
competition, culture, laws and regulations.
We undertake no obligation to update the information contained
in this press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
To automatically receive Acxiom Corporation financial news by
email, please visit www.acxiom.com and subscribe to email
alerts.
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (Dollars in thousands, except loss per
share) For
the Three Months Ended June 30, $ % 2015 2014 Variance
Variance Revenues 196,895 186,683 10,212 5.5 %
Cost of revenue 117,709 113,090 4,619 4.1 % Gross
profit 79,186 73,593 5,593 7.6 %
% Gross margin 40.2
% 39.4 % Operating expenses: Research
and development 20,011 16,350 3,661 22.4 % Sales and marketing
29,494 26,500 2,994 11.3 % General and administrative 31,743 36,701
(4,958 ) (13.5 %) Gains, losses and other items, net 807
7,128 (6,321 ) (88.7 %) Total operating expenses 82,055
86,679 (4,624 ) (5.3 %) Loss from operations
(2,869 ) (13,086 ) 10,217 78.1 % %
Margin -1.5
% -7.0 % Other income (expense): Interest
expense (1,885 ) (1,948 ) 63 3.2 % Other, net 304 (106 ) 410
386.8 % Total other expense (1,581 ) (2,054 ) 473 23.0 %
Loss from continuing operations before income taxes (4,450 )
(15,140 ) 10,690 70.6 % Income taxes 732 (4,399 )
5,131 116.6 % Net loss from continuing operations (5,182 )
(10,741 ) 5,559 51.8 % Earnings from discontinued
operations, net of tax 4,143 3,137 1,006 32.1 %
Net loss (1,039 ) (7,604 ) 6,565 86.3 % Basic
earnings (loss) per share: Net loss from continuing operations
(0.07 ) (0.14 ) 0.07 52.4 % Net earnings from discontinued
operations 0.05 0.04 0.01 30.2 % Net loss (0.01 )
(0.10 ) 0.09 86.5 % Diluted earnings (loss) per
share: Net loss from continuing operations (0.07 ) (0.14 ) 0.07
52.4 % Net earnings from discontinued operations 0.05 0.04
0.01 32.8 % Net loss (0.01 ) (0.10 ) 0.09 86.8 %
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP
TO NON-GAAP EPS (Unaudited) (Dollars in thousands, except earnings
(loss) per share) For the Three Months
Ended June 30, 2015 2014 Loss from continuing
operations before income taxes (4,450 ) (15,140 ) Income
taxes 732 (4,399 ) Net loss from continuing
operations (5,182 ) (10,741 ) Earnings from discontinued
operations, net of tax 4,143 3,137 Net loss
(1,039 ) (7,604 ) Loss per share: Basic (0.01 ) (0.10
) Diluted (0.01 ) (0.10 ) Excluded items: Purchased
intangible asset amortization (cost of revenue) 3,754 63 Non-cash
stock compensation (cost of revenue and operating expenses) 8,123
3,925 Restructuring charges and other adjustments (gains, losses,
and other) 807 7,128 Separation and transformation costs (general
and administrative) 3,414 10,538 Accelerated amortization (cost of
revenue) 1,442 - Total excluded items,
continuing operations 17,540 21,654
Earnings from continuing operations before
income taxes and excluding items
13,090 6,514 Income taxes 5,632 2,517
Non-GAAP net earnings 7,458 3,997 Non-GAAP
earnings per share: Basic 0.10 0.05
Diluted 0.09 0.05 Basic weighted average
shares 77,918 76,833 Diluted weighted average
shares 79,352 78,341 ACXIOM CORPORATION
AND SUBSIDIARIES CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited) (In thousands, except earnings (loss) per share)
For the Three Months Ended June 30, June 30,
2015 2014 Basic loss per share from continuing operations:
Numerator - net loss (5,182 ) (10,741 ) Denominator -
weighted-average shares outstanding 77,918 76,833
Basic loss per share (0.07 ) (0.14 ) Diluted loss per share
