EXHIBIT 99.1 [ACXIOM LOGO] For more information, contact: Robert S. Bloom Financial Relations Leader Acxiom Corporation (501) 342-1321 EACXM Acxiom® Announces Second-Quarter Results Significant year-over-year growth achieved in revenue, earnings LITTLE ROCK, Ark - October 20, 2004 - Acxiom® Corporation (Nasdaq: ACXM) today announced financial results for the second quarter of fiscal 2005 ended September 30, 2004. Revenue of $299.1 million, income from operations of $34.4 million, pre-tax earnings of $29.8 million and diluted earnings per share of $.20 all represent significant improvements compared to the same quarter a year ago. 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 second-quarter performance, which keeps us solidly on track to meet the financial goals we have communicated in our Financial Road Map," Company Leader Charles D. Morgan said. "We are particularly encouraged with the growth in our U.S. operations, with revenue up 11 percent and operating income up 58 percent compared to the same quarter last year." Highlights of Acxiom's second-quarter performance include: o Revenue of $299.1 million, up 24 percent from $241.1 million in the second quarter a year ago. Acquisitions contributed 12 percentage points of this 24 percentage-point growth in revenue. o Income from operations of $34.4 million, an increase of 51 percent compared to $22.7 million in the second quarter last year. o Pre-tax earnings of $29.8 million, an increase of 66 percent compared to $17.9 million in the second quarter a year ago. o Diluted earnings per share of $.20, up 54 percent from $.13 the year before. o Operating cash flow of $61.7 million and free cash flow of $41.1 million. The free cash flow of $41.1 million is a non-GAAP financial measure and a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release. o New contracts that are expected to deliver $43 million in annual revenue and renewals that total $71 million in annual revenue. o Committed new deals in the pipeline that are expected to generate $71 million in annual revenue. Morgan noted that Acxiom recently completed contracts with Information Resources, Inc. (IRI); TransUnion; Accenture; MGM MIRAGE; GE Consumer Finance; E-LOAN®; Southeast Toyota Distributors, LLC; Ziff Davis Media, Inc.; CopperKey Inc.; and Wolters Kluwer Health. "We were very pleased with the new business we won in the quarter," Morgan said. "Many of these deals are significant for Acxiom and our future. The relationship with IRI takes our integrated outsourcing value proposition to a new level, as we'll use our Customer Information Infrastructure (CII) grid-based solutions architecture to transform the way IRI builds and delivers its data products. And we're also beginning to deploy CII in a limited capacity at TransUnion, our long-time business partner with whom we have recently completed a five-year extension of our data center outsourcing agreement." Recognition Acxiom recently: o Was included in CIO magazine's "CIO 100," which recognizes organizations around the world that exemplify the highest level of operational and strategic excellence in information technology. o Was named one of the "Best Places to Work in Information Technology" by Computerworld magazine. o Won the "CRM Data Quality Market Leader" award from CRM magazine. o Was named "2004 Best Practices Award" winner for "Radical Data Warehousing/Business Intelligence" by The Data Warehousing Institute. o Received Sonoco's "Supplier of the Year" Award. o Was honored as a member of the InformationWeek 500, which recognizes the most innovative corporate users of information technology. Organizational Changes Effective January 1, 2005, a new "Office of the Company Leader" will be established and two new positions are being created within that office, namely, Chief Finance & Administration Leader and Chief Operations Leader. Rodger S. Kline, currently serving as Company Operations Leader, will be appointed as Chief Finance & Administration Leader and will serve as the Company's principal financial and accounting officer. L. Lee Hodges, currently the Company's Outsourcing & IT Services Leader, will be appointed as Chief Operations Leader. The "Office of the Company Leader" will be headed by Charles Morgan, Chairman and Company Leader, and will include Mr. Kline and Mr. Hodges. All of the Company's organizations and functions will report to Messrs. Morgan, Kline or Hodges. James T. Womble, currently Client Services Organization Leader for financial services, government and health, will be appointed as Global Business Development Leader, a new position which will be focused on the continued expansion of the Company's global business opportunities. Jefferson D. Stalnaker, currently serving as Company Financial Operations Leader, will be appointed as Client Services Organization Leader for financial services, government and health. "These changes position us to