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

For more information, contact:

Lauren Dillard

Acxiom Investor Relations

(650) 372-2242

investor.relations@acxiom.com

EACXM

ACXIOM ANNOUNCES FIRST QUARTER RESULTS

Connectivity Nears Breakeven

Sale of IT Infrastructure Management Business Completed

LITTLE ROCK, Ark. – August 5, 2015 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its first quarter ended June 30, 2015.

Financial Highlights

·  Revenue: Total revenue was $197 million, up approximately 5% compared to the first quarter of last year.

·  Operating Income (Loss): GAAP operating loss from continuing operations was $3 million compared to a loss of $13 million in the prior year. Non-GAAP operating income from continuing operations improved 71% to approximately $15 million compared to $9 million a year ago.

·  Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.07 compared to a net loss of $0.14 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.09, up 80% from $0.05 a year ago.

·  Operating Cash Flow: Operating cash flow from continuing operations improved to $12 million compared to negative $15 million a year ago.

·  Free Cash Flow to Equity: Free cash flow to equity was negative $12 million compared to negative $43 million in the prior year.

Segment Results

During the first quarter of fiscal 2016, Acxiom realigned its organizational structure to better reflect its business strategy. The Company will report its financial performance based on the following segments: Marketing Services and Audience Solutions and Connectivity. Prior period amounts have been adjusted to conform to the way the Company internally managed and monitored segment performance during the first quarter of fiscal year 2016.

Marketing Services and Audience Solutions

·   Revenue was $176 million, down 3% compared to the first quarter of last year primarily due to declines in International. US revenue of $159 million was roughly flat year-over-year.

·   Non-GAAP gross margin decreased from 43% to 41%.

·   Non-GAAP operating income was $40 million compared to $47 million in the prior year. The decline was primarily driven by lower revenue.

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Connectivity

·   Revenue was $21 million, up approximately 376% compared to the first quarter of last year, driven by the addition of LiveRamp™ and continued onboarding momentum.

·   Non-GAAP gross margin improved from negative 83% to positive 60%.

·   Non-GAAP operating loss improved by approximately $14 million to roughly breakeven driven by growth in subscriptions and royalties.

Non-GAAP results exclude items including non-cash compensation, purchased intangible asset amortization, and separation and transformation costs. A reconciliation between GAAP and non-GAAP results is attached to this release.

“The first quarter was a solid start to fiscal 2016,” said Acxiom CEO Scott Howe. “Our results this quarter demonstrate the continued strength of Connectivity. A growing list of customers and synergies from our combination with LiveRamp contributed to dramatically expanding revenue, gross margin and bottom-line performance.”

“We are also pleased to announce that the sale of our IT Infrastructure Management business was completed on July 31, 2015, leaving Acxiom with a portfolio of businesses that share a single vision and mission,” continued Howe.

Business Highlights

·   LiveRamp added 30 new customers during the quarter and added 10 new partner integrations. Marketers can now onboard and distribute their data to a growing network of over 200 marketing platforms and data providers.

·   Acxiom relaunched its email and cross-channel marketing business, Acxiom Impact™, an advanced marketing offering specifically designed to meet the unique needs of sophisticated enterprise marketers.

·   The Company appointed Jeremy Allen as President of Marketing Services. Allen’s appointment completes Acxiom's new divisional structure, which includes Travis May as President of Connectivity and Rick Erwin as President of Audience Solutions. Acxiom's CFO, Warren Jenson, is heading the Company's international operations.

·  Acxiom repurchased approximately 832,000 shares for $15 million during the quarter. Since inception of the share repurchase program in August 2011, the Company has repurchased 13.7 million shares for $217 million.

·   On July 31, 2015, Acxiom completed the sale of its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners.

Financial Outlook

The Company’s guidance excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom reconfirms the following estimates for fiscal 2016:

·  Revenue from continuing operations in the range of $815 million to $840 million.

·   Earnings per diluted share from continuing operations in the range of $0.45 to $0.50.

Conference Call

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

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About Acxiom

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

Forward-Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the expected revenue from the divisions may not be realized within the expected timeframe; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2015, which was filed with the Securities and Exchange Commission on May 27, 2015.

With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

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

Acxiom is a registered trademark of Acxiom Corporation.

