EXHIBIT 99.1 [ACXIOM LOGO] For more information, contact: Robert S. Bloom Financial Relations Leader Acxiom Corporation (501) 342-1321 EACXM Acxiom® Reports Fourth-Quarter, Fiscal-Year Results Q4 EPS in line with estimates; revenue and cash flow exceed estimates LITTLE ROCK, May 12, 2004 - Acxiom® Corporation (Nasdaq:ACXM) today reported revenue and earnings for the fourth quarter of fiscal 2004 that were in line with the expectations the Company announced March 31, 2004. As projected, revenue of $277.8 million exceeded the previously estimated range of $265 million to $270 million, and diluted earnings per share of $.17 were within the previously estimated range of $.16 to $.18. Operating cash flow of $82.6 million was a record quarterly performance for the Company. Free cash flow of $57.5 million exceeded the previously estimated range of $25 million to $30 million. This year's fourth-quarter earnings include: a non-recurring pre-tax charge of approximately $4 million associated with severance costs related to the workforce reduction in the fourth quarter; pre-tax charges of $10.9 million associated with write-downs; and an after-tax benefit of $9.6 million associated with a one-time reduction in income tax expense. The impact on earnings per share of the pre-tax charges of $14.9 million was approximately offset by the after-tax benefit of the $9.6 million reduction in income tax. Fiscal 2004 revenue of $1.011 billion and diluted earnings per share of $.64 compare to $958 million in revenue and $.24 in diluted EPS in fiscal 2003. Acxiom will hold a conference call at 4:30 p.m. CDT 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. "We are pleased with our Q4 performance and particularly our cash flow, which continues to exceed our expectations," Company Leader Charles D. Morgan said. "We believe that this performance reflects the growing strength of our business, and we're also very encouraged with the progress we're making with three other critical initiatives: integrating our two European acquisitions into Acxiom's business; rolling out our new Customer Information Infrastructure grid-based solutions; and transitioning to our new organizational structure, which was designed to help us better serve clients and take advantage of our newer technologies." Highlights of Acxiom's fourth quarter include: o Revenue of $277.8 million, up 16 percent from $239.5 million in the same quarter a year ago. o Diluted earnings per share of $.17 compared to a loss per share of $.27 in the fourth quarter last year. o Operating cash flow of $82.6 million, a record performance for the Company, compared to $63.1 million generated in the fourth quarter a year ago. o Free cash flow of $57.5 million, compared to $48.7 million a year ago, marking the 11th consecutive quarter of strong free cash flow. o New contracts that will deliver $26 million in incremental annual revenue and renewals that are expected to generate $38 million in annual revenue. o Committed new deals in the pipeline that are expected to add, when closed, $58 million in annual revenue. Highlights of Acxiom's fiscal 2004 include: o Revenue of $1.011 billion, up 5.5 percent from $958 million a year ago. o Diluted earnings per share (EPS) of $.64 compared to $.24 in fiscal 2003. o Operating cash flow of $259.9 million compared to $253.8 million in fiscal 2003. o Free cash flow of $187.8 million compared to $199.0 million a year ago. o New contracts that will contribute an annual value of $107 million, compared to $96 million last year. o Contract renewals that will generate $90 million in annual revenue compared to $137 million in fiscal 2003. o The completion of the acquisitions of Claritas Europe and the Consodata operations in the UK, France and Spain. (The acquisition of Consodata Germany was completed April 13.) o Signing a strategic partnership with Accenture to help clients in the retail financial services, telecommunications, consumer products and government sectors better use customer information to improve business results. o The initiation of the first quarterly cash dividend in the Companys history. o A Company stock buyback program that included the purchase of approximately 4.4 million shares for approximately $64.5 million in the fiscal year. In the fourth quarter, Acxiom completed new contracts with several large companies, including General Motors, Bank One Corporation, Cingular Wireless and Sonoco, and renewed its long-term contract with Deluxe Corporation. Since the close of the quarter, the Company has partnered with Accenture to close a deal with a major pharmaceutical company. Fiscal 2004 Recognition In fiscal 2004 