LiveRamp (RAMP) 8-K Acxiom Announces Third Quarter Results

 

For more information, contact:

Katharine Boyce

Acxiom Investor Relations

501-342-1321

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES THIRD QUARTER RESULTS

U.S. marketing and data services revenue up 4 percent

LITTLE ROCK, Ark. – January 30, 2013— Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced financial results for its third quarter ended December 31, 2012.

Revenue from continuing operations was $273 million, down 3 percent compared to $281 million for the prior-year period. Income from continuing operations increased 73 percent to $27 million in the current quarter, compared to $16 million in the prior year. Excluding unusual items, operating income for the quarter decreased 13 percent as compared to $31 million in the prior year. Marketing and data services revenue increased slightly to $190 million, compared to $187 million; U.S. marketing and data services revenue increased 4 percent to $160 million, compared to $155 million. As expected, IT infrastructure management revenue decreased 9 percent to $70 million in the current quarter compared to $77 million. Earnings per diluted share attributable to Acxiom stockholders were up 90 percent in the current quarter to $0.19, compared to diluted earnings per share in the prior-year quarter of $0.10. Diluted earnings per share decreased 14 percent as compared to $0.22, excluding unusual items in the prior-year quarter.

Operating cash flow was $132 million for the trailing twelve months, compared to $215 million for the comparable period a year ago. Free cash flow to equity increased slightly to $117 million for the trailing twelve months, compared to $115 million for the comparable period. Free cash flow to equity for the trailing twelve months included $73 million in proceeds from the sale of the company’s background screening business. Both operating cash flow and free cash flow to equity were down as a result of higher working capital and increased tax payments.  Free cash flow available to equity is a non-GAAP financial measure.A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

“Revenue from our top 100 U.S. marketing and data services customers was up over 7 percent this quarter and up over 9 percent year to date,” said Acxiom CEO Scott Howe. “While we are pleased with this performance, we also recognize we have work to do in order to further expand our client base and reignite growth with our small and mid-tier customers.”

Third Quarter Highlights:

·   Acxiom continues to invest in its new digital products suite. During the quarter, the company released the following new products: InfoBase data for major ad platforms and over 1,500 predictive models for 10 major industry verticals. The company intends to hold a product briefing with investors on March 6 in New York City. The briefing will be presented by Dr. Phil Mui, key members of the engineering team and Nada Stirratt, the company’s Chief Revenue Officer.

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·   Acxiom repurchased 1,040,000 shares for $18.3 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 9.9 million shares, or approximately 12 percent of the outstanding common stock, for $131 million. The company has remaining capacity of approximately $19 million out of the total stock repurchase authorization of $150 million.

·   Acxiom announced its annual invitation-only client forum known as Engage to be held on March 6-8 in New York City. Over 200 top clients and prospects are registered to attend the conference which provides the opportunity for the world’s largest marketers to discuss case studies and new technologies. President Bill Clinton will deliver the keynote address and statistician Nate Silver will also be featured.

·   Acxiom appointed Dana Hayes, Jr. as Group VP of Partner Development. Hayes will lead efforts to build strategic partnerships and distribution relationships for global data driven marketing and advertising. He has more than 15 years of experience in digital media and marketing in leadership roles with companies such as weather.com and Tribune Company.

Segment Results:

·   Marketing and Data Services: Revenue for the third quarter increased slightly to $190 million, as compared to $187 million for the same period a year ago. U.S. revenue of $160 million increased 4 percent but was offset by declines internationally. Income from operations for the third quarter was $18 million, compared to $21 million in the prior period. Operating margin was 10 percent, compared to 11 percent in the previous year.

·   IT Infrastructure Management: Revenue for the third quarter decreased 9 percent to $70 million, compared to $77 million for the same period a year ago. Income from operations for the quarter was roughly flat at $10 million. Operating margin was approximately 14 percent, compared to 13 percent a year ago.

·   Other Services: Revenue was $13 million as compared to $16 million in the prior year. Loss from operations was roughly flat at $1 million.

