LiveRamp (RAMP) 8-K Acxiom Announces Fourth Quarter and Fiscal Year Results

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Lauren Russi

Acxiom Investor Relations

(650) 372-2242

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES FOURTH QUARTER AND FISCAL YEAR RESULTS

Agrees to Acquire LiveRamp

Exceeds EPS Guidance for the Year

LITTLE ROCK, Ark. – May 14, 2014 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its fourth quarter and fiscal year ended March 31, 2014.

Fourth Quarter Fiscal 2014

Total revenue for the fourth quarter was $277 million, roughly flat compared to the fourth quarter of fiscal 2013. Loss from operations for the quarter was $15 million compared to income from operations of $20 million for the prior-year period. Excluding non-cash impairment charges and other unusual items, operating income was $32 million, up 43 percent from $22 million for the same period last year. Net loss per diluted share attributable to Acxiom stockholders was $0.38. Excluding non-cash impairment charges and other unusual items, diluted earnings per share were $0.24, up 26 percent from $0.19 a year ago.

Operating cash flow was $44 million for the fourth quarter compared to $74 million for the same period a year ago. Free cash flow to equity decreased to $15 million for the quarter, compared to $42 million for the prior-year period. Free cash flow to equity is a non-GAAP financial measure.A reconciliation to the comparable GAAP measure, operating cash flow, is attached. Also attached is a schedule outlining the impact of unusual items on the current and prior year results.

Fiscal Year 2014

Total revenue for the fiscal year ended March 31, 2014, was $1,098 million, compared to $1,099 million in fiscal 2013. Earnings per diluted share attributable to Acxiom stockholders were $0.12. Excluding  non-cash impairment charges and other unusual items, diluted earnings per share were $0.86, up 13 percent from $0.76 in the prior year.

Operating cash flowincreased 10 percent to $165 million during the year compared to $150 million in fiscal 2013. Free cash flow available to equity was $76 million, up 36 percent from $56 million in the prior year. Both operating cash flow and free cash flow to equity were up as a result of improvements in working capital.

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The company recorded non-cash impairment charges of approximately $29 million in the fourth quarter in connection with the write-down of the carrying value of goodwill and other long-lived assets associated with its European operations.

“Fiscal 2014 was a year of innovation and transformation,” said Acxiom CEO Scott Howe. “We successfully launched our Audience Operating System™ and Aboutthedata.com™. We tightened our operating focus through the separation of our business units and the exit of our analog paper survey business in Europe. And today, we announced our proposed acquisition of LiveRamp, a leading solution for connecting customer data across marketing applications. Looking ahead to 2015, our focus will be on growing our AOS™ user base, while continuing to innovate and invest in our product portfolio.”

Agreement to Acquire LiveRamp:

Acxiom today announced that it has entered into a definitive agreement to acquire privately held LiveRamp, a leading service for onboarding customer data into digital marketing applications, for approximately $310 million in cash. Please refer to the press release issued today for additional details.

Fourth Quarter Highlights:

·   Acxiom announced a partnership with comScore Inc., a global leader in measuring the digital world and preferred source of digital business analytics, to provide marketers with increased audience reach and media spend ROI across multiple channels. The combination will enable marketers to immediately verify the results of audiences reached by their campaigns, and use those results to quickly optimize current and future campaigns.

·   The company announced a strategic partnership with Marketo Inc., a leading provider of marketing software. The partnership is designed to help marketers utilize advanced data insights to tailor marketing content and offers throughout a customer’s interactions and relationship with a brand.

·   Acxiom signed seven new AOS agreements during the quarter with customers in several key industries including: Financial Services, Retail and Automotive. In addition, Acxiom now has nearly 40 customers utilizing its Data Safe Haven™ and has begun to onboard client data from its partnership with Starcom MediaVest Group.

·   Acxiom won 15 awards from the 2014 Internet Advertising Competition (IAC) for its work with current top-tier customers including Skype, Rodale and Sony, among others.

·   Subsequent to quarter end, Acxiom announced a partnership with SHIFT, a leading marketing software company for social advertisers. The integration of AOS into SHIFT’s Open Marketing Cloud will provide marketers with enhanced insight and the ability to achieve optimal campaign results.