Acxiom: o Was named to the "DM Review 100" list for the fourth consecutive year. The annual list ranks the top 100 vendors of business intelligence, analytic applications and customer relationship management products. o Received the Gold SMART Award for "Best Marketing Database Software" from British business magazine Direct Response, the second year in a row Acxiom has won a gold SMART Award. o Was named to Software magazine's "Software 500" ranking for the third consecutive year. o Was selected as a finalist for the 2004 American Business Award in the "Most Innovative Company" category for its development of one of the first grid computing systems for use in large commercial applications. o Also, Charles Morgan, Acxiom's company leader, was inducted into the Arkansas Business Hall of Fame. Financial Road Map For the fiscal year ended March 31, 2005 and thereafter, the Company's expectations will be communicated in a new format. The Financial Road Map was introduced on March 31, 2004 and includes a chart summarizing the one-year and long-term goals as well as an explanation of the assumptions and definitions that accompany these goals. This Financial Road Map is attached and supercedes all previous guidance issued by the Company. The financial projections stated today are based on the Company's current expectations. These projections are forward looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed in the future. About Acxiom Acxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and Europe, and in Australia and Japan. This release (including the Financial Road Map) and the scheduled conference call include a discussion of non-GAAP financial measures. Whenever the Company reports non-GAAP financial measures, there is a reconciliation to the comparable GAAP measure attached to the press release. This release and today's conference call contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such statements include but are not necessarily limited to the following: that the projected revenue, operating margin, return on assets and return on invested capital, operating cash flow and free cash flow, borrowings and dividends referred to in the Financial Road Map will be within the estimated ranges; that the business pipeline and our current cost structure will allow us to continue to meet or exceed revenue, cash flow and other projections; that new contracts and contract renewals will generate the indicated amounts of revenue; that we have committed new deals in the pipeline that are expected to deliver the indicated amounts; that we are well positioned for success going forward; that future results will be within the indicated ranges; that new products and services will produce the expected results. The following are important factors, among others, that could cause actual results to differ materially from these forward-looking statements: The possibility that certain contracts may not be closed, or may not be closed within the anticipated time frames; the possibility that certain contracts may not generate the anticipated revenue or profitability; the possibility that negative changes in economic or other conditions might lead to a reduction in demand for our products and services; the possibility that the recovery from the previous three years' economic slowdown may take longer than expected or that economic conditions in general will not be as expected; the possibility that significant customers may experience extreme, severe economic difficulty; 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 sales cycles may lengthen; the possibility that we may not be able to attract and retain qualified technical and leadership associates, or that we may lose key associates to other organizations; the possibility that we won't be able to properly motivate our sales force or other associates; the possibility that we won't be able to achieve cost reductions and avoid unanticipated costs; the possibility that we won't be able to continue to receive credit upon satisfactory terms and conditions; the possibility that competent, competitive products, technologies or services will be introduced into the marketplace by other companies; the possibility that we may be subjected to pricing pressure due to market conditions and/or competitive products and services; the possibility that there will be changes in consumer or business information industries and markets; the possibility that we won't be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there will be changes in the legislative, accounting, regulatory and consumer environments affecting our business, including but not limited to