better capitalize on our many growth opportunities," Morgan said. "Jim's experience will be very valuable as we continue to expand our business globally. Lee will help us very tightly coordinate sales, client service and delivery, ensuring we maximize effectiveness, efficiency and growth in all operational areas of our business. Jeff has done a great job as a financial leader over the past several years and will now expand his scope and responsibility. Rodger has previously served as our principal financial officer and has been in that role or one closely associated with it for more than ten years and will provide continuity in our financial operations. I am very excited about these organizational changes and the positive impact they will have on our business." Outlook For the fiscal year ended March 31, 2005 and thereafter, the Company's expectations are communicated in the attached Financial Road Map, which includes a chart summarizing the Company's one-year and long-term goals as well as an explanation of the assumptions and definitions that accompany these goals. 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 and do not include the impact of the expensing of employee stock options which is currently proposed by the FASB. 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 references to 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 may 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 company is on track for a successful year and is currently operating in line with the Financial Road Map; 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 and improving margins 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 changes in accounting pronouncements (including the proposed accounting pronouncement changes which will require expensing of stock option grants and other equity compensation awards) may occur and may impact these projections; 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 we may experience failures or breaches of our network and data security systems, leading to potential adverse publicity, negative customer reaction, or liability to third parties; 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 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 we experience processing errors which result in credits to customers, re-performance of services or payment of damages to customers; 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 as successful as planned; 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; that Acxiom's computer and communications related expenses will continue to fall as a percentage of revenue; 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; 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 September 30, ------------------------------------------ 2004 2003 ------------------------------------------ Revenue: Services 220,072 190,098 Data 79,037 50,998 --------------- --------------- Total revenue 299,109 241,096 Operating costs and expenses: Cost of revenue Services 168,950 154,429 Data 49,768 36,556 --------------- --------------- Total cost of revenue 218,718 190,985 Selling, general and administrative 46,020 27,395 --------------- --------------- Total operating costs and expenses 264,738 218,380 --------------- --------------- Income from operations 34,371 22,716 --------------- --------------- Other income (expense): Interest expense (4,743) (4,889) Other, net 205 121 --------------- --------------- Total other income (expense) (4,538) (4,768) --------------- --------------- Earnings before income taxes 29,833 17,948 Income taxes 11,337 6,731 --------------- --------------- Net earnings 18,496 11,217 =============== =============== Earnings per share: Basic 0.22 0.13 =============== =============== Diluted 0.20 0.13 =============== =============== ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Six Months Ended September 30, ------------------------------------------ 2004 2003 ------------------------------------------ Revenue: Services 427,919 382,612 Data 160,184 95,166 --------------- --------------- Total revenue 588,103 477,778 Operating costs and expenses: Cost of revenue Services 332,499 313,184 Data 101,587 71,193 --------------- --------------- Total cost of revenue 434,086 384,377 Selling, general and administrative 94,549 60,459 Gains, losses and nonrecurring items, net (344) (1,008) --------------- --------------- Total operating costs and expenses 528,291 443,828 --------------- --------------- Income from operations 59,812 33,950 --------------- --------------- Other income (expense): Interest expense (9,813) (9,654) Other, net 614 886 --------------- --------------- Total other income (expense) (9,199) (8,768) --------------- --------------- Earnings before income taxes 50,613 25,182 Income taxes 19,233 2,702 --------------- --------------- Net earnings 31,380 22,480 =============== =============== Earnings per share: Basic 0.36 