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except loss per share)
	For the Three Months Ended
	June 30,
							$				%
	2015			2014			Variance			Variance
Revenues		196,895			186,683			10,212			5.5	%
Cost of revenue		117,709			113,090			4,619			4.1	%
Gross profit		79,186			73,593			5,593			7.6	%
% Gross margin		40.2	%		39.4	%
Operating expenses:
Research and development		20,011			16,350			3,661			22.4	%
Sales and marketing		29,494			26,500			2,994			11.3	%
General and administrative		31,743			36,701			(4,958	)		(13.5	%)
Gains, losses and other items, net		807			7,128			(6,321	)		(88.7	%)
Total operating expenses		82,055			86,679			(4,624	)		(5.3	%)
Loss from operations		(2,869	)		(13,086	)		10,217			78.1	%
% Margin		-1.5	%		-7.0	%
Other income (expense):
Interest expense		(1,885	)		(1,948	)		63			3.2	%
Other, net		304			(106	)		410			386.8	%
Total other expense		(1,581	)		(2,054	)		473			23.0	%
Loss from continuing operations before income taxes		(4,450	)		(15,140	)		10,690			70.6	%
Income taxes		732			(4,399	)		5,131			116.6	%
Net loss from continuing operations		(5,182	)		(10,741	)		5,559			51.8	%
Earnings from discontinued operations, net of tax		4,143			3,137			1,006			32.1	%
Net loss		(1,039	)		(7,604	)		6,565			86.3	%
Basic earnings (loss) per share:
Net loss from continuing operations		(0.07	)		(0.14	)		0.07			52.4	%
Net earnings from discontinued operations		0.05			0.04			0.01			30.2	%
Net loss		(0.01	)		(0.10	)		0.09			86.5	%
Diluted earnings (loss) per share:
Net loss from continuing operations		(0.07	)		(0.14	)		0.07			52.4	%
Net earnings from discontinued operations		0.05			0.04			0.01			32.8	%
Net loss		(0.01	)		(0.10	)		0.09			86.8	%
Basic shares		77,918			76,833
Diluted Shares		77,918			76,833
FDWA shares		79,352			78,341

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings (loss) per share)
	For the Three Months Ended
	June 30,
	2015			2014
Loss from continuing operations before income taxes		(4,450	)		(15,140	)
Income taxes		732			(4,399	)
Net loss from continuing operations		(5,182	)		(10,741	)
Earnings from discontinued operations, net of tax		4,143			3,137
Net loss		(1,039	)		(7,604	)
Loss per share:
Basic		(0.01	)		(0.10	)
Diluted		(0.01	)		(0.10	)
Excluded items:
Purchased intangible asset amortization  (cost of revenue)		3,754			63
Non-cash stock compensation (cost of revenue and operating expenses)	8,123				3,925
Restructuring charges and other adjustments (gains, losses, and other)		807			7,128
Separation and transformation costs (general and administrative)		3,414			10,538
Accelerated amortization (cost of revenue)		1,442			-
Total excluded items, continuing operations		17,540			21,654
Earnings from continuing operations before income taxes
and excluding items		13,090			6,514
Income taxes		5,632			2,517
Non-GAAP net earnings		7,458			3,997
Non-GAAP earnings per share:
Basic		0.10			0.05
Diluted		0.09			0.05
Basic weighted average shares		77,918			76,833
Diluted weighted average shares		79,352			78,341

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS (LOSS) PER SHARE
(Unaudited)
(In thousands, except earnings (loss) per share)
	For the Three Months Ended
	June 30,			June 30,
	2015			2014
Basic loss per share from continuing operations:
Numerator - net loss		(5,182	)		(10,741	)
Denominator - weighted-average shares outstanding		77,918			76,833
Basic loss per share		(0.07	)		(0.14	)
Diluted loss per share from continuing operations:
Numerator - net loss		(5,182	)		(10,741	)
Denominator - weighted-average shares outstanding		77,918			76,833
Diluted loss per share		(0.07	)		(0.14	)
Basic earnings per share from discontinued operations:
Numerator - net earnings		4,143			3,137
Denominator - weighted-average shares outstanding		77,918			76,833
Basic earnings per share		0.05			0.04
Diluted earnings per share from discontinued operations:
Numerator - net earnings		4,143			3,137
Denominator - weighted-average shares outstanding		77,918			76,833
Dilutive effect of common stock options, warrants and restricted stock		-			-
		77,918			76,833
Diluted earnings per share		0.05			0.04
Diluted loss per share:
Numerator - net loss		(1,039	)		(7,604	)
Denominator - weighted-average shares outstanding		77,918			76,833
Dilutive effect of common stock options, warrants, and restricted stock		-			-
		77,918			76,833
Diluted loss per share		(0.01	)		(0.10	)