litigation, legislation, regulations and customs relating to our ability to collect, manage, aggregate and use data; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services; the possibility that we may enter into short-term contracts which would affect the predictability of our revenues; the possibility that the amount of ad hoc, volume-based and project work will not be as expected; the possibility that we may experience a loss of data center capacity or interruption of telecommunication links or power sources; the possibility that postal rates may increase, thereby leading to reduced volumes of business; the possibility that our clients may cancel or modify their agreements with us; the possibility that the services of the United States Postal Service, their global counterparts and other delivery systems may be disrupted; the possibility that the integration of our recently acquired businesses may not be successful; and the possibility that we may be affected by other competitive factors. With respect to the Financial Road Map exhibit, all of the above factors apply, along with the following which were assumptions made in creating the Financial Road Map: that the U.S. and global economies will continue to improve at a moderate pace, that global growth will continue to be strong and that globalization trends will continue to grow at an increasing pace; relating to Operating Margin, that 1) Acxiom's computer and communications related expenses will continue to fall as a percentage of revenue, 2) that the Customer Information Infrastructure (CII) grid-based environment Acxiom has begun to implement will continue to be implemented successfully over the next 3-4 years and that the new CII infrastructure will continue to provide increasing operational efficiencies, 3) that the recent acquisitions of Claritas Europe and Consodata Europe will be successfully integrated and that significant efficiencies will be realized from this integration; relating to Operating Cash Flow and Free Cash Flow, that sufficient operating and capital lease arrangements will continue to be available to the Company to provide for the financing of most of its computer equipment and that software suppliers will continue to provide financing arrangements for most of the software purchases; relating to Revolving Credit Line Balance, that free cash flow will meet expectations and that the Company will continue to use free cash flow to pay down bank debt, buy back stock and fund dividends; relating to Annual Dividends, that the Board of Directors will continue to approve quarterly dividends and will vote to increase dividends over time; relating to Diluted Shares, that the Company will meet its cash flow expectations and that potential dilution created through the issuance of stock options and warrants will be mitigated by continued stock repurchases in accordance with the Company's stock repurchase program. With respect to the provision of products or services outside our primary base of operations in the U.S., all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations. Other factors are detailed from time to time in our periodic reports and registration statements filed with the United States Securities and Exchange Commission. We believe that we have the product and technology offerings, facilities, associates and competitive and financial resources for continued business success, but future revenues, costs, margins and profits are all influenced by a number of factors, including those discussed above, all of which are inherently difficult to forecast. We undertake no obligation to update the information contained in this press release, including the Financial Road Map or any other forward-looking statement. Acxiom is a registered trademark of Acxiom Corporation. ### ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Three Months Ended March 31, -------------------------------------------- 2004 2003 -------------------------------------------- Revenue 277,837 239,459 Operating costs and expenses: Salaries and benefits 95,914 85,988 Computer, communications and other equipment 70,465 100,686 Data costs 37,480 28,584 Other operating costs and expenses 47,116 50,124 Gains, losses and nonrecurring items, net 4,863 62 ------------------- ----------------- Total operating costs and expenses 255,838 265,444 ------------------- ----------------- Income (loss) from operations 21,999 (25,985) ------------------- ----------------- Other income (expense): Interest expense (4,911) (6,280) Other, net (7,153) (7,830) ------------------- ----------------- (12,064) (14,110) ------------------- ----------------- Earnings (loss) before