0.26 =============== =============== Diluted 0.34 0.25 =============== =============== ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) For the Three Months Ended September 30, ------------------------------------- 2004 2003 ------------------------------------- Basic earnings per share: Numerator - net earnings 18,496 11,217 Denominator - weighted-average shares outstanding 86,010 85,236 -------------- --------------- Basic earnings per share 0.22 0.13 ============== =============== Diluted earnings per share: Numerator: Net earnings 18,496 11,217 Interest expense on convertible bonds (net of tax benefit) 1,017 1,026 -------------- --------------- 19,513 12,243 -------------- --------------- Denominator: Weighted-average shares outstanding 86,010 85,236 Dilutive effect of common stock options and warrants 3,464 1,937 Dilutive effect of convertible debt 9,589 9,589 -------------- --------------- 99,063 96,762 -------------- --------------- Diluted earnings per share 0.20 0.13 ============== =============== ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) For the Six Months Ended September 30, ------------------------------------- 2004 2003 ------------------------------------- Basic earnings per share: Numerator - net earnings 31,380 22,480 Denominator - weighted-average shares outstanding 86,047 85,839 -------------- --------------- Basic earnings per share 0.36 0.26 ============== =============== Diluted earnings per share: Numerator: Net earnings 31,380 22,480 Interest expense on convertible bonds (net of tax benefit) 2,034 2,051 -------------- --------------- 33,414 24,531 -------------- --------------- Denominator: Weighted-average shares outstanding 86,047 85,839 Dilutive effect of common stock options and warrants 3,709 1,770 Dilutive effect of convertible debt 9,589 9,589 -------------- --------------- 99,345 97,198 -------------- --------------- Diluted earnings per share 0.34 0.25 ============== =============== ACXIOM CORPORATION AND SUBSIDIARIES REVENUES BY SEGMENT (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, ------------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------------ US Services & Data 188,105 169,031 International Services & Data 47,893 15,037 IT Management 69,325 60,967 Intercompany eliminations (6,214) (3,939) --------------------------------- ---------------------------------- Total Revenue 299,109 241,096 ================================= ================================== For the Six Months Ended September 30, ------------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------------ US Services & Data 363,069 331,141 International Services & Data 101,335 28,620 IT Management 132,594 122,912 Intercompany eliminations (8,895) (4,895) --------------------------------- ---------------------------------- Total Revenue 588,103 477,778 ================================= ================================== ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30, March 31, 2004 2004 ------------ ------------ Assets Current assets: Cash and cash equivalents $ 10,140 $ 14,355 Trade accounts receivable, net 236,862 212,387 Deferred income taxes 14,288 14,032 Refundable income taxes 915 2,280 Other current assets 48,136 43,272 ------------ ------------ Total current assets 310,341 286,326 ------------ ------------ Property and equipment 536,578 521,064 Less - accumulated depreciation and amortization 243,700 253,976 ------------ ------------ Property and equipment, net 292,878 267,088 ------------ ------------ Software, net of accumulated amortization 60,214 64,553 Goodwill 312,168 282,971 Purchased software licenses, net of accumulated amortization 152,206 157,217 Unbilled and notes receivable, excluding current portions 15,675 13,030 Deferred costs, net 84,210 88,096 Data acquisition costs 45,009 36,557 Other assets, net 13,273 19,946 ------------ ------------ $ 1,285,974 $ 1,215,784 =================== =================== Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term obligations 79,585 73,245 Trade accounts payable 50,778 41,527 Accrued merger, integration and impairment costs 190 2,881 Accrued payroll and related expenses 23,791 23,979 Other accrued expenses 70,902 63,411 Deferred revenue 86,053 91,060 ------------ ------------ Total current liabilities 311,299 296,103 ------------ ------------ Long-term obligations: Long-term debt and capital leases, net of current installments 265,830 239,327 Software and data licenses, net of current installments 41,268 54,130 ------------ ------------ Total long-term obligations 307,098 293,457 ------------ ------------ Deferred income taxes 58,892 39,008 Commitments and contingencies Stockholders' equity: Common stock 9,352 9,226 Additional paid-in capital 384,615 361,256 Retained earnings 332,972 308,487 Accumulated other comprehensive loss 3,608 2,940 Treasury stock, at cost (121,862) (94,693) ------------ ------------ Total