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Segment Results:

·   Marketing and Data Services: Revenue for the fourth quarter was $210 million, up from $203 million for the same period a year ago. U.S. revenue increased 5 percent to $181 million in the current quarter compared to $173 million for the fourth quarter of last year. Income from operations for the fourth quarter was $27 million, up 31 percent from $21 million for the prior-year period. Operating margin improved to 13 percent compared to 10 percent for the fourth quarter of last year.

·   IT Infrastructure Management: Revenue for the fourth quarter decreased as expected by 10 percent to $59 million compared to $65 million for the same period a year ago. Income from operations for the recent quarter was $4 million compared to $2 million for the prior-year period. Operating margin was approximately 6 percent, up from 4 percent for the fourth quarter of last year.

·   Other Services: Revenue for the fourth quarter was $9 million, down slightly compared to the prior year. Operating margin improved to approximately 7 percent compared to a loss for the fourth quarter of last year.

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 includes the impact of our proposed acquisition of LiveRamp, but excludes the impact of unusual items, acquisition related expenses and non-cash stock compensation expense. Acxiom’s estimates for fiscal 2015 are as follows:

·   We expect revenue for the fiscal year to be down by roughly five percent. The decline in revenue is due to the impact of lost IT Infrastructure Management customers and the exit of our analog paper survey business in Europe.

·   Earnings per diluted share attributable to Acxiom stockholders are expected to be in the range of $0.75 to $0.85. The decline in earnings per share is primarily driven by lost IT Infrastructure Management customers, and to a lesser extent, dilution from the acquisition of LiveRamp and expenses related to the global expansion of AOS. The comparable measure for fiscal 2014 is $0.97. A reconciliation to the comparable GAAP earnings per share measure is attached.

Conference Call

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

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.

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Forward-Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share for fiscal 2015, statements concerning the proposed acquisition of LiveRamp, statements concerning areas of focus and statements regarding new customers and new product launches and capabilities. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the LiveRamp transaction may not close or may not close within the expected timeframe, the possibility that the expected revenue from the LiveRamp transaction may not be realized within the expected timeframe, the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.

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.

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We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom is a registered trademark of Acxiom Corporation.

To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.

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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
	March 31,
							$				%
	2014			2013			Variance			Variance
Revenue:
Marketing and data services		209,746			202,510			7,236			3.6	%
IT Infrastructure management services		58,816			65,202			(6,386	)		(9.8	%)
Other services		8,646			9,419			(773	)		(8.2	%)
Total revenue		277,208			277,131			77			0.0	%
Operating costs and expenses:
Cost of revenue		207,002			213,317			6,315			3.0	%
Selling, general and administrative		45,519			41,681			(3,838	)		(9.2	%)
Impairment of goodwill and other		28,834			-			(28,834	)		(100.0	%)
Gains, losses and other items, net		11,052			1,944			(9,108	)		(468.5	%)
Total operating costs and expenses		292,407			256,942			(35,465	)		(13.8	%)
Income (loss) from operations		(15,199	)		20,189			(35,388	)		(175.3	%)
% Margin		-5.5	%		7.3	%
Other income (expense):
Interest expense		(2,558	)		(2,959	)		401			13.6	%
Other, net		579			188			391			208.0	%
Total other income (expense)		(1,979	)		(2,771	)		792			28.6	%
Earnings (loss) before income taxes		(17,178	)		17,418			(34,596	)		(198.6	%)
Income taxes		12,045			4,319			(7,726	)		(178.9	%)
Net earnings (loss)		(29,223	)		13,099			(42,322	)		(323.1	%)
Less: Net loss attributable to noncontrolling interest		-			(139	)		139			100.0	%
Net earnings (loss) attributable to Acxiom		(29,223	)		13,238			(42,461	)		(320.8	%)
Basic earnings (loss) per share:
Net earnings (loss)		(0.38	)		0.18			(0.56	)		(311.1	%)
Net earnings (loss) attributable to Acxiom stockholders		(0.38	)		0.18			(0.56	)		(311.1	%)
Diluted earnings (loss) per share:
Net earnings (loss)		(0.38	)		0.17			(0.55	)		(323.5	%)
Net earnings (loss) attributable to Acxiom stockholders		(0.38	)		0.18			(0.56	)		(311.1	%)