Financial Guidance

The following projections are forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward Looking Statements section of this press release. Our guidance does not take into account any unusual charges. Acxiom’s estimates for fiscal 2013 are as follows:

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·   We expect revenue for the fiscal year to be down approximately 2.5 percent as compared to $1.131 billion in the prior year. The decline is projected primarily as a result of decreases in IT infrastructure management and international operations.

·   We now expect earnings per diluted share of up to $.73 as compared to our previous guidance of roughly $.70.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

Web Link to Financials

You may link to http://www.acxiom.com/FY13_Q3_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves clients around the world from locations in the United States, Europe, Asia-Pacific, and South America. 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 from continuing operations and earnings per share as well as statements regarding new product launches. 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 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 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, which could lead to decreases in our operating results; 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

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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 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, 2012, which was filed with the Securities and Exchange Commission on May 25, 2012.

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.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended
	December 31,
							$				%
	2012			2011			Variance			Variance
Revenue:
Marketing and data services		190,138			187,461			2,677			1.4	%
IT Infrastructure management services		69,916			77,173			(7,257	)		(9.4	%)
Other services		13,048			16,259			(3,211	)		(19.7	%)
Total revenue		273,102			280,893			(7,791	)		(2.8	%)
Operating costs and expenses:
Cost of revenue		209,027			213,925			4,898			2.3	%
Selling, general and administrative		37,303			36,318			(985	)		(2.7	%)
Impairment of goodwill and other intangibles		-			17,803			17,803			100.0	%
Gains, losses and other items, net		(126	)		(2,671	)		2,545			95.3	%
Total operating costs and expenses		246,204			265,375			19,171			7.2	%
Income from operations		26,898			15,518			11,380			73.3	%
% Margin		9.8	%		5.5	%
Other income (expense):
Interest expense		(3,178	)		(3,883	)		705			18.2	%
Other, net		565			(98	)		663			676.5	%
Total other income (expense)		(2,613	)		(3,981	)		1,368			34.4	%
Earnings from continuing operations before income taxes		24,285			11,537			12,748			110.5	%
Income taxes		9,836			9,700			(136	)		(1.4	%)
Net earnings from continuing operations		14,449			1,837			12,612			686.6	%
Earnings from discontinued operations, net of tax		-			814			(814	)		(100.0	%)
Net earnings		14,449			2,651			11,798			445.0	%
Less: Net loss attributable to noncontrolling interest		(76	)		(5,279	)		5,203			98.6	%
Net earnings attributable to Acxiom		14,525			7,930			6,595			83.2	%
Basic earnings per share:
Net earnings from continuing operations		0.19			0.02			0.17			850.0	%
Earnings from discontinued operations		0.00			0.01			(0.01	)		(100.0	%)
Net earnings		0.19			0.03			0.16			533.3	%
Net earnings attributable to Acxiom stockholders		0.20			0.10			0.10			100.0	%
Diluted earnings per share:
Net earnings from continuing operations		0.19			0.02			0.17			850.0	%
Earnings from discontinued operations		0.00			0.01			(0.01	)		(100.0	%)
Net earnings		0.19			0.03			0.16			533.3	%
Net earnings attributable to Acxiom stockholders		0.19			0.10			0.09			90.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Nine Months Ended