income taxes 9,935 (40,095) Income taxes (5,984) (16,334) ------------------- ----------------- Net earnings (loss) 15,919 (23,761) =================== ================= Earnings per share: Basic 0.19 (0.27) =================== ================= Diluted 0.17 (0.27) =================== ================= ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Twelve Months Ended March 31, -------------------------------------------- 2004 2003 -------------------------------------------- Revenue 1,010,822 958,222 Operating costs and expenses: Salaries and benefits 347,634 316,304 Computer, communications and other equipment 267,720 296,607 Data costs 132,593 116,063 Other operating costs and expenses 168,736 179,191 Gains, losses and nonrecurring items, net 855 (5,018) ------------------- ----------------- Total operating costs and expenses 917,538 903,147 ------------------- ----------------- Income from operations 93,284 55,075 ------------------- ----------------- Other income (expense): Interest expense (19,267) (21,763) Other, net (6,724) (5,224) ------------------- ----------------- (25,991) (26,987) ------------------- ----------------- Earnings before income taxes 67,293 28,088 Income taxes 8,949 6,321 ------------------- ----------------- Net earnings 58,344 21,767 =================== ================= Earnings per share: Basic 0.68 0.25 =================== ================= Diluted 0.64 0.24 =================== ================= ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) For the Three Months Ended For the Twelve Months Ended March 31, March 31, -------------------------- --------------------------- 2004 2003 2004 2003 -------------------------- --------------------------- Basic earnings per share: Numerator - net earnings (loss) 15,919 (23,761) 58,344 21,767 Denominator - weighted-average shares outstanding 85,342 88,258 85,487 88,429 ----------- ----------- ----------- ----------- Basic earnings (loss) per share 0.19 (0.27) 0.68 0.25 =========== =========== =========== =========== Diluted earnings per share: Numerator: Net earnings (loss) 15,919 (23,761) 58,344 21,767 Interest expense on convertible bonds (net of tax benefit) 1,026 - 4,102 - ----------- ----------- ----------- ----------- 16,945 (23,761) 62,446 21,767 ----------- ----------- ----------- ----------- Denominator: Weighted-average shares outstanding 85,342 88,258 85,487 88,429 Dilutive effect of common stock options and warrants 3,025 - 2,161 2,113 Dilutive effect of convertible debt 9,589 - 9,589 - ----------- ----------- ----------- ----------- 97,956 88,258 97,237 90,542 ----------- ----------- ----------- ----------- Diluted earnings (loss) per share 0.17 (0.27) 0.64 0.24 =========== =========== =========== =========== ACXIOM CORPORATION AND SUBSIDIARIES REVENUES BY SEGMENT (Unaudited) (Dollars in thousands) For the Three Months Ended March 31, ------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------ Services 198,298 178,100 Data and Software Products 73,706 43,550 I. T. Management 62,227 61,764 Intercompany eliminations (56,394) (43,955) ------------------------------- ------------------------------- Total Revenue 277,837 239,459 =============================== =============================== For the Twelve Months Ended March 31, ------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------ Services 749,755 718,872 Data and Software Products 216,241 172,979 I. T. Management 251,463 241,096 Intercompany eliminations (206,637) (174,725) ------------------------------- ------------------------------- Total Revenue 1,010,822 958,222 =============================== =============================== ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) March 31, March 31, 2004 2003 ------------ ------------ Assets Current assets: Cash and cash equivalents $ 14,355 $ 5,491 Trade accounts receivable, net 212,387 189,704 Deferred income taxes 14,032 46,056 Refundable income taxes 2,280 2,576 Other current assets 43,272 45,288 ------------ ------------ Total current assets 286,326 289,115 ------------ ------------ Property and equipment 521,064 389,168 Less - accumulated depreciation and amortization 253,976 180,862 ------------ ------------ Property and equipment, net 267,088 208,306 ------------ ------------ Software, net of accumulated amortization 64,553 63,095 Goodwill 282,971 221,184 Purchased software licenses, net of accumulated amortization 157,217 161,432 Unbilled and notes receivable, excluding current portions 13,030 20,249 Deferred costs, net of accumulated amortization 124,653 108,444 Other assets, net 19,946 21,421 ------------ ------------ $ 1,215,784 $ 1,093,246 