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
	For the Twelve Months Ended
	March 31,
							$				%
	2014			2013			Variance			Variance
Revenue:
Marketing and data services		805,153			788,740			16,413			2.1	%
IT Infrastructure management services		257,125			275,469			(18,344	)		(6.7	%)
Other services		35,267			35,150			117			0.3	%
Total revenue		1,097,545			1,099,359			(1,814	)		(0.2	%)
Operating costs and expenses:
Cost of revenue		828,955			840,640			11,685			1.4	%
Selling, general and administrative		169,376			153,990			(15,386	)		(10.0	%)
Impairment of goodwill and other		28,834			-			(28,834	)		(100.0	%)
Gains, losses and other items, net		22,096			2,010			(20,086	)		(999.3	%)
Total operating costs and expenses		1,049,261			996,640			(52,621	)		(5.3	%)
Income from operations		48,284			102,719			(54,435	)		(53.0	%)
% Margin		4.4	%		9.3	%
Other income (expense):
Interest expense		(11,671	)		(12,694	)		1,023			8.1	%
Other, net		1,817			152			1,665			1095.4	%
Total other income (expense)		(9,854	)		(12,542	)		2,688			21.4	%
Earnings before income taxes		38,430			90,177			(51,747	)		(57.4	%)
Income taxes		29,627			33,058			3,431			10.4	%
Net earnings		8,803			57,119			(48,316	)		(84.6	%)
Less: Net loss attributable to noncontrolling interest		(60	)		(488	)		428			87.7	%
Net earnings attributable to Acxiom		8,863			57,607			(48,744	)		(84.6	%)
Basic earnings per share:
Net earnings		0.12			0.76			(0.64	)		(84.2	%)
Net earnings attributable to Acxiom stockholders		0.12			0.77			(0.65	)		(84.4	%)
Diluted earnings per share:
Net earnings		0.11			0.75			(0.64	)		(85.3	%)
Net earnings attributable to Acxiom stockholders		0.12			0.75			(0.63	)		(84.0	%)

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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 Twelve Months Ended
	March 31,						March 31,
	2014			2013			2014			2013
Earnings (loss) before income taxes		(17,178	)		17,418			38,430			90,177
Income taxes		12,045			4,319			29,627			33,058
Net earnings (loss)		(29,223	)		13,099			8,803			57,119
Less: Net loss attributable to noncontrolling interest		-			(139	)		(60	)		(488	)
Net earnings (loss) attributable to Acxiom		(29,223	)		13,238			8,863			57,607
Earnings (loss) per share attributable to Acxiom stockholders:
Basic		(0.38	)		0.18			0.12			0.77
Diluted		(0.38	)		0.18			0.12			0.75
Unusual items:
Business separation and transformation expenses		6,924			-			14,007			-
Legal settlement accruals		-			-			4,200			-
Restructuring charges and other adjustments		11,052			1,944			17,896			2,010
Gain on investment		-			-			(2,567	)		-
Impairment of goodwill and other		28,834			-			28,834			-
Total unusual items, continuing operations		46,810			1,944			62,370			2,010
Earnings before income taxes
and excluding unusual items		29,632			19,362			100,800			92,187
Income taxes		11,113			5,398			34,688			34,163
Non-GAAP net earnings		18,519			13,964			66,112			58,024
Less: Net loss attributable to noncontrolling interest		-			(139	)		(60	)		(488	)
Non-GAAP Net earnings attributable to Acxiom		18,519			14,103			66,172			58,512
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic		0.24			0.19			0.89			0.78
Diluted		0.24			0.19			0.86			0.76
Diluted weighted average shares		78,450			75,027			76,954			76,497

8 

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 Twelve Months Ended
	March 31,					March 31,
	2014			2013		2014		2013
Income (loss) from operations		(15,199	)		20,189		48,284		102,719
Unusual items		46,810			1,944		64,937		2,010
Income from operations before unusual items		31,611			22,133		113,221		104,729