	December 31,
							$				%
	2012			2011			Variance			Variance
Revenue:
Marketing and data services		570,286			568,314			1,972			0.3	%
IT Infrastructure management services		210,267			223,935			(13,668	)		(6.1	%)
Other services		41,675			51,120			(9,445	)		(18.5	%)
Total revenue		822,228			843,369			(21,141	)		(2.5	%)
Operating costs and expenses:
Cost of revenue		628,239			649,701			21,462			3.3	%
Selling, general and administrative		111,393			112,554			1,161			1.0	%
Impairment of goodwill and other intangibles		-			17,803			17,803			100.0	%
Gains, losses and other items, net		66			38			(28	)		(73.7	%)
Total operating costs and expenses		739,698			780,096			40,398			5.2	%
Income from operations		82,530			63,273			19,257			30.4	%
% Margin		10.0	%		7.5	%
Other income (expense):
Interest expense		(9,735	)		(14,057	)		4,322			30.7	%
Other, net		(36	)		(1,150	)		1,114			96.9	%
Total other income (expense)		(9,771	)		(15,207	)		5,436			35.7	%
Earnings from continuing operations before income taxes		72,759			48,066			24,693			51.4	%
Income taxes		28,739			25,291			(3,448	)		(13.6	%)
Net earnings from continuing operations		44,020			22,775			21,245			93.3	%
Earnings from discontinued operations, net of tax		-			2,868			(2,868	)		(100.0	%)
Net earnings		44,020			25,643			18,377			71.7	%
Less: Net loss attributable to noncontrolling interest		(349	)		(5,554	)		5,205			93.7	%
Net earnings attributable to Acxiom		44,369			31,197			13,172			42.2	%
Basic earnings per share:
Net earnings from continuing operations		0.59			0.28			0.31			110.7	%
Earnings from discontinued operations		0.00			0.04			(0.04	)		(100.0	%)
Net earnings		0.59			0.32			0.27			84.4	%
Net earnings attributable to Acxiom stockholders		0.59			0.39			0.20			51.3	%
Diluted earnings per share:
Net earnings from continuing operations		0.57			0.28			0.29			103.6	%
Earnings from discontinued operations		0.00			0.04			(0.04	)		(100.0	%)
Net earnings		0.57			0.32			0.25			78.1	%
Net earnings attributable to Acxiom stockholders		0.58			0.39			0.19			48.7	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended						For the Nine Months Ended
	December 31,						December 31,
	2012			2011			2012			2011
Earnings from continuing operations before income taxes		24,285			11,537			72,759			48,066
Income taxes		9,836			9,700			28,739			25,291
Net earnings from continuing operations		14,449			1,837			44,020			22,775
Earnings from discontinued operations, net of tax		-			814			-			2,868
Net earnings		14,449			2,651			44,020			25,643
Less: Net earnings (loss) attributable to noncontrolling interest		(76	)		(5,279	)		(349	)		(5,554	)
Net earnings attributable to Acxiom		14,525			7,930			44,369			31,197
Earnings per share attributable to Acxiom stockholders:
Basic		0.20			0.10			0.59			0.39
Diluted		0.19			0.10			0.58			0.39
Unusual items:
MENA disposal		-			-			-			2,512
Impairment of goodwill and other intangibles		-			17,803			-			17,803
Adjustment of earnout liability		-			(2,598	)		-			(2,598	)
Other adjustments		(126	)		(73	)		66			124
Total unusual items		(126	)		15,132			66			17,841
Earnings from continuing operations before income taxes
and excluding unusual items		24,159			26,669			72,825			65,907
Income taxes		9,760			10,649			28,764			26,341
Non-GAAP earnings from continuing operations		14,399			16,020			44,061			39,566
Earnings from discontinued operations, net of tax		-			814			-			2,868
Non-GAAP net earnings		14,399			16,834			44,061			42,434
Less: Net earnings (loss) attributable to noncontrolling interest		(76	)		(231	)		(349	)		(1,371	)
Non-GAAP Net earnings attributable to Acxiom		14,475			17,065			44,410			43,805
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic		0.20			0.22			0.59			0.55
Diluted		0.19			0.22			0.58			0.54
Diluted weighted average shares		75,878			79,020			76,987			80,877