from continuing operations: Numerator - net loss (5,182 ) (10,741 )
Denominator - weighted-average shares outstanding 77,918
76,833 Diluted loss per share (0.07 ) (0.14 )
Basic earnings per share from discontinued operations: Numerator -
net earnings 4,143 3,137 Denominator - weighted-average
shares outstanding 77,918 76,833 Basic earnings per
share 0.05 0.04 Diluted earnings per share
from discontinued operations: Numerator - net earnings 4,143 3,137
Denominator - weighted-average shares outstanding 77,918
76,833 Dilutive effect of common stock options, warrants and
restricted stock - - 77,918 76,833
Diluted earnings per share 0.05 0.04
Diluted loss per share: Numerator - net loss (1,039 ) (7,604 )
Denominator - weighted-average shares outstanding 77,918
76,833 Dilutive effect of common stock options, warrants, and
restricted stock - - 77,918 76,833
Diluted loss per share (0.01 ) (0.10 ) ACXIOM
CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT-GAAP (Unaudited)
(Dollars in thousands)
For the Three Months Ended June 30, 2015 June 30, 2014
Marketing Services Marketing Services & Audience Solutions
Connectivity Corporate Total & Audience Solutions Connectivity
Corporate Total Revenues 176,276 20,619 - 196,895 182,349
4,334 - 186,683 Gross profit (loss) 72,019 8,609 (1,442 )
79,186 77,224 (3,631 ) - 73,593
% Gross margin 40.9
% 41.8 % n/a 40.2 %
42.3 % -83.8 % n/a 39.4
% Operating income (loss) 38,287 (8,025 ) (33,131 )
(2,869 ) 46,221 (14,261 ) (45,046 ) (13,086 )
% margin
21.7 % -38.9 % n/a -1.5
% 25.3 % -329.0 % n/a
-7.0 % ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT-NON-GAAP (Unaudited) (Dollars in
thousands)
For the
Three Months Ended June 30, 2015 June 30, 2014 Marketing Services
Marketing Services & Audience Solutions Connectivity Corporate
Total & Audience Solutions Connectivity Corporate Total
Revenues 176,276 20,619 - 196,895 182,349 4,334 - 186,683
Gross profit (loss) 72,473 12,338 - 84,811 77,559 (3,599 ) - 73,960
% Gross margin 41.1 % 59.8 %
n/a 43.1 % 42.5 % -83.0
% n/a 39.6 % Operating income
(loss) 40,253 (173 ) (25,409 ) 14,671 47,270 (13,852 ) (24,850 )
8,568
% margin 22.8 % -0.8 %
n/a 7.5 % 25.9 % -319.6
% n/a 4.6 %
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP
TO NON-GAAP SEGMENT RESULTS (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30, 2015 June
30, 2014 Marketing Services Marketing Services & Audience
Solutions Connectivity Corporate Total & Audience Solutions
Connectivity Corporate Total Gross profit (loss) 72,019
8,609 (1,442 ) 79,186 77,224 (3,631 ) - 73,593 Purchased
intangible asset amortization 25 3,729 - 3,754 31 32 - 63 Non-cash
stock compensation 429 - - 429 304 - - 304 Accelerated amortization
- - 1,442
1,442 - - -
- Gross profit (loss) before excluded items
72,473 12,338 -
84,811 77,559 (3,599 ) -
73,960 Operating income
(loss) 38,287 (8,025 ) (33,131 ) (2,869 ) 46,221 (14,261 ) (45,046
) (13,086 ) Purchased intangible asset amortization 25 3,729
- 3,754 31 32 - 63 Non-cash stock compensation 1,914 4,123 2,086
8,123 1,007 377 2,541 3,925 Restructuring charges and other
adjustments 27 - 780 807 11 - 7,117 7,128 Separation and
transformation costs - - 3,414 3,414 - - 10,538 10,538 Accelerated
amortization - - 1,442
1,442 - - -
- Operating income (loss) before
excluded items 40,253 (173 ) (25,409 )
14,671 47,270 (13,852 )
(24,850 ) 8,568 ACXIOM
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Dollars in thousands)
June 30, March 31, $ % 2015 2015
Variance Variance
Assets
Current assets: Cash and cash equivalents 123,192 141,010 (17,818 )