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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
	March 31,			March 31,
	2014			2013
Basic earnings (loss) per share:
Numerator - net earnings (loss)		(29,223	)		13,099
Denominator - weighted-average shares outstanding		76,293			73,670
Basic earnings (loss) per share		(0.38	)		0.18
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom		(28,757	)		13,238
Denominator - weighted-average shares outstanding		76,293			73,670
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders		(0.38	)		0.18
Diluted earnings (loss) per share:
Numerator - net earnings (loss)		(29,223	)		13,099
Denominator - weighted-average shares outstanding		76,293			73,670
Dilutive effect of common stock options, warrants and restricted stock		-			1,357
		76,293			75,027
Diluted earnings (loss) per share		(0.38	)		0.17
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom		(28,757	)		13,238
Denominator - weighted-average shares outstanding		76,293			73,670
Dilutive effect of common stock options, warrants, and restricted stock		-			1,357
		76,293			75,027
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders		(0.38	)		0.18

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
	For the Twelve Months Ended
	March 31,		March 31,
	2014		2013
Basic earnings per share:
Numerator - net earnings		8,803		57,119
Denominator - weighted-average shares outstanding		74,690		74,814
Basic earnings per share		0.12		0.76
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		8,863		57,607
Denominator - weighted-average shares outstanding		74,690		74,814
Basic earnings per share - net earnings attributable to Acxiom stockholders		0.12		0.77
Diluted earnings per share:
Numerator - net earnings		8,803		57,119
Denominator - weighted-average shares outstanding		74,690		74,814
Dilutive effect of common stock options, warrants and restricted stock		2,264		1,683
		76,954		76,497
Diluted earnings per share from continuing operations		0.11		0.75
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom		8,863		57,607
Denominator - weighted-average shares outstanding		74,690		74,814
Dilutive effect of common stock options, warrants, and restricted stock		2,264		1,683
		76,954		76,497
Diluted earnings per share - net earnings attributable to Acxiom stockholders		0.12		0.75

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	March 31,			March 31,
Revenue:	2014			2013
Marketing and data services		209,746			202,510
IT Infrastructure management services		58,816			65,202
Other services		8,646			9,419
Total revenue		277,208			277,131
Income (loss) from operations:
Marketing and data services		27,244			20,866
IT Infrastructure management services		3,803			2,357
Other services		564			(1,090	)
Corporate		(46,810	)		(1,944	)
Total income (loss) from operations		(15,199	)		20,189
Margin:
Marketing and data services		13.0	%		10.3	%
IT Infrastructure management services		6.5	%		3.6	%
Other services		6.5	%		-11.6	%
Total margin		-5.5	%		7.3	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
	For the Twelve Months Ended
	March 31,	March 31,
Revenue:	2014	2013
Marketing and data services	805,153	788,740
IT Infrastructure management services	257,125	275,469
Other services	35,267	35,150
Total revenue	1,097,545	1,099,359
Income from operations:
Marketing and data services	78,433	80,017
IT Infrastructure management services	32,847	29,330
Other services	1,941	(4,618)
Corporate	(64,937)	(2,010)
Total income from operations	48,284	102,719
Margin:
Marketing and data services	9.7%	10.1%
IT Infrastructure management services	12.8%	10.6%
Other services	5.5%	-13.1%
Total margin	4.4%	9.3%