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Three Months Ended					For the Nine Months Ended
	December 31,					December 31,
	2012			2011		2012		2011
Income from operations		26,898			15,518		82,530		63,273
Unusual items		(126	)		15,132		66		17,841
Income from operations before unusual items		26,772			30,650		82,596		81,114

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Three Months Ended
	December 31,		December 31,
	2012		2011
Basic earnings per share from continuing operations:
Numerator - net earnings		14,449		1,837
Denominator - weighted-average shares outstanding		74,103		78,189
Basic earnings per share		0.19		0.02
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings  attributable to Acxiom		14,525		7,930
Denominator - weighted-average shares outstanding		74,103		78,189
Basic earnings per share - net earnings attributable to Acxiom stockholders		0.20		0.10
Diluted earnings per share from continuing operations:
Numerator - net earnings		14,449		1,837
Denominator - weighted-average shares outstanding		74,103		78,189
Dilutive effect of common stock options, warrants and restricted stock		1,775		831
		75,878		79,020
Diluted earnings per share from continuing operations		0.19		0.02
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		14,525		7,930
Denominator - weighted-average shares outstanding		74,103		78,189
Dilutive effect of common stock options, warrants, and restricted stock		1,775		831
		75,878		79,020
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.19		0.10

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Nine Months Ended
	December 31,		December 31,
	2012		2011
Basic earnings per share from continuing operations:
Numerator - net earnings		44,020		22,775
Denominator - weighted-average shares outstanding		75,195		80,039
Basic earnings per share		0.59		0.28
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		44,369		31,197
Denominator - weighted-average shares outstanding		75,195		80,039
Basic earnings per share - net earnings attributable to Acxiom stockholders		0.59		0.39
Diluted earnings per share from continuing operations:
Numerator - net earnings		44,020		22,775
Denominator - weighted-average shares outstanding		75,195		80,039
Dilutive effect of common stock options, warrants and restricted stock		1,792		838
		76,987		80,877
Diluted earnings per share from continuing operations		0.57		0.28
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		44,369		31,197
Denominator - weighted-average shares outstanding		75,195		80,039
Dilutive effect of common stock options, warrants, and restricted stock		1,792		838
		76,987		80,877
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.58		0.39

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,			December 31,
Revenue:	2012			2011
Marketing and data services		190,138			187,461
IT Infrastructure management services		69,916			77,173
Other services		13,048			16,259
Total revenue		273,102			280,893
Income from continuing operations:
Marketing and data services		17,971			21,388
IT Infrastructure management services		9,622			9,795
Other services		(821	)		(533	)
Corporate		126			(15,132	)
Total income from continuing operations		26,898			15,518
Margin:
Marketing and data services		9.5	%		11.4	%
IT Infrastructure management services		13.8	%		12.7	%
Other services		-6.3	%		-3.3	%
Total margin		9.8	%		5.5	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,			December 31,
Revenue:	2012			2011
Marketing and data services		570,286			568,314
IT Infrastructure management services		210,267			223,935
Other services		41,675			51,120
Total revenue		822,228			843,369
Income from operations:
Marketing and data services		59,277			65,726
IT Infrastructure management services		26,973			19,133
Other services		(3,654	)		(3,745	)
Corporate		(66	)		(17,841	)
Total income from operations		82,530			63,273
Margin:
Marketing and data services		10.4	%		11.6	%
IT Infrastructure management services		12.8	%		8.5	%
Other services		-8.8	%		-7.3	%
Total margin		10.0	%		7.5	%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	December 31,			March 31,			$				%
	2012			2012			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		186,220			229,648			(43,428	)		(18.9	%)
Trade accounts receivable, net		182,457			169,446			13,011			7.7	%
Deferred income taxes		15,082			15,107			(25	)		(0.2	%)
Other current assets		52,750			57,804			(5,054	)		100.0	%
Total current assets		436,509			472,005			(35,496	)		(7.5	%)
Property and equipment		811,416			913,073			(101,657	)		(11.1	%)
Less - accumulated depreciation and amortization		579,642			659,700			(80,058	)		(12.1	%)
Property and equipment, net		231,774			253,373			(21,599	)		(8.5	%)
Software, net of accumulated amortization		19,491			13,211			6,280			47.5	%
Goodwill		382,704			382,285			419			0.1	%
Purchased software licenses, net of accumulated amortization		21,583			25,294			(3,711	)		(14.7	%)
Deferred costs, net		47,211			61,977			(14,766	)		(23.8	%)
Data acquisition costs		11,540			15,009			(3,469	)		(23.1	%)
Other assets, net		2,831			3,697			(866	)		(23.4	%)
		1,153,643			1,226,851			(73,208	)		(6.0	%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		19,814			26,336			6,522			24.8	%
Trade accounts payable		19,873			31,030			11,157			36.0	%
Accrued payroll and related expenses		47,041			54,839			7,798			14.2	%
Other accrued expenses		73,696			77,062			3,366			4.4	%
Deferred revenue		47,389			59,949			12,560			21.0	%
Income taxes		3,229			16,400			13,171			80.3	%
Total current liabilities		211,042			265,616			54,574			20.5	%
Long-term debt		240,774			251,886			11,112			4.4	%
Deferred income taxes		86,614			93,039			6,425			6.9	%
Other liabilities		4,178			4,455			277			6.2	%
Stockholders' equity:
Common stock		12,108			12,003			105			0.9	%
Additional paid-in capital		877,619			860,165			17,454			2.0	%
Retained earnings		580,728			536,359			44,369			8.3	%
Accumulated other comprehensive income		14,714			13,601			1,113			8.2	%
Treasury stock, at cost		(873,893	)		(810,381	)		(63,512	)		7.8	%
Total Acxiom stockholders' equity		611,276			611,747			(471	)		(0.1	%)
Noncontrolling interest		(241	)		108			(349	)		(323.1	%)
Total equity		611,035			611,855			(820	)		(0.1	%)
		1,153,643			1,226,851			(73,208	)		(6.0	%)