(12.6 %) Trade accounts receivable, net 135,626 126,896 8,730 6.9 %
Deferred income taxes 23,111 25,610 (2,499 ) (9.8 %) Refundable
income taxes 21 5,239 (5,218 ) (99.6 %) Restricted cash held in
escrow 31,000 31,000 0 0.0 % Other current assets 37,187 34,975
2,212 6.3 % Assets of discontinued operations 163,768
172,284 (8,516 ) (4.9 %) Total current assets 513,905
537,014 (23,109 ) (4.3 %) Property and
equipment 505,736 505,721 15 0.0 % Less - accumulated depreciation
and amortization 325,995 329,467 (3,472 ) (1.1 %)
Property and equipment, net 179,741 176,254
3,487 2.0 % Software, net of accumulated amortization 63,242
68,962 (5,720 ) (8.3 %) Goodwill 497,456 497,362 94 0.0 % Purchased
software licenses, net of accumulated amortization 9,492 9,551 (59
) (0.6 %) Other assets, net 31,195 33,281 (2,086 )
(6.3 %) 1,295,031 1,322,424 (27,393 ) (2.1 %)
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 87,186
32,232 54,954 170.5 % Trade accounts payable 39,606 30,094 9,512
31.6 % Accrued payroll and related expenses 26,013 36,659 (10,646 )
(29.0 %) Other accrued expenses 55,025 62,754 (7,729 ) (12.3 %)
Acquisition escrow payable 31,000 31,000 0 0.0 % Deferred revenue
33,554 33,620 (66 ) (0.2 %) Income taxes - - 0 - Liabilities of
discontinued operations 50,764 57,433 (6,669 ) (11.6
%) Total current liabilities 323,148 283,792
39,356 13.9 % Long-term debt 184,802 247,855 (63,053 ) (25.4
%) Deferred income taxes 76,654 80,675 (4,021 ) (5.0 %)
Other liabilities 12,125 6,845 5,280 77.1 %
Stockholders' equity: Common stock 12,847 12,794 53 0.4 %
Additional paid-in capital 1,045,897 1,034,526 11,371 1.1 %
Retained earnings 590,759 591,798 (1,039 ) (0.2 %) Accumulated
other comprehensive income 10,142 9,413 729 7.7 % Treasury stock,
at cost (961,343 ) (945,274 ) (16,069 ) (1.7 %) Total stockholders'
equity 698,302 703,257 (4,955 ) (0.7 %)
1,295,031 1,322,424 (27,393 ) (2.1 %)
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30,
2015 2014 Cash flows from
operating activities: Net loss (1,039 ) (7,604 ) Earnings from
discontinued operations, net of tax (4,143 ) (3,137 ) Non-cash
operating activities: Depreciation and amortization 21,775 15,920
Loss (gain) on disposal or impairment of assets 241 (254 ) Deferred
income taxes (1,522 ) (1,843 ) Non-cash stock compensation expense
8,123 3,925 Changes in operating assets and liabilities: Accounts
receivable (8,037 ) 11,399 Other assets 809 3,590 Deferred costs
(425 ) (211 ) Accounts payable and other liabilities (3,530 )
(29,057 ) Deferred revenue (255 ) (8,184 ) Net cash provided by
(used in) operating activities 11,997 (15,456 ) Cash flows
from investing activities: Capitalized software (2,797 ) (4,969 )
Capital expenditures (12,876 ) (16,778 ) Data acquisition costs
(430 ) (635 ) Net cash used in investing activities (16,103 )
(22,382 ) Cash flows from financing activities: Payments of debt
(8,099 ) (4,917 ) Sale of common stock, net of stock acquired for
withholding taxes 2,069 (674 ) Income tax impact of stock options,
warrants and restricted stock (77 ) - Acquisition of treasury stock
(14,951 ) - Net cash used in financing activities (21,058 )
(5,591 ) Cash flows from discontinued operations: From operating
activities 11,653 17,310 From investing activities (4,484 ) 704
From financing activities (153 ) (585 ) Net cash provided by
discontinued operations 7,016 17,429 Effect of
exchange rate changes on cash 330 332 Net
change in cash and cash equivalents (17,818 ) (25,668 ) Cash and