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	March 31,			March 31,			$				%
	2014			2013			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		418,586			222,974			195,612			87.7	%
Trade accounts receivable, net		167,169			159,882			7,287			4.6	%
Deferred income taxes		12,870			13,496			(626	)		(4.6	%)
Refundable income taxes		11,535			5,809			5,726			98.6	%
Other current assets		55,365			58,935			(3,570	)		(6.1	%)
Total current assets		665,525			461,096			204,429			44.3	%
Property and equipment		852,236			822,439			29,797			3.6	%
Less - accumulated depreciation and amortization		635,330			591,687			43,643			7.4	%
Property and equipment, net		216,906			230,752			(13,846	)		(6.0	%)
Software, net of accumulated amortization		39,425			24,471			14,954			61.1	%
Goodwill		358,384			381,129			(22,745	)		(6.0	%)
Purchased software licenses, net of accumulated amortization		18,584			23,604			(5,020	)		(21.3	%)
Deferred costs, net		16,143			42,971			(26,828	)		(62.4	%)
Data acquisition costs		4,502			10,631			(6,129	)		(57.7	%)
Other assets, net		3,832			13,052			(9,220	)		(70.6	%)
		1,323,301			1,187,706			135,595			11.4	%
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		28,567			16,105			(12,462	)		(77.4	%)
Trade accounts payable		36,183			35,786			(397	)		(1.1	%)
Accrued payroll and related expenses		63,972			62,390			(1,582	)		(2.5	%)
Other accrued expenses		72,762			68,270			(4,492	)		(6.6	%)
Deferred revenue		47,744			41,388			(6,356	)		(15.4	%)
Income taxes		241			637			396			62.2	%
Total current liabilities		249,469			224,576			(24,893	)		(11.1	%)
Long-term debt		289,043			237,400			(51,643	)		(21.8	%)
Deferred income taxes		90,226			94,918			4,692			4.9	%
Other liabilities		11,706			11,444			(262	)		(2.3	%)
Stockholders' equity:
Common stock		12,584			12,134			450			3.7	%
Additional paid-in capital		981,985			885,184			96,801			10.9	%
Retained earnings		602,829			593,966			8,863			1.5	%
Accumulated other comprehensive income		13,662			11,423			2,239			19.6	%
Treasury stock, at cost		(928,203	)		(882,959	)		(45,244	)		(5.1	%)
Total Acxiom stockholders' equity		682,857			619,748			63,109			10.2	%
Noncontrolling interest		-			(380	)		380			100.0	%
Total equity		682,857			619,368			63,489			10.3	%
		1,323,301			1,187,706			135,595			11.4	%

14 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	March 31,
	2014			2013
Cash flows from operating activities:
Net earnings (loss)		(29,223	)		13,099
Non-cash operating activities:
Depreciation and amortization		26,879			26,614
Loss (Gain) on disposal or impairment of assets		(9	)		-
Impairment of goodwill and other		28,804			-
Deferred income taxes		5,763			2,850
Non-cash stock compensation expense		3,581			3,096
Changes in operating assets and liabilities:
Accounts receivable		6,202			20,603
Other assets		(7,920	)		(9,941	)
Deferred costs		(417	)		36
Accounts payable and other liabilities		12,763			23,719
Deferred revenue		(2,589	)		(5,855	)
Net cash provided by operating activities		43,834			74,221
Cash flows from investing activities:
Disposal of operations		-			-
Capitalized software		(5,408	)		(6,689	)
Capital expenditures		(14,409	)		(16,515	)
Data acquisition costs		(3,085	)		(2,106	)
Payments received from investments		190			-
Net cash paid in acquisitions		(500	)		-
Net cash used by investing activities		(23,212	)		(25,310	)
Cash flows from financing activities:
Payments of debt		(5,728	)		(7,081	)
Sale of common stock		11,384			4,094
Tax impact of stock options, warrants, and restricted stock		11,295			357
Acquisition of treasury stock		-			(9,023	)
Net cash provided (used) by financing activities		16,951			(11,653	)
Effect of exchange rate changes on cash		105			(504	)
Net change in cash and cash equivalents		37,678			36,754
Cash and cash equivalents at beginning of period		380,908			186,220
Cash and cash equivalents at end of period		418,586			222,974
Supplemental cash flow information:
Cash paid during the period for:
Interest		2,495			3,031
Income taxes		5,928			9,196
Payments on capital leases and installment payment arrangements		1,465			3,566
Payments on software and data license liabilities		-			1,432
Other debt payments, excluding line of credit		4,263			2,083