stockholders' equity 608,685 587,216 ------------ ------------ $ 1,285,974 $ 1,215,784 =================== =================== 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 ========== ========== ========== ============ ========== Qtr ended Qtr ended 6/30/2004 9/30/2004 Net cash provided by operating activities 34,714 61,742 Capitalized software (4,107) (4,721) Capital expenditures (1,823) (4,813) Deferral of costs (9,610) (11,113) ---------- ---------- Free cash flow 19,174 41,095 ========== ========== ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, ------------------------------------------------ 2004 2003 ------------------------------------------------ Cash flows from operating activities: Net earnings 18,496 11,218 Non-cash operating activities: Depreciation and amortization 45,102 37,140 Deferred income taxes 10,699 - Changes in operating assets and liabilities: Accounts receivable (7,488) (1,199) Other assets (7,434) 6,765 Accounts payable and other liabilities 2,548 (3,600) Merger, integration and impairment costs (181) (415) ------------ ------------ Net cash provided by operating activities 61,742 49,909 ------------ ------------ Cash flows from investing activities: Proceeds received from the disposition of assets - 192 Capitalized software (4,721) (7,296) Capital expenditures (4,813) (3,036) Deferral of costs (11,113) (4,006) Payments received from investments 219 159 Net cash paid in acquisitions (11,181) - ------------ ------------ Net cash used by investing activities (31,609) (13,987) ------------ ------------ Cash flows from financing activities: Proceeds from debt 59,203 29,286 Payments of debt (75,049) (50,233) Dividends paid (3,446) - Sale of common stock 4,354 3,859 Acquisition of treasury stock (16,397) (20,032) ------------ ------------ Net cash used by financing activities (31,335) (37,120) ------------ ------------ Effect of exchange rate changes on cash 128 (15) ------------ ------------ Net decrease in cash and cash equivalents (1,074) (1,213) Cash and cash equivalents at beginning of period 11,214 4,862 ------------ ------------ Cash and cash equivalents at end of period 10,140 3,649 ------------ ------------ Supplemental cash flow information: Cash paid (received) during the period for: Interest 6,554 6,794 Income taxes 8 (2,533) Noncash investing and financing activities: Enterprise software licenses acquired under long-term obligation 3,282 991 Acquisition of property and equipment under capital lease and installment payment arrangements 18,572 14,531 Construction of assets under construction loan 6,323 2,610 ------------ ------------ ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, ------------------------------------------------ 2004 2003 ------------------------------------------------ Cash flows from operating activities: Net earnings 31,380 22,481 Non-cash operating activities: Depreciation and amortization 89,099 71,036 Loss on disposal or impairment of assets, net - (1,008) Deferred income taxes 19,548 (6,742) Changes in operating assets and liabilities: Accounts receivable (26,149) 4,810 Other assets (8,446) 8,826 Accounts payable and other liabilities (6,285) (815) Merger, integration and impairment costs (2,691) (554) ------------ ------------ Net cash provided by operating activities 96,456 98,034 ------------ ------------ Cash flows from investing activities: Proceeds received from the disposition of operations - 7,684 Proceeds received from the disposition of assets - 698 Capitalized software (8,828) (13,631) Capital expenditures (6,636) (4,624) Investments in joint ventures and other companies - (5,000) Deferral of costs (20,723) (10,032) Payments received from investments 503 1,360 Net cash paid in acquisitions (16,741) - ------------ ------------ Net cash used by investing activities (52,425) (23,545) ------------ ------------ Cash flows from financing activities: Proceeds from debt 98,129 82,473 Payments of debt (135,609) (110,888) Dividends paid (6,895) - Sale of common stock 23,671 6,709 Acquisition of treasury stock (27,368) (54,697) ------------ ------------ Net cash used by financing activities (48,072) (76,403) ------------ ------------ Effect of exchange rate changes on cash (174) 72 ------------ ------------ Net decrease in cash and cash equivalents (4,215) (1,842) Cash and cash equivalents at beginning of period 14,355 5,491 ------------ ------------ Cash and cash equivalents at end of period 10,140 3,649 ------------ ------------ Supplemental cash flow information: Cash paid (received) during the period for: Interest 9,888 10,302 Income taxes 108 (1,556) Noncash investing and financing activities: Acquisition of land in exchange for debt - 2,698 Acquisition of data under long-term obligation - 18,340 Enterprise software licenses acquired under long-term obligation 5,967 9,212 Acquisition of property and equipment under capital lease and installment payment arrangements 