cash equivalents at beginning of period 141,010 418,586
Cash and cash equivalents at end of period 123,192
392,918
Supplemental cash flow information:
Cash paid (received) during the period for: Interest 2,185 2,875
Income taxes (1,044 ) 297 Payments on capital leases and
installment payment arrangements 216 1,235 Other debt payments,
excluding line of credit 8,036 4,267 ACXIOM
CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW
AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited) (Dollars in thousands)
06/30/14 09/30/14
12/31/14 03/31/15 FY2015
06/30/15 Net cash provided by operating activities -
continuing operations (15,456 ) 14,325 32,890 29,372 61,131 11,997
Less: Payments for investments - - - - - - Capitalized
software (4,969 ) (5,608 ) (4,408 ) (3,602 ) (18,587 ) (2,797 )
Capital expenditures (16,778 ) (15,362 ) (10,212 ) (14,600 )
(56,952 ) (12,876 ) Data acquisition costs (635 ) (468 ) (394 )
(374 ) (1,871 ) (430 ) Payments on capital leases and installment
payment arrangements (650 ) (567 ) (471 ) (315 ) (2,003 ) (63 )
Other required debt payments (4,267 ) (4,272 )
(8,027 ) (8,032 ) (24,598 )
(8,036 ) Total (42,755 ) (11,952 )
9,378 2,449
(42,880 ) (12,205 ) ACXIOM CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP (Unaudited)
(Dollars in thousands, except earnings per share)
Q1 FY16 to Q1 FY15 FY2014 06/30/14
09/30/14 12/31/14
03/31/15 FY2015 06/30/15 % $ Revenues
805,153 186,683 204,248 208,246 205,734 804,911 196,895 5.5 %
10,212 Cost of revenue 472,492 113,090
122,088 122,567
123,055 480,800 117,709 4.1 %
4,619 Gross profit 332,661 73,593 82,160 85,679 82,679 324,111
79,186 7.6 % 5,593
% Gross margin 41.3 %
39.4 % 40.2 % 41.1 %
40.2 % 40.3 % 40.2 %
Operating expenses Research and development 65,269 16,350
20,555 19,696 19,737 76,338 20,011 22.4 % 3,661 Sales and marketing
115,077 26,500 28,842 30,997 32,319 118,658 29,494 11.3 % 2,994
General and administrative 108,637 36,701 38,373 33,895 30,230
139,199 31,743 -13.5 % (4,958 ) Gains, losses and other items, net
42,121 7,128 833
3,381 11,258 22,600
807 -88.7 % (6,321 ) Total operating expenses 331,104
86,679 88,603 87,969 93,544 356,795 82,055 -5.3 % (4,624 )
Income (loss) from operations 1,557 (13,086 ) (6,443 ) (2,290 )
(10,865 ) (32,684 ) (2,869 ) 78.1 % 10,217
% Margin
0.2 % -7.0 % -3.2 %
-1.1 % -5.3 % -4.1 %
-1.5 % Other income (expense) Interest expense (8,671
) (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 ) (1,885 ) 3.2 % 63
Other, net 1,814 (106 ) (163 )
35 (757 ) (991 ) 304
386.8 % 410 Total other expense (6,857 ) (2,054 ) (1,984 ) (1,970 )
(2,655 ) (8,663 ) (1,581 ) 23.0 % 473 Loss from continuing
operations before income taxes (5,300 ) (15,140 ) (8,427 ) (4,260 )
(13,520 ) (41,347 ) (4,450 ) 70.6 % 10,690 Income taxes 12,040
(4,399 ) (1,326 ) (4,597 )
(4,483 ) (14,805 ) 732 116.6 %
5,131 Net earnings (loss) from continuing operations (17,340
) (10,741 ) (7,101 ) 337 (9,037 ) (26,542 ) (5,182 ) 51.8 % 5,559
Earnings from discontinued operations, net of tax 26,143
3,137 5,557 3,819
2,998 15,511 4,143
32.1 % 1,006 Net earnings (loss) 8,803 (7,604 )
(1,544 ) 4,156 (6,039 ) (11,031 ) (1,039 ) 86.3 % 6,565 NCI
(60 ) 0 0 0 0 0 0 - 0 Net earnings (loss) attributable to
Acxiom 8,863 (7,604 ) (1,544 )
4,156 (6,039 ) (11,031 ) (1,039
) 86.3 % 6,565 Diluted earnings (loss) per share 0.12
(0.10 ) (0.02 ) 0.05
(0.08 ) (0.14 ) (0.01 ) 86.5 % 0.09
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS-NON GAAP (Unaudited) (Dollars in thousands, except