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30, 2015												June 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		176,276			20,619			-			196,895			182,349			4,334			-			186,683
Gross profit (loss)		72,019			8,609			(1,442	)		79,186			77,224			(3,631	)		-			73,593
% Gross margin		40.9	%		41.8	%		n/a			40.2	%		42.3	%		-83.8	%		n/a			39.4	%
Operating income (loss)		38,287			(8,025	)		(33,131	)		(2,869	)		46,221			(14,261	)		(45,046	)		(13,086	)
% margin		21.7	%		-38.9	%		n/a			-1.5	%		25.3	%		-329.0	%		n/a			-7.0	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-NON-GAAP
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30, 2015												June 30, 2014
	Marketing Services												Marketing Services
	& Audience Solutions			Connectivity			Corporate			Total			& Audience Solutions			Connectivity			Corporate			Total
Revenues		176,276			20,619			-			196,895			182,349			4,334			-			186,683
Gross profit (loss)		72,473			12,338			-			84,811			77,559			(3,599	)		-			73,960
% Gross margin		41.1	%		59.8	%		n/a			43.1	%		42.5	%		-83.0	%		n/a			39.6	%
Operating income (loss)		40,253			(173	)		(25,409	)		14,671			47,270			(13,852	)		(24,850	)		8,568
% margin		22.8	%		-0.8	%		n/a			7.5	%		25.9	%		-319.6	%		n/a			4.6	%

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ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30, 2015											June 30, 2014
	Marketing Services											Marketing Services
	& Audience Solutions		Connectivity			Corporate			Total			& Audience Solutions		Connectivity			Corporate			Total
Gross profit (loss)		72,019		8,609			(1,442	)		79,186			77,224		(3,631	)		-			73,593
Purchased intangible asset amortization		25		3,729			-			3,754			31		32			-			63
Non-cash stock compensation		429		-			-			429			304		-			-			304
Accelerated amortization		-		-			1,442			1,442			-		-			-			-
Gross profit (loss) before excluded items		72,473		12,338			-			84,811			77,559		(3,599	)		-			73,960
Operating income (loss)		38,287		(8,025	)		(33,131	)		(2,869	)		46,221		(14,261	)		(45,046	)		(13,086	)
Purchased intangible asset amortization		25		3,729			-			3,754			31		32			-			63
Non-cash stock compensation		1,914		4,123			2,086			8,123			1,007		377			2,541			3,925
Restructuring charges and other adjustments		27		-			780			807			11		-			7,117			7,128
Separation and transformation costs		-		-			3,414			3,414			-		-			10,538			10,538
Accelerated amortization		-		-			1,442			1,442			-		-			-			-
Operating income (loss) before excluded items		40,253		(173	)		(25,409	)		14,671			47,270		(13,852	)		(24,850	)		8,568