15 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Twelve Months Ended
	March 31,
	2014			2013
Cash flows from operating activities:
Net earnings		8,803			57,119
Non-cash operating activities:
Depreciation and amortization		103,006			116,208
Loss (gain) on disposal or impairment of assets		(2,576	)		25
Loss on early extinguishment of debt		664			-
Impairment of goodwill and other		28,804			-
Deferred income taxes		2,097			(3,578	)
Non-cash stock compensation expense		13,925			12,002
Changes in operating assets and liabilities:
Accounts receivable		7,733			6,678
Other assets		(1,129	)		(9,185	)
Deferred costs		(506	)		(1,564	)
Accounts payable and other liabilities		210			(8,888	)
Deferred revenue		3,945			(18,685	)
Net cash provided by operating activities		164,976			150,132
Cash flows from investing activities:
Capitalized software		(24,517	)		(19,879	)
Capital expenditures		(39,298	)		(38,491	)
Data acquisition costs		(7,745	)		(8,570	)
Payments from investments		3,823			-
Net cash paid in acquisitions		(500	)		-
Net cash used by investing activities		(68,237	)		(66,940	)
Cash flows from financing activities:
Proceeds from debt		300,000			-
Payments of debt		(235,895	)		(26,871	)
Fees for debt refinancing		(4,370	)		-
Sale of common stock		80,490			11,957
Tax impact of stock options, warrants, and restricted stock		11,295			357
Acquisition of treasury stock		(52,663	)		(74,378	)
Acquisition of NCI		(600	)		-
Contingent consideration paid for prior acquisitions		-			(288	)
Net cash provided (used) by financing activities		98,257			(89,223	)
Effect of exchange rate changes on cash		616			(643	)
Net change in cash and cash equivalents		195,612			(6,674	)
Cash and cash equivalents at beginning of period		222,974			229,648
Cash and cash equivalents at end of period		418,586			222,974
Supplemental cash flow information:
Cash paid during the period for:
Interest		11,762			12,709
Income taxes		21,702			57,464
Payments on capital leases and installment payment arrangements		8,379			16,514
Payments on software and data license liabilities		-			1,769
Other debt payments, excluding line of credit		12,516			8,588
Prepayment of debt		215,000			-
Noncash investing and financing activities:
Acquisition of property and equipment under capital lease
and installment payment arrangements		-			2,157

16 

ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
		06/30/12	09/30/12	12/31/12	03/31/13	YTD FY2013	06/30/13	09/30/13	12/31/13	03/31/14	YTD FY2014
Net cash provided (used) by operating activities		(1,867)	39,235	38,543	74,221	150,132	16,849	40,521	63,772	43,834	164,976
Less:
	Payments for investments	-	-	-	-	-	-	-	3,633	190	3,823
	Capitalized software	(3,673)	(4,074)	(5,443)	(6,689)	(19,879)	(5,954)	(7,660)	(5,495)	(5,408)	(24,517)
	Capital expenditures	(3,538)	(8,178)	(10,260)	(16,515)	(38,491)	(8,920)	(9,269)	(6,700)	(14,409)	(39,298)
	Data acquisition costs	(2,302)	(1,396)	(2,766)	(2,106)	(8,570)	(1,961)	(913)	(1,786)	(3,085)	(7,745)
	Payments on capital leases and installment payment arrangements	(4,562)	(4,384)	(4,002)	(3,566)	(16,514)	(2,900)	(2,339)	(1,675)	(1,465)	(8,379)
	Other required debt payments	(2,294)	(2,298)	(2,250)	(3,515)	(10,357)	(1,990)	(2,004)	(4,259)	(4,263)	(12,516)
Total		(18,236)	18,905	13,822	41,830	56,321	(4,876)	18,336	47,490	15,394	76,344