earnings per share)
Q1
FY16 to Q1 FY15 FY2014 06/30/14 09/30/14
12/31/14 03/31/15 FY2015
06/30/15 % $ Revenues 805,153 186,683 204,248 208,246
205,734 804,911 196,895 5.5 % 10,212 Cost of revenue 471,015
112,723 118,012
118,412 114,586 463,733
112,084 -0.6 % (639 ) Gross profit 334,138 73,960
86,236 89,834 91,148 341,178 84,811 14.7 % 10,851
% Gross
margin 41.5 % 39.6 % 42.2
% 43.1 % 44.3 % 42.4
% 43.1 % Operating expenses Research
and development 63,701 15,911 17,286 16,283 16,613 66,093 16,384
3.0 % 473 Sales and marketing 112,080 25,854 27,040 28,941 30,150
111,985 28,170 9.0 % 2,316 General and administrative 94,807 23,627
27,702 23,869 22,656 97,854 25,586 8.3 % 1,959 Gains, losses and
other items, net - - -
- - - -
- - Total operating expenses 270,588 65,392 72,028 69,093
69,419 275,932 70,140 7.3 % 4,748 Income from operations
63,550 8,568 14,208 20,741 21,729 65,246 14,671 71.2 % 6,103
%
Margin 7.9 % 4.6 % 7.0
% 10.0 % 10.6 % 8.1
% 7.5 % Other income (expense) Interest
expense (8,671 ) (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 )
(1,885 ) 3.2 % 63 Other, net (758 ) (106 ) (163 )
35 (757 ) (991 )
304 386.8 % 410 Total other expense (9,429 ) (2,054 ) (1,984
) (1,970 ) (2,655 ) (8,663 ) (1,581 ) 23.0 % 473 Earnings
from continuing operations before income taxes 54,121 6,514 12,224
18,771 19,074 56,583 13,090 101.0 % 6,576 Income taxes 17,200
2,517 4,757 5,755
5,324 18,353 5,632
123.8 % 3,115 Net earnings from continuing operations
36,921 3,997 7,467 13,016 13,750 38,230 7,458 86.6 % 3,461
Earnings from discontinued operations, net of tax - -
- - -
- - - - Net earnings
36,921 3,997 7,467 13,016 13,750 38,230 7,458 86.6 % 3,461
NCI (60 ) - - - - - - - - Net earnings attributable to
Acxiom 36,981 3,997 7,467
13,016 13,750
38,230 7,458 86.6 % 3,461 Diluted earnings per
share 0.48 0.05 0.10
0.17 0.17 0.49
0.09 84.2 % 0.04 ACXIOM CORPORATION AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (Unaudited)
(Dollars in thousands, except earnings per share)
FY2014 06/30/14 09/30/14 12/31/14
03/31/15 FY2015 06/30/15
Loss from continuing operations before income taxes (5,300 )
(15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 )
Income taxes 12,040 (4,399 ) (1,446 )
(4,717 ) (4,603 ) (15,165 ) 732
Net earnings (loss) from continuing operations
(17,340 ) (10,741 ) (6,981 ) 457 (8,917 ) (26,182 ) (5,182 )
Earnings (loss) from discontinued operations, net of tax 26,143
3,137 5,557 3,819
2,998 15,511 4,143
Net earnings (loss) 8,803 (7,604 )
(1,424 ) 4,276 (5,919 )
(10,671 ) (1,039 ) Earnings (loss) per share:
Basic 0.12 (0.10 ) (0.02 )
0.06 (0.08 ) (0.14 )
(0.01 ) Diluted 0.11 (0.10 ) (0.02 )
0.05 (0.08 ) (0.14
) (0.01 ) Excluded items: Purchased intangible asset
amortization (cost of revenue) 252 63 3,802 3,783 3,781 11,429
3,754 Non-cash stock compensation (cost of revenue and operating
expenses) 13,206 3,925 7,725 8,450 8,216 28,316 8,123 Restructuring
charges and other adjustments (gains, losses, and other) 42,121
7,128 833 3,381 11,137 22,479 807 Separation and transformation
costs (general and administrative) 6,409 10,538 8,291 7,417 5,144
31,390 3,414 Accelerated amortization (cost of revenue) - - - -
4,316 4,316 1,442 Other income (2,567 ) - -
- -
- - Total excluded items, continuing
operations 59,421 21,654 20,651
23,031 32,594
97,930 17,540
Earnings from continuing operations before
income taxes and excluding items
54,121 6,514 12,224 18,771 19,074 56,583 13,090 Income taxes
17,200 2,517 4,757
5,755 5,324 18,353