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term obligations 73,245 29,491 Trade accounts payable 41,527 28,760 Accrued merger, integration and impairment costs 2,881 584 Accrued payroll and related expenses 23,979 14,234 Other accrued expenses 63,411 38,689 Deferred revenue 91,060 59,907 ------------ ------------ Total current liabilities 296,103 171,665 ------------ ------------ Long-term obligations: Long-term debt and capital leases, net of current installments 239,327 233,843 Software and data licenses, net of current installments 54,130 55,834 ------------ ------------ Total long-term obligations 293,457 289,677 ------------ ------------ Deferred income taxes 39,008 69,348 Commitments and contingencies Stockholders' equity: Common stock 9,226 9,015 Additional paid-in capital 361,256 333,715 Retained earnings 308,487 253,558 Accumulated other comprehensive loss 2,940 (2,911) Treasury stock, at cost (94,693) (30,821) ------------ ------------ Total stockholders' equity 587,216 562,556 ------------ ------------ $ 1,215,784 $ 1,093,246 ============ ============= ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF FREE CASH FLOW TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands) Qtr ended Qtr ended Qtr ended Qtr ended Yr ended 6/30/2001 9/30/2001 12/31/2001 3/31/2002 3/31/2002 Net cash provided by operating activities (39,280) 69,300 60,493 60,092 150,605 Proceeds received from disposition of assets 127 - - 46 173 Capitalized software (5,935) (5,464) (5,832) (6,890) (24,121) Capital expenditures (8,789) - (2,612) (3,474) (14,875) Deferral of costs (8,690) (18,012) (14,077) (7,352) (48,131) Proceeds from sale and leaseback transaction - 1,964 4,035 - 5,999 --------------------------------------------------------------------------- Free cash flow (62,567) 47,788 42,007 42,422 69,650 =========================================================================== Qtr ended Qtr ended Qtr ended Qtr ended Yr ended 6/30/2002 9/30/2002 12/31/2002 3/31/2003 3/31/2003 Net cash provided by operating activities 60,243 53,446 76,992 63,112 253,793 Proceeds received from disposition of assets 45 155 - 93 293 Capitalized software (8,652) (8,958) (8,726) (8,237) (34,573) Capital expenditures (1,916) (3,000) (5,893) (2,403) (13,212) Deferral of costs (3,240) (4,108) (3,796) (3,883) (15,027) Proceeds from sale and leaseback transaction - 7,729 - - 7,729 --------------------------------------------------------------------------- Free cash flow 46,480 45,264 58,577 48,682 199,003 =========================================================================== Qtr ended Qtr ended Qtr ended Qtr ended Yr ended 6/30/2003 9/30/2003 12/31/2003 3/31/2004 3/31/2004 Net cash provided by operating activities 48,125 49,909 79,282 82,567 259,883 Proceeds received from disposition of assets 506 192 39 2,046 2,783 Capitalized software (6,335) (7,296) (6,510) (7,703) (27,844) Capital expenditures (1,588) (3,036) (7,637) (9,917) (22,178) Deferral of costs (6,026) (4,006) (5,312) (9,537) (24,881) --------------------------------------------------------------------------- Free cash flow 34,682 35,763 59,862 57,456 187,763 =========================================================================== ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended March 31, -------------------------------------------- 2004 2003 -------------------------------------------- Cash flows from operating activities: Net earnings (loss) 15,919 (23,761) Non-cash operating activities: Depreciation and amortization 42,496 66,548 Loss on disposal or impairment of assets, net 10,948 8,838 Deferred income taxes (9,781) (16,903) Tax benefit of stock options and interest 4,313 6,737 Changes in operating assets and liabilities: Accounts receivable 27,981 8,040 Other assets (4,560) 9,468 Accounts payable and other liabilities (7,630) 4,810 Merger, integration and impairment costs 2,881 (665) ------------------- --------------------- Net cash provided by operating activities 82,567 63,112 ------------------- --------------------- Cash flows from investing activities: Proceeds received from the disposition of operations - 638 Proceeds received from the disposition of assets 2,046 93 Capitalized software (7,703) (8,237) Capital expenditures (9,917) (2,403) Investments in joint ventures and other companies - (125) Deferral of costs (9,537) (3,883) Payments received from investments 159 - Net cash paid in acquisitions (55,591) - ------------------- --------------------- Net cash used by investing activities (80,543) (13,917) ------------------- --------------------- Cash flows from financing activities: Proceeds from debt 48,698 78,489 Payments of debt (53,138) (168,916) Dividends paid (3,415) - Sale of common stock 10,908 3,708 Acquisition of treasury stock (8,423) (23,335) ------------------- --------------------- Net cash used by financing activities (5,370) (110,054) ------------------- --------------------- Effect of exchange rate changes on cash 53 (52) ------------------- --------------------- Net increase (decrease) in cash and cash equivalents (3,293) (60,911) Cash and cash equivalents at beginning of period 17,648 66,402 ------------------- --------------------- Cash and cash equivalents at end of period 14,355 5,491 =================== ===================== Supplemental cash flow information: Cash paid (received) during the period for: Interest 6,692 8,919 Income taxes 3,886 375 Noncash investing and financing activities: Issuance of warrants 2,000 1,317 Enterprise software licenses acquired under long-term obligation 5,500 - Acquisition of property and equipment under capital lease 20,323 4,494 Construction of assets under construction loan 4,191 - =================== ===================== ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Twelve Months Ended March 31, -------------------------------------------- 2004 2003 -------------------------------------------- Cash flows from operating activities: Net earnings 58,344 21,767 Non-cash operating activities: Depreciation and amortization 150,241 154,902 Loss (gain) on disposal or impairment of assets, net 9,940 8,799 Deferred income taxes 6,895 7,020 Tax benefit of stock options and interest 4,313 6,894 Changes in operating assets and liabilities: Accounts receivable 25,594 3,999 Other assets 7,434 63,271 Accounts payable and other liabilities (5,175) (10,422) Merger, integration and impairment costs 2,297 (2,437) ------------------- --------------------- Net cash provided by operating activities 259,883 253,793 ------------------- --------------------- Cash flows from investing activities: Proceeds received from the disposition of operations 7,684 1,089 Proceeds received from the disposition of assets 2,783 293 Payments received from investments 1,678 - Capitalized software (27,844) (34,573) Capital expenditures (22,178) (13,212) Investments in joint ventures and other companies (5,000) (1,177) Deferral of costs (24,881) (15,027) Proceeds from sale and leaseback transaction - 7,729 Net cash paid in acquisitions (55,591) (14,105) ------------------- --------------------- Net cash used by investing activities (123,349) (68,983) ------------------- --------------------- Cash flows from financing activities: Proceeds from debt 149,687 161,005 Payments of debt (231,618) (337,399) Dividends paid (3,415) - Sale of common stock 21,892 18,061 Acquisition of treasury stock (64,470) (26,734) ------------------- --------------------- Net cash used by financing activities (127,924) (185,067) ------------------- --------------------- Effect of exchange rate changes on cash 254 72 ------------------- --------------------- Net increase (decrease) in cash and cash equivalents 8,864 (185) Cash and cash equivalents at beginning of period 5,491 5,676 ------------------- --------------------- Cash and cash equivalents at end of period 14,355 5,491 =================== ===================== Supplemental cash flow information: Cash paid (received) during the period for: Interest 20,189 26,347 Income taxes 2,900 (40,045) Noncash investing and financing activities: Notes payable, common stock and warrants issued for acquisitions - 28,486 Acquisition of land in exchange for debt 2,698 - Acquisition of data under long-term obligation 18,340 - Note received in exchange for sale of operations - 1,326 Issuance of warrants 2,000 1,317 Enterprise software licenses acquired under long-term obligation 16,635 2,828 Acquisition of property and equipment under capital lease 80,518 14,139 Construction of assets under construction loan 11,045 - =================== ===================== ACXIOM CORPORATION Financial Road Map(1) (as of May 12, 2004) The Financial Road Map has been updated to show actual results for fiscal 2004. The target for Fiscal 2005 has been updated and the long-term goals for fiscal 2008 have not changed. --------------------- --------------------- --------------------- --------------------- Actual(2) Actual(3) Target Long-Term Goals Years Ending March 31, Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2008 --------------------- --------------------- --------------------- --------------------- U.S. Revenue Growth 10.1% 2.7% 7.0% to 11.0% 7.0% to 10.0% (CAGR) U.S. Revenue $903 million $926 million $991 to $1,028 million - International Revenue Growth 19.3% 51.3% - 14.0% to 18.0% (CAGR) International