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
									��
	June 30,			March 31,			$				%
	2015			2015			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		123,192			141,010			(17,818	)		(12.6	%)
Trade accounts receivable, net		135,626			126,896			8,730			6.9	%
Deferred income taxes		23,111			25,610			(2,499	)		(9.8	%)
Refundable income taxes		21			5,239			(5,218	)		(99.6	%)
Restricted cash held in escrow		31,000			31,000			0			0.0	%
Other current assets		37,187			34,975			2,212			6.3	%
Assets of discontinued operations		163,768			172,284			(8,516	)		(4.9	%)
Total current assets		513,905			537,014			(23,109	)		(4.3	%)
Property and equipment		505,736			505,721			15			0.0	%
Less - accumulated depreciation and amortization		325,995			329,467			(3,472	)		(1.1	%)
Property and equipment, net		179,741			176,254			3,487			2.0	%
Software, net of accumulated amortization		63,242			68,962			(5,720	)		(8.3	%)
Goodwill		497,456			497,362			94			0.0	%
Purchased software licenses, net of accumulated amortization		9,492			9,551			(59	)		(0.6	%)
Other assets, net		31,195			33,281			(2,086	)		(6.3	%)
		1,295,031			1,322,424			(27,393	)		(2.1	%)
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		87,186			32,232			54,954			170.5	%
Trade accounts payable		39,606			30,094			9,512			31.6	%
Accrued payroll and related expenses		26,013			36,659			(10,646	)		(29.0	%)
Other accrued expenses		55,025			62,754			(7,729	)		(12.3	%)
Acquisition escrow payable		31,000			31,000			0			0.0	%
Deferred revenue		33,554			33,620			(66	)		(0.2	%)
Income taxes		-			-			0			-
Liabilities of discontinued operations		50,764			57,433			(6,669	)		(11.6	%)
Total current liabilities		323,148			283,792			39,356			13.9	%
Long-term debt		184,802			247,855			(63,053	)		(25.4	%)
Deferred income taxes		76,654			80,675			(4,021	)		(5.0	%)
Other liabilities		12,125			6,845			5,280			77.1	%
Stockholders' equity:
Common stock		12,847			12,794			53			0.4	%
Additional paid-in capital		1,045,897			1,034,526			11,371			1.1	%
Retained earnings		590,759			591,798			(1,039	)		(0.2	%)
Accumulated other comprehensive income		10,142			9,413			729			7.7	%
Treasury stock, at cost		(961,343	)		(945,274	)		(16,069	)		(1.7	%)
Total stockholders' equity		698,302			703,257			(4,955	)		(0.7	%)
		1,295,031			1,322,424			(27,393	)		(2.1	%)

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ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	June 30,
	2015			2014
Cash flows from operating activities:
Net loss		(1,039	)		(7,604	)
Earnings from discontinued operations, net of tax		(4,143	)		(3,137	)
Non-cash operating activities:
Depreciation and amortization		21,775			15,920
Loss (gain) on disposal or impairment of assets		241			(254	)
Deferred income taxes		(1,522	)		(1,843	)
Non-cash stock compensation expense		8,123			3,925
Changes in operating assets and liabilities:
Accounts receivable		(8,037	)		11,399
Other assets		809			3,590
Deferred costs		(425	)		(211	)
Accounts payable and other liabilities		(3,530	)		(29,057	)
Deferred revenue		(255	)		(8,184	)
Net cash provided by (used in) operating activities		11,997			(15,456	)
Cash flows from investing activities:
Capitalized software		(2,797	)		(4,969	)
Capital expenditures		(12,876	)		(16,778	)
Data acquisition costs		(430	)		(635	)
Net cash used in investing activities		(16,103	)		(22,382	)
Cash flows from financing activities:
Payments of debt		(8,099	)		(4,917	)
Sale of common stock, net of stock acquired for withholding taxes		2,069			(674	)
Income tax impact of stock options, warrants and restricted stock		(77	)		-
Acquisition of treasury stock		(14,951	)		-
Net cash used in financing activities		(21,058	)		(5,591	)
Cash flows from discontinued operations:
From operating activities		11,653			17,310
From investing activities		(4,484	)		704
From financing activities		(153	)		(585	)
Net cash provided by discontinued operations		7,016			17,429
Effect of exchange rate changes on cash		330			332
Net change in cash and cash equivalents		(17,818	)		(25,668	)
Cash and cash equivalents at beginning of period		141,010			418,586
Cash and cash equivalents at end of period		123,192			392,918
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest		2,185			2,875
Income taxes		(1,044	)		297
Payments on capital leases and installment payment arrangements		216			1,235
Other debt payments, excluding line of credit		8,036			4,267

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ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
	06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15
Net cash provided by operating activities - continuing operations		(15,456	)		14,325			32,890			29,372			61,131			11,997
Less:
Payments for investments		-			-			-			-			-			-
Capitalized software		(4,969	)		(5,608	)		(4,408	)		(3,602	)		(18,587	)		(2,797	)
Capital expenditures		(16,778	)		(15,362	)		(10,212	)		(14,600	)		(56,952	)		(12,876	)
Data acquisition costs		(635	)		(468	)		(394	)		(374	)		(1,871	)		(430	)
Payments on capital leases and installment payment arrangements		(650	)		(567	)		(471	)		(315	)		(2,003	)		(63	)
Other required debt payments		(4,267	)		(4,272	)		(8,027	)		(8,032	)		(24,598	)		(8,036	)
Total		(42,755	)		(11,952	)		9,378			2,449			(42,880	)		(12,205	)