39,070 31,334 Construction of assets under construction loan 13,111 2,610 ------------ ------------ ACXIOM CORPORATION Financial Road Map 1 ------------------- (as of Sep 30, 2004) ------------- -------------- --------------- ---------------------- -------------------- Actual 2 Actual Actual Target Long-Term Goals Years Ending March 31, Fiscal 2004 Q2 Fiscal 2005 YTD Fiscal 2005 Fiscal 2005 Fiscal 2008 ------------- -------------- --------------- ---------------------- -------------------- U.S. Revenue Growth 2.7% 11.1% 8.4% 7.0% to 11.0% 7.0% to 10.0% (CAGR) U.S. Revenue $926 million $251 million $487 million $991 to $1,028 million - International Revenue Growth 51.3% 218.5% 254.1% - 14.0% to 18.0% (CAGR) International Revenue $85 million $48 million $101 million $220 to $240 million - U.S. Operating Margin 9.8% 13.9% 11.8% 11.5% to 12.0% 15.0% to 16.0% International Operating Margin 3.1% -1.3% 2.2% 8.0% to 11.0% 18.0% to 20.0% Return on Assets 8.2% 9.7% 3 9.7% 3 10.0% to 12.0% 14.0% to 16.0% Return on Invested Capital 9.4% 11.3% 3 11.3% 3 12.0% to 14.0% 16.0% to 19.0% Operating Cash Flow $260 million $62 million $96 million $220 to $260 million $220 to $260 million Free Cash Flow $188 million $41 million $60 million $160 to $180 million $160 to $180 million Revolving Credit Line Balance $16 million $22 million $22 million Less than $150 million Less than $200 million Dividends Per Share $0.04 4 $0.04 $0.08 $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 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. 3 ROA and ROIC for Q2 & YTD of Fiscal 2005 are calculated on a trailing 4 quarters basis. Results for the trailing 4 quarters ending Q2 of Fiscal 2005 include $4.5 million of restructuring charges, $3.7 million of asset impairment charges, partially offset by $3.9 million of recovery of previous charges on a bankrupt customer. 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 its three business segments. 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 comparable period. 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 four-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 period. 8. Dividends Per Share is defined as the sum of the dividends for that period. ACXIOM CORPORATION Reconciliation of Non-GAAP Measurements --------------------------------------- (Dollars in thousands) ----------- -------------- --------------- ----------------- ------------------ Actual Actual Actual Target Long-Term Goals Years Ending March 31, Fiscal 2004 Q2 Fiscal 2005 YTD Fiscal 2005 Fiscal 2005 Fiscal 2008 ----------- -------------- --------------- ----------------- ------------------ Free Cash Flow - -------------- Net cash provided by operating activities 259,883 61,742 96,456 220,000 260,000 220,000 260,000 Proceeds received from disposition of assets 2,783 0 0 0 0 0 0 Capitalized software (27,844) (4,721) (8,828) (26,000) (28,000) (26,000) (28,000) Capital expenditures (22,178) (4,813) (6,636) (16,000) (25,000) (16,000) (25,000) Deferral of costs (24,881) (11,113) (20,723) (18,000) (27,000) (18,000) (27,000) ------------ ------------- --------------- -------- -------- -------- -------- Free cash flow 187,763 41,095 60,269 160,000 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 ROA ROIC ROA ROIC ROA ROIC ROA ROIC ROA ROIC Return on Invested Capital (ROIC) --------- --------- --------- --------- --------- --------- -------------------- -------------------- -------------------- -------------------- (5) (5) (5) (5) Numerator: Income from operations 93,284 93,284 119,153 119,153 119,153 119,153 131,000 155,000 131,000 155,000 221,000 272,000 221,000 272,000 Add implied interest on operating leases (1) 13,557 12,981 12,981 16,000 16,000 21,000 21,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 93,284 106,841 119,153 132,134 119,153 132,134 131,000 155,000 147,000 171,000 221,000 272,000 242,000 293,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Denominator: Average total assets (2) 1,143,120 1,143,120 1,224,411 1,224,411 1,224,411 1,224,411 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 (10,129) (13,339) (13,339) (5,000) (5,000) (100,000) (200,000) Less average non-interest bearing current liabilities (4) (166,175) (207,093) (207,093) (220,000) (230,000) (240,000) (240,000) Plus average present value of operating leases (1) 171,422 170,234 170,234 201,000 201,000 258,000 258,000 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 1,143,120 1,138,238 1,224,411 1,174,212 1,224,411 1,174,212 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 8.2% 9.4% 9.7% 11.3% 9.7% 11.3% 10.5% to 11.9% 12.0% to 1 3.5% 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. 5 ROA and ROIC for Q2 and YTD of Fiscal 2005 are calculated on a trailing 4 quarters basis and are therefore the same. 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-KResults of Operations and Financial Condition
Filed: 20 Oct 04, 12:00am