Revenue $55 million $85 million $220 to $261 million - U.S. Operating Margin 6.2% 9.8% 11.5% to 12.0% 15.0% to 16.0% International Operating Margin (0.8%) 3.1% 8.0% to 11.0% 18.0% to 20.0% Return on Assets 4.8% 8.2% 10.0% to 12.0% 14.0% to 16.0% Return on Invested Capital 6.1% 9.4% 12.0% to 14.0% 16.0% to 19.0% Operating Cash Flow $254 million $260 million $220 to $260 million $220 to $260 million Free Cash Flow $199 million $188 million $160 to $180 million $160 to $180 million Revolving Credit Line Balance $29 million $16 million Less than $150 million Less than $200 million Annual Dividends Per Share $0.00 0.04(4) $0.16 $0.20 to $0.24 - ------------------------------ 1 Assumptions and definitions are defined on the following schedule: "Financial Road Map assumptions and definitions" 2 The Fiscal 2003 results include $5.0 million income recorded in gains, losses and nonrecurring items, net and $30.6 million of write-downs related to impairment of software and long-lived assets. 3 The Fiscal 2004 results include $0.9 million expense recorded in gains, losses and nonrecurring items, net and $2.8 million related to a write-down of a third-party software package. 4 Acxiom declared its first quarterly dividend in the fourth quarter of Fiscal 2004. ACXIOM CORPORATION Financial Road Map Assumptions and Definitions Assumptions 1. The effective tax rate is projected to be approximately 38% for future years. 2. Investing activities (including capital expenditures, deferred costs and capitalized software) will be $60 million to $80 million for each of the years presented. 3. Interest rates will remain at approximately the current levels. 4. The Company will utilize all of its tax loss carry forwards and begin to pay U.S. federal and state income taxes during FY06. 5. The Company will pay incentives under its bonus plan of approximately $15 million to $25 million for each of the years beginning in fiscal 2005. 6. The Company will maintain a relatively constant mix of business for each of our three business segments (Services, Data and IT outsourcing). 7. Foreign exchange rates will remain at approximately the current levels. 8. Stock repurchases will be in amounts that yield the highest shareholder return considering all other uses for the available cash. 9. Diluted outstanding shares will increase slightly to reflect the impact of in-the-money options as the stock price increases. 10. Long-term goals are based on the Company's current assessment of opportunities and are subject to change. There are risks associated with obtaining these goals which are explained under forward looking statements in the press release accompanying this Financial Road Map. Acxiom disclaims any obligation to update the information contained in this Financial Road Map. Definitions 1. Revenue Growth is defined as the percentage growth compared to the previous corresponding fiscal year or quarter. 2. Operating Margin is defined as the income from operations as a percentage of revenue. 3. Return on Assets (ROA) is defined as income from operations divided by average total assets for the trailing four quarters. 4. Return on Invested Capital (ROIC) is defined as income from operations adjusted for the implied interest expense included in operating leases divided by the trailing four quarters average invested capital. The implied interest adjustment for operating leases is calculated by multiplying the average quarterly balances of the present value of operating leases [(beginning balance + ending balance)/2] x an 8% implied interest rate on the leases. Average invested capital is defined as the trailing 4 quarter average of the ending quarterly balances for total assets less cash, less non-interest bearing liabilities, plus the present value of operating leases. 5. Operating Cash Flow is as shown on the Company's cash flow statement. 6. Free Cash Flow is defined as cash flow from operating activities less cash flow from investing activities excluding net cash paid or received for acquisitions and divestitures, joint ventures and investments. 