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ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																						Q1 FY16 to Q1 FY15
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15			%			$
Revenues		805,153			186,683			204,248			208,246			205,734			804,911			196,895			5.5	%	10,212
Cost of revenue		472,492			113,090			122,088			122,567			123,055			480,800			117,709			4.1	%	4,619
Gross profit		332,661			73,593			82,160			85,679			82,679			324,111			79,186			7.6	%	5,593
% Gross margin		41.3	%		39.4	%		40.2	%		41.1	%		40.2	%		40.3	%		40.2	%
Operating expenses
Research and development		65,269			16,350			20,555			19,696			19,737			76,338			20,011			22.4	%	3,661
Sales and marketing		115,077			26,500			28,842			30,997			32,319			118,658			29,494			11.3	%	2,994
General and administrative		108,637			36,701			38,373			33,895			30,230			139,199			31,743			-13.5	%	(4,958	)
Gains, losses and other items, net		42,121			7,128			833			3,381			11,258			22,600			807			-88.7	%	(6,321	)
Total operating expenses		331,104			86,679			88,603			87,969			93,544			356,795			82,055			-5.3	%	(4,624	)
Income (loss) from operations		1,557			(13,086	)		(6,443	)		(2,290	)		(10,865	)		(32,684	)		(2,869	)		78.1	%	10,217
% Margin		0.2	%		-7.0	%		-3.2	%		-1.1	%		-5.3	%		-4.1	%		-1.5	%
Other income (expense)
Interest expense		(8,671	)		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		3.2	%	63
Other, net		1,814			(106	)		(163	)		35			(757	)		(991	)		304			386.8	%	410
Total other expense		(6,857	)		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		23.0	%	473
Loss from continuing operations before income taxes		(5,300	)		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)		70.6	%	10,690
Income taxes		12,040			(4,399	)		(1,326	)		(4,597	)		(4,483	)		(14,805	)		732			116.6	%	5,131
Net earnings (loss) from continuing operations		(17,340	)		(10,741	)		(7,101	)		337			(9,037	)		(26,542	)		(5,182	)		51.8	%	5,559
Earnings from discontinued operations, net of tax		26,143			3,137			5,557			3,819			2,998			15,511			4,143			32.1	%	1,006
Net earnings (loss)		8,803			(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		86.3	%	6,565
NCI		(60	)		0			0			0			0			0			0			-		0
Net earnings (loss) attributable to Acxiom		8,863			(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)		86.3	%	6,565
Diluted earnings (loss) per share		0.12			(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)		86.5	%	0.09
Basic shares		74,690			76,833			77,123			77,039			77,427			77,106			77,918
Diluted shares		76,954			78,341			78,307			78,302			79,027			78,494			79,352