5,632 Non-GAAP earnings from continuing operations
36,921 3,997 7,467 13,016 13,750 38,230 7,458 Less:
noncontrolling interest (60 ) - -
- - -
- Non-GAAP net earnings 36,981 3,997
7,467 13,016
13,750 38,230 7,458
Non-GAAP earnings per share: Basic 0.50
0.05 0.10 0.17
0.18 0.50 0.10
Diluted 0.48 0.05 0.10
0.17 0.17
0.49 0.09 Basic weighted average shares 74,690
76,833 77,123
77,039 77,427 77,106
77,918 Diluted weighted average shares 76,954
78,341 78,307
78,302 79,027 78,494
79,352 ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT-GAAP (Unaudited) (Dollars in
thousands)
Q1 FY16 to Q1 FY15 FY2014
06/30/14 09/30/14 12/31/14
03/31/15 FY2015 06/30/15 % $
Revenues: Marketing services and audience solutions
790,394 182,349 190,776 190,336 186,478 749,939 176,276 -3.3 %
(6,073 ) Connectivity 14,759 4,334
13,472 17,910 19,256
54,972 20,619 375.7 % 16,285
Total revenues 805,153 186,683
204,248 208,246
205,734 804,911 196,895 5.5 %
10,212 Gross profit from continuing operations:
Marketing services and audience solutions 344,034 77,224
83,409 83,715 82,594 326,942 72,019 -6.7 % (5,205 ) Connectivity
(11,373 ) (3,631 ) (1,249 ) 1,964 4,400 1,484 8,609 337.1 % 12,240
Corporate - - - -
(4,315 ) (4,315 ) (1,442 ) n/a
(1,442 ) Total gross profit from continuing operations
332,661 73,593 82,160
85,679 82,679
324,111 79,186 7.6 % 5,593 Gross
margin: Marketing services and audience solutions 43.5 %
42.3 % 43.7 % 44.0 % 44.3 % 43.6 % 40.9 % Connectivity -77.1 %
-83.8 % -9.3 % 11.0 % 22.9 % 2.7 % 41.8 % Total 41.3 % 39.4
% 40.2 % 41.1 % 40.2 % 40.3 % 40.2 % Income (loss) from
continuing operations: Marketing services and audience
solutions 208,403 46,221 52,302 51,268 48,065 197,856 38,287 -17.2
% (7,934 ) Connectivity (48,839 ) (14,261 ) (20,277 ) (16,876 )
(17,444 ) (68,858 ) (8,025 ) 43.7 % 6,236 Corporate
(158,007
)
(45,046 ) (38,468 ) (36,682 )
(41,486 ) (161,682 ) (33,131 ) 26.5 % 11,915
Total income (loss) from continuing operations 1,557
(13,086 ) (6,443 ) (2,290 )
(10,865 ) (32,684 ) (2,869 ) 78.1 %
10,217 Margin: Marketing services and audience
solutions 26.4 % 25.3 % 27.4 % 26.9 % 25.8 % 26.4 % 21.7 %
Connectivity -330.9 % -329.0 % -150.5 % -94.2 % -90.6 % -125.3 %
-38.9 % Total 0.2 % -7.0 % -3.2 % -1.1 % -5.3 % -4.1 % -1.5
% ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY
SEGMENT - NON GAAP (Unaudited) (Dollars in thousands)
Q1 FY16 to Q1 FY15 FY2014 06/30/14
09/30/14 12/31/14 03/31/15
FY2015 06/30/15 % $
Revenues:
Marketing services and audience solutions 790,394 182,349
190,776 190,336 186,478 749,939 176,276 -3.3 % (6,073 )
Connectivity 14,759 4,334 13,472
17,910 19,256
54,972 20,619 375.7 % 16,285
Total revenues 805,153 186,683 204,248
208,246 205,734
804,911 196,895 5.5 % 10,212
Gross profit from continuing operations: Marketing
services and audience solutions 345,356 77,559 85,029 82,863 83,012
328,463 72,473 -6.6 % (5,086 ) Connectivity (11,218 ) (3,599 )
1,207 6,971 8,136 12,715 12,338 442.8 % 15,937 Corporate - -
- -
- - - n/a - Total
income from continuing operations 334,138 73,960
86,236 89,834
91,148 341,178 84,811
14.7 % 10,851 Gross margin: Marketing services
and audience solutions 43.7 % 42.5 % 44.6 % 43.5 % 44.5 % 43.8 %
41.1 % Connectivity -76.0 % -83.0 % 9.0 % 38.9 % 42.3 % 23.1 % 59.8
% Total 41.5 % 39.6 % 42.2 % 43.1 % 44.3 % 42.4 % 43.1 %
Income from continuing operations: Marketing services
and audience solutions 214,242 47,269 54,902 51,280 50,803 204,254
40,253 -14.8 % (7,016 ) Connectivity (47,555 ) (13,852 ) (13,053 )