17 

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
																															Q4 FY14 to Q4 FY13
	06/30/12			09/30/12			12/31/12			03/31/13			YTD FY2013			06/30/13			09/30/13			12/31/13			03/31/14			YTD FY2014			%			$
Revenue:
Marketing and data services		192,482			198,602			195,146			202,510			788,740			187,793			200,952			206,662			209,746			805,153			3.6	%	7,236
IT Infrastructure management services		70,290			70,061			69,916			65,202			275,469			69,385			66,825			62,099			58,816			257,125			-9.8	%	(6,386	)
Other services		8,887			8,804			8,040			9,419			35,150			9,015			8,494			9,112			8,646			35,267			-8.2	%	(773	)
Total revenue		271,659			277,467			273,102			277,131			1,099,359			266,193			276,271			277,873			277,208			1,097,545			0.0	%	77
Operating costs and expenses:
Cost of revenue		209,311			209,164			208,848			213,317			840,640			204,506			207,394			210,053			207,002			828,955			-3.0	%	(6,315	)
Selling, general and administrative		36,764			38,063			37,482			41,681			153,990			37,615			42,859			43,383			45,519			169,376			9.2	%	3,838
Impairement of goodwill and other		-			-			-			-			-			-			-			-			28,834			28,834			-100.0	%	28,834
Gains, losses and other items, net		160			32			(126	)		1,944			2,010			-			6,387			4,657			11,052			22,096			468.5	%	9,108
Total operating costs and expenses		246,235			247,259			246,204			256,942			996,640			242,121			256,640			258,093			292,407			1,049,261			13.8	%	35,465
Income (loss) from operations		25,424			30,208			26,898			20,189			102,719			24,072			19,631			19,780			(15,199	)		48,284			-175.3	%	(35,388	)
% Margin		9.4	%		10.9	%		9.8	%		7.3	%		9.3	%		9.0	%		7.1	%		7.1	%		-5.5	%		4.4	%
Other expense
Interest expense		(3,240	)		(3,317	)		(3,178	)		(2,959	)		(12,694	)		(3,019	)		(2,980	)		(3,114	)		(2,558	)		(11,671	)		-13.6	%	401
Other, net		(547	)		(54	)		565			188			152			104			(350	)		1,484			579			1,817			208.0	%	391
Total other expense		(3,787	)		(3,371	)		(2,613	)		(2,771	)		(12,542	)		(2,915	)		(3,330	)		(1,630	)		(1,979	)		(9,854	)		28.6	%	792
Earnings (loss) before income taxes		21,637			26,837			24,285			17,418			90,177			21,157			16,301			18,150			(17,178	)		38,430			-198.6	%	(34,596	)
Income taxes		8,438			10,465			9,836			4,319			33,058			8,062			6,437			3,083			12,045			29,627			178.9	%	7,726
Net earnings (loss)		13,199			16,372			14,449			13,099			57,119			13,095			9,864			15,067			(29,223	)		8,803			-323.1	%	(42,322	)
Less: Net gain (loss) attributable
to noncontrolling interest		(134	)		(139	)		(76	)		(139	)		(488	)		(85	)		25			-			-			(60	)		100.0	%	139
Net earnings (loss) attributable to Acxiom		13,333			16,511			14,525			13,238			57,607			13,180			9,839			15,067			(29,223	)		8,863			-320.8	%	(42,461	)
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders
		0.17			0.21			0.19			0.18			0.75			0.17			0.13			0.19			(0.38	)		0.12			-311.1	%	(0.56	)

18 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																															Q4 FY14 to Q4 FY13
	06/30/12			09/30/12			12/31/12			03/31/13			YTD FY2013			06/30/13			09/30/13			12/31/13			03/31/14			YTD FY2014			%			$
Revenue:
Marketing and data services		192,482			198,602			195,146			202,510			788,740			187,793			200,952			206,662			209,746			805,153			4	%	7,236
IT Infrastructure management services		70,290			70,061			69,916			65,202			275,469			69,385			66,825			62,099			58,816			257,125			-10	%	(6,386	)
Other services		8,887			8,804			8,040			9,419			35,150			9,015			8,494			9,112			8,646			35,267			-8	%	(773	)
Total revenue		271,659			277,467			273,102			277,131			1,099,359			266,193			276,271			277,873			277,208			1,097,545			0	%	77
Marketing and data services		18,703			22,262			18,186			20,866			80,017			12,657			16,014			22,518			27,244			78,433			31	%	6,378
IT Infrastructure management services		8,831			8,520			9,622			2,357			29,330			10,761			11,967			6,316			3,803			32,847			61	%	1,446
Other services		(1,950	)		(542	)		(1,036	)		(1,090	)		(4,618	)		654			223			500			564			1,941			152	%	1,654
Corporate		(160	)		(32	)		126			(1,944	)		(2,010	)		-			(8,573	)		(9,554	)		(46,810	)		(64,937	)		-2308	%	(44,866	)
Total income (loss) from operations		25,424			30,208			26,898			20,189			102,719			24,072			19,631			19,780			(15,199	)		48,284			-175	%	(35,388	)
Margin:
Marketing and data services		9.7	%		11.2	%		9.3	%		10.3	%		10.1	%		6.7	%		8.0	%		10.9	%		13.0	%		9.7	%
IT Infrastructure management services		12.6	%		12.2	%		13.8	%		3.6	%		10.6	%		15.5	%		17.9	%		10.2	%		6.5	%		12.8	%
Other services		-21.9	%		-6.2	%		-12.9	%		-11.6	%		-13.1	%		7.3	%		2.6	%		5.5	%		6.5	%		5.5	%
Total		9.4	%		10.9	%		9.8	%		7.3	%		9.3	%		9.0	%		7.1	%		7.1	%		-5.5	%		4.4	%