7. Revolving Credit Line Balance is defined as actual funds borrowed under the Company's revolving line of credit facility at the end of the fiscal year. 8. Annual Dividends Per Share is defined as the sum of the four quarterly dividends for that fiscal year. ACXIOM CORPORATION Reconciliation of Non-GAAP Measurements (Dollars in thousands) ----------- ----------- -------------------- -------------------- Actual Actual Target Long-Term Goals Years Ending March 31, Fiscal 2003 Fiscal 2004 Fiscal 2005 Fiscal 2008 ----------- ----------- -------------------- -------------------- Free Cash Flow Net cash provided by operating activities 253,793 259,883 220,000 260,000 220,000 260,000 Proceeds received from disposition of assets 293 2,783 0 0 0 0 Capitalized software (34,573) (27,844) (26,000) (28,000) (26,000) (28,000) Capital expenditures (13,212) (22,178) (16,000) (25,000) (16,000) (25,000) Deferral of costs (15,027) (24,881) (18,000) (27,000) (18,000) (27,000) Proceeds from sale and leaseback transaction 7,729 0 0 0 0 0 ----------- ----------- -------- -------- -------- -------- Free cash flow 199,003 187,763 160,000 to 180,000 160,000 to 180,000 =========== =========== ======= ======== ======== ======== Free cash flow as defined by the Company, may not be comparable to similarly titled measures reported by other companies. Management of the Company has included free cash flow in this Financial Road Map because although free cash flow does not represent the amount of money available for the Company's discretionary spending since certain obligations of the Company must be funded out of free cash flow, management believes that it provides investors with a useful alternative measure of liquidity by allowing an assessment of the amount of cash available for general corporate and strategic purposes, including debt payments, after funding operating activities and capital expenditures, capitalized software expenses and deferred costs. The above table reconciles free cash flow to cash provided by operating activities, the nearest comparable GAAP measure. - ----------------------------------------------------------------------------------------------------------------------------------- Return on Assets (ROA) and Return on Invested Capital (ROA) (ROIC) ROA ROIC ROA ROIC ROA ROIC --------- --------- --------- --------- ------------------- ------------------- ------------------- ------------------- Numerator: Income from operations 55,075 55,075 93,284 93,284 131,000 155,000 131,000 155,000 221,000 272,000 221,000 272,000 Add implied interest on operating leases (1) 15,170 13,557 16,000 16,000 21,000 21,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 55,075 70,245 93,284 106,841 131,000 155,000 147,000 171,000 221,000 272,000 242,000 293,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Denominator: Average total assets (2) 1,138,968 1,138,968 1,143,120 1,143,120 1,250,000 1,300,000 1,250,000 1,300,000 1,600,000 1,700,000 1,600,000 1,700,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Less average cash (3) (25,141) (10,129) (5,000) (5,000) (100,000) (200,000) Less average non- interest bearing current liabilities (4) (139,226) (166,175) (220,000) (230,000) (240,000) (240,000) Plus average present value of operating leases (1) 185,222 171,422 201,000 201,000 258,000 258,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 1,138,968 1,159,823 1,143,120 1,138,238 1,250,000 1,300,000 1,226,000 1,266,000 1,600,000 1,700,000 1,518,000 1,518,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Return on invested capital 4.8% 6.1% 8.2% 9.4% 10.5% to 11.9% 12.0% to 13.5% 13.8% to 16.0% 15.9% to 19.3% ========= ========= ========= ========= ========= ========= ========= ========= ========= ========= ========= ========= Notes ----- 1 Average present value of operating leases is the average for the trailing 4 quarter ends of the present value of future payments on operating leases, discounted at 8% which is the assumed implicit interest rate included in the leases. The implied interest added to the numerator is the 8% assumed interest charge on the average quarterly balance [(beginning + Ending) / 2] of the present value of the leases. 2 Average total assets is the average of the GAAP amount for the trailing 4 quarter ends. 3 Average cash is the average of the GAAP amount for the trailing 4 quarter ends. 4 Average non-interest bearing current liabilities is the average for the trailing 4 quarter ends of all current liabilities excluding the current portion of long-term debt. Return on Invested Capital (ROIC) as defined by the Company, may not be comparable to similarly titled measures reported by other companies. Management of the Company has included ROIC in this Financial Road Map because it measures the capital efficiency of our business. ROIC does not consider whether the business is financed with debt or equity; rather ROIC calculates a return on all capital invested in the business. The above table reconciles ROIC to a ROA calculation using GAAP numbers. The Company uses ROIC in a number of ways, including pricing analysis, capital expenditure evaluation, and merger and acquisition valuation.
LiveRamp (RAMP) 8-KFinancial statements and exhibits
Filed: 12 May 04, 12:00am