(6,205 ) (5,809 ) (38,919 ) (173 ) 98.8 % 13,679 Corporate (103,137
) (24,849 ) (27,641 ) (24,334 )
(23,265 ) (100,089 ) (25,409 ) -2.3 % (560 )
Total income from continuing operations 63,550 8,568
14,208 20,741
21,729 65,246 14,671
71.2 % 6,103 Margin: Marketing services
and audience solutions 27.1 % 25.9 % 28.8 % 26.9 % 27.2 % 27.2 %
22.8 % Connectivity -322.2 % -319.6 % -96.9 % -34.6 % -30.2 % -70.8
% -0.8 % Total 7.9 % 4.6 % 7.0 % 10.0 % 10.6 % 8.1 % 7.5 %
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
March 31, June 30, Sept 30, Dec 31, March 31,
June 30, 2014 2014 2014 2014
2015 2015
Assets
Current assets: Cash and cash equivalents 418,586 392,918 109,810
126,891 141,010 123,192 Trade accounts receivable, net 129,216
120,186 123,055 122,320 126,896 135,626 Deferred income taxes 9,469
16,774 14,689 12,408 25,610 23,111 Refundable income taxes 11,535
11,436 5,128 11,823 5,239 21 Restricted cash held in escrow -
31,000 31,000 31,000 31,000 Other current assets 39,245 36,904
41,428 38,443 34,975 37,187 Assets of discontinued operations
205,387 180,205 186,453
175,843 172,284 163,768
Total current assets 813,438 758,423
511,563 518,728
537,014 513,905 Property and equipment 531,298
536,315 545,455 510,943 505,721 505,736 Less - accumulated
depreciation and amortization 375,047 372,457
373,341 340,530
329,467 325,995 Property and equipment, net
156,251 163,858 172,114
170,413 176,254 179,741
Software, net of accumulated amortization 39,425 40,766
79,768 77,033 68,962 63,242 Goodwill 286,876 287,163 501,960
501,081 497,362 497,456 Purchased software licenses, net of
accumulated amortization 14,306 13,883 11,723 10,516 9,551 9,492
Other assets, net 13,005 13,380 38,100
36,182 33,281
31,195 1,323,301 1,277,473
1,315,228 1,313,953
1,322,424 1,295,031
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 26,599
29,781 32,982 32,632 32,232 87,186 Trade accounts payable 30,054
34,793 38,991 28,399 30,094 39,606 Accrued payroll and related
expenses 57,917 29,306 29,553 33,524 36,659 26,013 Other accrued
expenses 64,024 61,805 59,987 62,447 62,754 55,025 Acquisition
escrow payable - - 31,000 31,000 31,000 31,000 Deferred revenue
39,611 33,914 29,702 32,882 33,620 33,554 Income taxes 241 - - - -
- Liabilities of discontinued operations 74,488 69,261
69,936 62,268
57,433 50,764 Total current
liabilities 292,934 258,860 292,151
283,152 283,792
323,148 Long-term debt 280,087 271,988 263,950
255,802 247,855 184,802 Deferred income taxes 62,147 60,401
73,345 75,419 80,675 76,654 Other liabilities 5,276 6,790
7,300 9,172 6,845 12,125 Stockholders' equity: Common stock
12,584 12,644 12,707 12,723 12,794 12,847 Additional paid-in
capital 981,985 988,607 1,005,443 1,015,697 1,034,526 1,045,897
Retained earnings 602,829 595,225 593,681 597,837 591,798 590,759
Accumulated other comprehensive income 13,662 14,428 11,856 9,364
9,413 10,142 Treasury stock, at cost (928,203 ) (931,470 )
(945,205 ) (945,213 ) (945,274 )
(961,343 ) Total stockholders' equity 682,857 679,434
678,482 690,408
703,257 698,302 1,323,301
1,277,473 1,315,228
1,313,953 1,322,424 1,295,031
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands)
FY2014 06/30/14 09/30/14
12/31/14 03/31/15 FY2015
06/30/15 Cash flows from operating activities:
Net earnings (loss) 8,803 (7,604 ) (1,544 ) 4,156 (6,039 ) (11,031
) (1,039 ) Loss (earnings) from discontinued operations, net of tax
(26,143 ) (3,137 ) (5,557 ) (3,819 ) (2,998 ) (15,511 ) (4,143 )
Non-cash operating activities: Depreciation and amortization 56,900