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	December 31,
	2012			2011
Cash flows from operating activities:
Net earnings		14,449			2,651
Non-cash operating activities:
Depreciation and amortization		29,363			32,986
Gain on disposal or impairment of assets		-			(2,710	)
Impairment of goodwill and other intangibles		-			17,803
Deferred income taxes		(2,962	)		1,404
Non-cash stock compensation expense		3,103			1,710
Changes in operating assets and liabilities:
Accounts receivable		(15,867	)		6,913
Other assets		5,492			4,390
Deferred costs		(326	)		(1,048	)
Accounts payable and other liabilities		5,525			1,320
Deferred revenue		(234	)		17,121
Net cash provided by operating activities		38,543			82,540
Cash flows from investing activities:
Capitalized software		(5,443	)		(1,647	)
Capital expenditures		(10,260	)		(14,436	)
Data acquisition costs		(2,766	)		(3,999	)
Payments received from investments		-			370
Net cash used by investing activities		(18,469	)		(19,712	)
Cash flows from financing activities:
Payments of debt		(6,252	)		(31,993	)
Sale of common stock		2,128			4,500
Acquisition of treasury stock		(18,256	)		(8,727	)
Net cash used by financing activities		(22,380	)		(36,220	)
Effect of exchange rate changes on cash		122			142
Net change in cash and cash equivalents		(2,184	)		26,750
Cash and cash equivalents at beginning of period		188,404			119,113
Cash and cash equivalents at end of period		186,220			145,863
Supplemental cash flow information:
Cash paid during the period for:
Interest		3,178			4,160
Income taxes		12,104			9,784
Payments on capital leases and installment payment arrangements		4,002			4,709
Payments on software and data license liabilities		78			125
Other debt payments, excluding line of credit		2,172			2,159
Prepayment of debt		-			25,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		-			4,042

14

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Nine Months Ended
	December 31,
	2012			2011
Cash flows from operating activities:
Net earnings		44,020			25,643
Non-cash operating activities:
Depreciation and amortization		89,594			103,240
Loss on disposal or impairment of assets		25			183
Impairment of goodwill and other intangibles		-			17,803
Deferred income taxes		(6,428	)		2,539
Non-cash stock compensation expense		8,906			6,910
Changes in operating assets and liabilities:
Accounts receivable		(13,925	)		(2,763	)
Other assets		756			(202	)
Deferred costs		(1,600	)		(1,879	)
Accounts payable and other liabilities		(32,607	)		7,391
Deferred revenue		(12,830	)		14,143
Net cash provided by operating activities		75,911			173,008
Cash flows from investing activities:
Disposition of operations		-			(1,043	)
Capitalized software		(13,190	)		(3,167	)
Capital expenditures		(21,976	)		(39,147	)
Data acquisition costs		(6,464	)		(8,549	)
Payments from investments		-			370
Net cash paid in acquisitions		-			(255	)
Net cash used by investing activities		(41,630	)		(51,791	)
Cash flows from financing activities:
Payments of debt		(19,790	)		(145,768	)
Sale of common stock		7,863			7,318
Acquisition of treasury stock		(65,356	)		(42,827	)
Contingent consideration paid for prior acquisitions		(287	)		(326	)
Net cash used by financing activities		(77,570	)		(181,603	)
Effect of exchange rate changes on cash		(139	)		(724	)
Net change in cash and cash equivalents		(43,428	)		(61,110	)
Cash and cash equivalents at beginning of period		229,648			206,973
Cash and cash equivalents at end of period		186,220			145,863
Supplemental cash flow information:
Cash paid during the period for:
Interest		9,678			15,491
Income taxes		48,268			15,171
Payments on capital leases and installment payment arrangements		12,948			13,687
Payments on software and data license liabilities		337			616
Other debt payments, excluding line of credit		6,505			6,465
Prepayment of debt		-			125,000
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		2,157			8,733