14 

ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited)
(Dollars in thousands, except earnings per share)
																						Q1 FY16 to Q1 FY15
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15			%			$
Revenues		805,153			186,683			204,248			208,246			205,734			804,911			196,895			5.5	%	10,212
Cost of revenue		471,015			112,723			118,012			118,412			114,586			463,733			112,084			-0.6	%	(639	)
Gross profit		334,138			73,960			86,236			89,834			91,148			341,178			84,811			14.7	%	10,851
% Gross margin		41.5	%		39.6	%		42.2	%		43.1	%		44.3	%		42.4	%		43.1	%
Operating expenses
Research and development		63,701			15,911			17,286			16,283			16,613			66,093			16,384			3.0	%	473
Sales and marketing		112,080			25,854			27,040			28,941			30,150			111,985			28,170			9.0	%	2,316
General and administrative		94,807			23,627			27,702			23,869			22,656			97,854			25,586			8.3	%	1,959
Gains, losses and other items, net		-			-			-			-			-			-			-			-		-
Total operating expenses		270,588			65,392			72,028			69,093			69,419			275,932			70,140			7.3	%	4,748
Income from operations		63,550			8,568			14,208			20,741			21,729			65,246			14,671			71.2	%	6,103
% Margin		7.9	%		4.6	%		7.0	%		10.0	%		10.6	%		8.1	%		7.5	%
Other income (expense)
Interest expense		(8,671	)		(1,948	)		(1,821	)		(2,005	)		(1,898	)		(7,672	)		(1,885	)		3.2	%	63
Other, net		(758	)		(106	)		(163	)		35			(757	)		(991	)		304			386.8	%	410
Total other expense		(9,429	)		(2,054	)		(1,984	)		(1,970	)		(2,655	)		(8,663	)		(1,581	)		23.0	%	473
Earnings from continuing operations before income taxes		54,121			6,514			12,224			18,771			19,074			56,583			13,090			101.0	%	6,576
Income taxes		17,200			2,517			4,757			5,755			5,324			18,353			5,632			123.8	%	3,115
Net earnings from continuing operations		36,921			3,997			7,467			13,016			13,750			38,230			7,458			86.6	%	3,461
Earnings from discontinued operations, net of tax		-			-			-			-			-			-			-			-		-
Net earnings		36,921			3,997			7,467			13,016			13,750			38,230			7,458			86.6	%	3,461
NCI		(60	)		-			-			-			-			-			-			-		-
Net earnings attributable to Acxiom		36,981			3,997			7,467			13,016			13,750			38,230			7,458			86.6	%	3,461
Diluted earnings per share		0.48			0.05			0.10			0.17			0.17			0.49			0.09			84.2	%	0.04
Basic shares		74,690			76,833			77,123			77,039			77,427			77,106			77,918
Diluted shares		76,954			78,341			78,307			78,302			79,027			78,494			79,352
Income tax impact of interest-used same rate as prior to change		31.78	%		38.64	%		38.50	%		30.39	%		27.65	%

15 

ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15
Loss from continuing operations before income taxes		(5,300	)		(15,140	)		(8,427	)		(4,260	)		(13,520	)		(41,347	)		(4,450	)
Income taxes		12,040			(4,399	)		(1,446	)		(4,717	)		(4,603	)		(15,165	)		732
Net earnings (loss) from continuing operations		(17,340	)		(10,741	)		(6,981	)		457			(8,917	)		(26,182	)		(5,182	)
Earnings (loss) from discontinued operations, net of tax		26,143			3,137			5,557			3,819			2,998			15,511			4,143
Net earnings (loss)		8,803			(7,604	)		(1,424	)		4,276			(5,919	)		(10,671	)		(1,039	)
Earnings (loss) per share:
Basic		0.12			(0.10	)		(0.02	)		0.06			(0.08	)		(0.14	)		(0.01	)
Diluted		0.11			(0.10	)		(0.02	)		0.05			(0.08	)		(0.14	)		(0.01	)
Excluded items:
Purchased intangible asset amortization  (cost of revenue)		252			63			3,802			3,783			3,781			11,429			3,754
Non-cash stock compensation (cost of revenue and operating expenses)		13,206			3,925			7,725			8,450			8,216			28,316			8,123
Restructuring charges and other adjustments (gains, losses, and other)		42,121			7,128			833			3,381			11,137			22,479			807
Separation and transformation costs (general and administrative)		6,409			10,538			8,291			7,417			5,144			31,390			3,414
Accelerated amortization (cost of revenue)		-			-			-			-			4,316			4,316			1,442
Other income		(2,567	)		-			-			-			-			-			-
Total excluded items, continuing operations		59,421			21,654			20,651			23,031			32,594			97,930			17,540
Earnings from continuing operations before income taxes
and excluding items		54,121			6,514			12,224			18,771			19,074			56,583			13,090
Income taxes		17,200			2,517			4,757			5,755			5,324			18,353			5,632
Non-GAAP earnings from continuing operations		36,921			3,997			7,467			13,016			13,750			38,230			7,458
Less: noncontrolling interest		(60	)		-			-			-			-			-			-
Non-GAAP net earnings		36,981			3,997			7,467			13,016			13,750			38,230			7,458
Non-GAAP earnings per share:
Basic		0.50			0.05			0.10			0.17			0.18			0.50			0.10
Diluted		0.48			0.05			0.10			0.17			0.17			0.49			0.09
Basic weighted average shares		74,690			76,833			77,123			77,039			77,427			77,106			77,918
Diluted weighted average shares		76,954			78,341			78,307			78,302			79,027			78,494			79,352