15,920 18,257 20,510 25,760 80,447 21,775 Loss (gain) on disposal
or impairment of assets, net (2,591 ) (254 ) 47 (68 ) 1,975 1,700
241 Impairment of goodwill and other 24,953 - - - - - - Loss on
early extinguishment of debt 664 - - - - - - Deferred income taxes
10,935 (1,843 ) (4,179 ) 4,002 (2,945 ) (4,965 ) (1,522 ) Non-cash
stock compensation expense 13,206 3,925 7,725 8,450 8,216 28,316
8,123 Changes in operating assets and liabilities: Accounts
receivable (2,797 ) 11,399 (848 ) (978 ) (5,829 ) 3,744 (8,037 )
Other assets (8,609 ) 3,590 1,778 (3,959 ) 11,770 13,179 809
Deferred costs (445 ) (211 ) - (105 ) 4 (312 ) (425 ) Accounts
payable and other liabilities 14,369 (29,057 ) 967 1,411 (1,450 )
(28,129 ) (3,530 ) Deferred revenue 6,541 (8,184 )
(2,321 ) 3,290 908
(6,307 ) (255 ) Net cash provided by operating
activities 95,786 (15,456 ) 14,325
32,890 29,372
61,131 11,997 Cash flows from investing
activities: Capitalized software (24,517 ) (4,969 ) (5,608 ) (4,408
) (3,602 ) (18,587 ) (2,797 ) Capital expenditures (25,951 )
(16,778 ) (15,362 ) (10,212 ) (14,600 ) (56,952 ) (12,876 ) Data
acquisition costs (7,745 ) (635 ) (468 ) (394 ) (374 ) (1,871 )
(430 ) Payments from investments 3,823 - - - - - - Net cash paid in
acquisitions (500 ) - (265,672 )
- - (265,672 ) -
Net cash used in investing activities (54,890 ) (22,382 )
(287,110 ) (15,014 ) (18,576 )
(343,082 ) (16,103 ) Cash flows from financing
activities: Proceeds from debt 300,000 - - - - - - Payments of debt
(231,151 ) (4,917 ) (4,839 ) (8,498 ) (8,347 ) (26,601 ) (8,099 )
Fees for debt refinancing (4,370 ) - - - - - - Sale of common
stock, net of stock acquired for withholding taxes 80,490 (674 )
(1,813 ) 1,680 5,846 5,039 2,069 Tax impact of stock options,
warrants, and restricted stock (52,663 ) - (9,868 ) - - (9,868 )
(77 ) Acquisition of treasury stock 11,295 - - - 4,645 4,645
(14,951 ) Acquisition of NCI (600 ) - -
- - -
- Net cash provided (used) by financing activities
103,001 (5,591 ) (16,520 )
(6,818 ) 2,144 (26,785 ) (21,058
) Cash flows from discontinued operations: From operating
activities 69,190 17,310 11,547 9,916 5,080 43,853 11,653 From
investing activities (13,347 ) 704 (4,034 ) (2,920 ) (3,004 )
(9,254 ) (4,484 ) From financing activities (4,744 ) (585 )
(517 ) (459 ) (259 )
(1,820 ) (153 ) Net cash provided by discontinued operations
51,099 17,429 6,996
6,537 1,817 32,779
7,016 Effect of exchange rate changes on cash 616
332 (801 ) (512 )
(638 ) (1,619 ) 330 Net change
in cash and cash equivalents 195,612 (25,668 ) (283,110 ) 17,083
14,119 (277,576 ) (17,818 ) Cash and cash equivalents at beginning
of period 222,974 418,586 392,918
109,808 126,891
418,586 141,010 Cash and cash
equivalents at end of period 418,586 392,918
109,808 126,891
141,010 141,010 123,192
Supplemental cash flow information: Cash paid (received)
during the period for: Interest 11,762 2,875 2,516 809 2,473 8,673
2,185 Income taxes 21,702 297 59 182 (4,383 ) (3,845 ) (1,044 )
Prepayment of debt 215,000 - - - - - - Payments on capital leases
and installment payment arrangements 8,379 1,235 1,084 930 574
3,823 216 Other debt payments, excluding line of credit 12,516
4,267 4,272 8,027 8,032 24,598 8,036
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version on businesswire.com: http://www.businesswire.com/news/home/20150805006422/en/
Acxiom CorporationInvestor Relations:Lauren Dillard,
650-372-2242investor.relations@acxiom.comEACXM
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