15 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
		06/30/11	09/30/11	12/31/11	03/31/12	FY2012	06/30/12	09/30/12	12/31/12	YTD FY2013	TTM 12/31/11	TTM 12/31/12
Net cash provided (used) by operating activities		32,754	57,714	82,540	56,443	229,451	(1,867)	39,235	38,543	75,911	215,043	132,354
Less:
	Disposition of operations	-	(1,043)	-	73,468	72,425	-	-	-	-	(1,043)	73,468
	Capitalized software	(529)	(991)	(1,647)	(2,095)	(5,262)	(3,673)	(4,074)	(5,443)	(13,190)	(4,130)	(15,285)
	Capital expenditures	(12,577)	(12,134)	(14,436)	(12,444)	(51,591)	(3,538)	(8,178)	(10,260)	(21,976)	(51,360)	(34,420)
	Data acquisition costs	(2,776)	(1,774)	(3,999)	(3,763)	(12,312)	(2,302)	(1,396)	(2,766)	(6,464)	(11,199)	(10,227)
	Payments on capital leases and installment payment arrangements	(4,794)	(4,184)	(4,709)	(4,644)	(18,331)	(4,562)	(4,384)	(4,002)	(12,948)	(18,939)	(17,592)
	Payments on software and data license liabilities	(367)	(124)	(125)	(2,300)	(2,916)	(129)	(130)	(78)	(337)	(4,755)	(2,637)
	Other required debt payments	(2,151)	(2,155)	(2,159)	(2,164)	(8,629)	(2,165)	(2,168)	(2,172)	(6,505)	(8,619)	(8,669)
Total		9,560	35,309	55,465	102,501	202,835	(18,236)	18,905	13,822	14,491	114,998	116,992