19 

ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURE OF EARNINGS PER SHARE EXCLUDING STOCK COMPENSATION
(Unaudited)
(Dollars in thousands)
	06/30/12			09/30/12			12/31/12			03/31/13			FY2013			06/30/13			09/30/13		12/31/13			03/31/14			FY2014
Earnings (loss) before income taxes		21,637			26,837			24,285			17,418			90,177			21,157			16,301		18,150			(17,178	)		38,430
Income taxes		8,438			10,465			9,836			4,319			33,058			8,062			6,437		3,083			12,045			29,627
Net earnings (loss)		13,199			16,372			14,449			13,099			57,119			13,095			9,864		15,067			(29,223	)		8,803
Less: Net loss attributable to noncontrolling interest		(134	)		(139	)		(76	)		(139	)		(488	)		(85	)		25		-			-			(60	)
Net earnings (loss) attributable to Acxiom		13,333			16,511			14,525			13,238			57,607			13,180			9,839		15,067			(29,223	)		8,863
Earnings (loss) per share attributable to Acxiom stockholders:
Basic		0.17			0.21			0.19			0.18			0.77			0.18			0.13		0.20			(0.38	)		0.12
Diluted		0.17			0.21			0.19			0.18			0.75			0.17			0.13		0.19			(0.38	)		0.12
Excluded items:
Business separation and transformation expenses		-			-			-			-			-			-			2,186		4,897			6,924			14,007
Legal settlement accruals		160			32			(126	)		1,944			2,010			-			3,200		1,000			-			4,200
Restructuring charges and other adjustments		-			-			-			-			-			-			3,187		3,657			11,052			17,896
Gain on investment		-			-			-			-			-			-			-		(2,567	)		-			(2,567	)
Impairment of goodwill and other		-			-			-			-			-			-			-		-			28,834			28,834
Non-cash stock compensation expense		2,653			3,150			3,103			3,096			12,002			3,180			3,709		3,455			3,581			13,925
Total excluded items		2,813			3,182			2,977			5,040			14,012			3,180			12,282		10,442			50,391			76,295
Non-GAAP earnings before income taxes		24,450			30,019			27,262			22,458			104,189			24,337			28,583		28,592			33,213			114,725
Income taxes		9,535			11,706			11,012			6,583			38,836			9,274			11,288		6,979			12,474			40,015
Non-GAAP net earnings		14,915			18,313			16,250			15,875			65,353			15,063			17,295		21,613			20,739			74,710
Less: Net loss attributable to noncontrolling interest		(134	)		(139	)		(76	)		(139	)		(488	)		(85	)		25		-			-			(60	)
Non-GAAP Net earnings attributable to Acxiom		15,049			18,452			16,326			16,014			65,841			15,148			17,270		21,613			20,739			74,770
Non-GAAP earnings per share attributable to Acxiom stockholders:
Basic		0.20			0.25			0.22			0.22			0.88			0.21			0.23		0.29			0.27			1.00
Diluted		0.19			0.24			0.22			0.21			0.86			0.20			0.23		0.28			0.26			0.97
Diluted weighted average shares		78,057			77,025			75,878			75,027			76,497			75,491			76,036		77,839			78,450			76,954

20