 16

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
																												Q3 FY13 to Q3 FY12
	06/30/11			09/30/11			12/31/11			03/31/12			FY2012			06/30/12			09/30/12			12/31/12			YTD FY2013			%			$
Revenue:
Marketing and data services		184,996			195,857			187,461			203,400			771,714			185,739			194,409			190,138			570,286			1.4	%	2,677
IT Infrastructure management services		73,050			73,712			77,173			67,590			291,525			70,290			70,061			69,916			210,267			-9.4	%	(7,257	)
Other services		17,998			16,863			16,259			16,265			67,385			15,630			12,997			13,048			41,675			-19.7	%	(3,211	)
Total revenue		276,044			286,432			280,893			287,255			1,130,624			271,659			277,467			273,102			822,228			-2.8	%	(7,791	)
Operating costs and expenses:
Cost of revenue		218,289			217,487			213,925			213,788			863,489			209,326			209,886			209,027			628,239			-2.3	%	(4,898	)
Selling, general and administrative		36,807			39,429			36,318			38,577			151,131			36,749			37,341			37,303			111,393			2.7	%	985
Impairment of goodwill and other intangibles		-			-			17,803			-			17,803			-			-			-			-					(17,803	)
Gains, losses and other items, net		244			2,465			(2,671	)		12,600			12,638			160			32			(126	)		66			-95.3	%	2,545
Total operating costs and expenses		255,340			259,381			265,375			264,965			1,045,061			246,235			247,259			246,204			739,698			-7.2	%	(19,171	)
Income from operations		20,704			27,051			15,518			22,290			85,563			25,424			30,208			26,898			82,530			73.3	%	11,380
% Margin		7.5	%		9.4	%		5.5	%		7.8	%		7.6	%		9.4	%		10.9	%		9.8	%		10.0	%
Other expense
Interest expense		(5,455	)		(4,719	)		(3,883	)		(3,391	)		(17,448	)		(3,240	)		(3,317	)		(3,178	)		(9,735	)		18.2	%	705
Other, net		(87	)		(965	)		(98	)		(219	)		(1,369	)		(547	)		(54	)		565			(36	)		676.5	%	663
Total other expense		(5,542	)		(5,684	)		(3,981	)		(3,610	)		(18,817	)		(3,787	)		(3,371	)		(2,613	)		(9,771	)		34.4	%	1,368
Earnings from continuing operations before income taxes		15,162			21,367			11,537			18,680			66,746			21,637			26,837			24,285			72,759			110.5	%	12,748
Income taxes		6,063			9,528			9,700			3,838			29,129			8,438			10,465			9,836			28,739			1.4	%	136
Net earnings from continuing operations		9,099			11,839			1,837			14,842			37,617			13,199			16,372			14,449			44,020			686.6	%	12,612
Earnings from discontinued operations, net of tax		916			1,138			814			31,031			33,899			-			-			-			-			-100.0	%	(814	)
Net earnings		10,015			12,977			2,651			45,873			71,516			13,199			16,372			14,449			44,020			445.0	%	11,798
Less: Net earnings (loss)  attributable
to noncontrolling interest		(960	)		685			(5,279	)		(193	)		(5,747	)		(134	)		(139	)		(76	)		(349	)		-98.6	%	5,203
Net earnings attributable to Acxiom		10,975			12,292			7,930			46,066			77,263			13,333			16,511			14,525			44,369			83.2	%	6,595
Diluted earnings per share - net earnings attributable
to Acxiom stockholders		0.13			0.15			0.10			0.58			0.96			0.17			0.21			0.19			0.58			90.0	%	0.09

17 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																												Q3 FY13 to Q3 FY12
	06/30/11			09/30/11			12/31/11			03/31/12			FY2012			06/30/12			09/30/12			12/31/12			YTD FY2013			%			$
Revenue:
Marketing and data services		184,996			195,857			187,461			203,400			771,714			185,739			194,409			190,138			570,286			1	%	2,677
IT Infrastructure management services		73,050			73,712			77,173			67,590			291,525			70,290			70,061			69,916			210,267			-9	%	(7,257	)
Other services		17,998			16,863			16,259			16,265			67,385			15,630			12,997			13,048			41,675			-20	%	(3,211	)
Total revenue		276,044			286,432			280,893			287,255			1,130,624			271,659			277,467			273,102			822,228			-3	%	(7,791	)
Income (loss) from operations:
Marketing and data services		17,260			27,078			21,388			30,094			95,820			17,975			23,331			17,971			59,277			-16	%	(3,417	)
IT Infrastructure management services		4,247			5,091			9,795			5,855			24,988			8,831			8,520			9,622			26,973			-2	%	(173	)
Other services		(559	)		(2,653	)		(533	)		(1,059	)		(4,804	)		(1,222	)		(1,611	)		(821	)		(3,654	)		54	%	(288	)
Corporate		(244	)		(2,465	)		(15,132	)		(12,600	)		(30,441	)		(160	)		(32	)		126			(66	)		-101	%	15,258
Total income from operations		20,704			27,051			15,518			22,290			85,563			25,424			30,208			26,898			82,530			73	%	11,380
Margin:
Marketing and data services		9.3	%		13.8	%		11.4	%		14.8	%		12.4	%		9.7	%		12.0	%		9.5	%		10.4	%
IT Infrastructure management services		5.8	%		6.9	%		12.7	%		8.7	%		8.6	%		12.6	%		12.2	%		13.8	%		12.8	%
Other services		-3.1	%		-15.7	%		-3.3	%		-6.5	%		-7.1	%		-7.8	%		-12.4	%		-6.3	%		-8.8	%
Total		7.5	%		9.4	%		5.5	%		7.8	%		7.6	%		9.4	%		10.9	%		9.8	%		10.0	%

18