16 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT-GAAP
(Unaudited)
(Dollars in thousands)
																						Q1 FY16 to Q1 FY15
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15			%			$
Revenues:
Marketing services and audience solutions		790,394			182,349			190,776			190,336			186,478			749,939			176,276			-3.3	%	(6,073	)
Connectivity		14,759			4,334			13,472			17,910			19,256			54,972			20,619			375.7	%	16,285
Total revenues		805,153			186,683			204,248			208,246			205,734			804,911			196,895			5.5	%	10,212
Gross profit from continuing operations:
Marketing services and audience solutions		344,034			77,224			83,409			83,715			82,594			326,942			72,019			-6.7	%	(5,205	)
Connectivity		(11,373	)		(3,631	)		(1,249	)		1,964			4,400			1,484			8,609			337.1	%	12,240
Corporate		-			-			-			-			(4,315	)		(4,315	)		(1,442	)		n/a		(1,442	)
Total gross profit from continuing operations		332,661			73,593			82,160			85,679			82,679			324,111			79,186			7.6	%	5,593
Gross margin:
Marketing services and audience solutions		43.5	%		42.3	%		43.7	%		44.0	%		44.3	%		43.6	%		40.9	%
Connectivity		-77.1	%		-83.8	%		-9.3	%		11.0	%		22.9	%		2.7	%		41.8	%
Total		41.3	%		39.4	%		40.2	%		41.1	%		40.2	%		40.3	%		40.2	%
Income (loss) from continuing operations:
Marketing services and audience solutions		208,403			46,221			52,302			51,268			48,065			197,856			38,287			-17.2	%	(7,934	)
Connectivity		(48,839	)		(14,261	)		(20,277	)		(16,876	)		(17,444	)		(68,858	)		(8,025	)		43.7	%	6,236
Corporate		(158,007	)		(45,046	)		(38,468	)		(36,682	)		(41,486	)		(161,682	)		(33,131	)		26.5	%	11,915
Total income (loss) from continuing operations		1,557			(13,086	)		(6,443	)		(2,290	)		(10,865	)		(32,684	)		(2,869	)		78.1	%	10,217
Margin:
Marketing services and audience solutions		26.4	%		25.3	%		27.4	%		26.9	%		25.8	%		26.4	%		21.7	%
Connectivity		-330.9	%		-329.0	%		-150.5	%		-94.2	%		-90.6	%		-125.3	%		-38.9	%
Total		0.2	%		-7.0	%		-3.2	%		-1.1	%		-5.3	%		-4.1	%		-1.5	%

17 

ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT - NON GAAP
(Unaudited)
(Dollars in thousands)
																						Q1 FY16 to Q1 FY15
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15			%			$
Revenues:
Marketing services and audience solutions		790,394			182,349			190,776			190,336			186,478			749,939			176,276			-3.3	%	(6,073	)
Connectivity		14,759			4,334			13,472			17,910			19,256			54,972			20,619			375.7	%	16,285
Total revenues		805,153			186,683			204,248			208,246			205,734			804,911			196,895			5.5	%	10,212
Gross profit from continuing operations:
Marketing services and audience solutions		345,356			77,559			85,029			82,863			83,012			328,463			72,473			-6.6	%	(5,086	)
Connectivity		(11,218	)		(3,599	)		1,207			6,971			8,136			12,715			12,338			442.8	%	15,937
Corporate		-			-			-			-			-			-			-			n/a		-
Total income from continuing operations		334,138			73,960			86,236			89,834			91,148			341,178			84,811			14.7	%	10,851
Gross margin:
Marketing services and audience solutions		43.7	%		42.5	%		44.6	%		43.5	%		44.5	%		43.8	%		41.1	%
Connectivity		-76.0	%		-83.0	%		9.0	%		38.9	%		42.3	%		23.1	%		59.8	%
Total		41.5	%		39.6	%		42.2	%		43.1	%		44.3	%		42.4	%		43.1	%
Income from continuing operations:
Marketing services and audience solutions		214,242			47,269			54,902			51,280			50,803			204,254			40,253			-14.8	%	(7,016	)
Connectivity		(47,555	)		(13,852	)		(13,053	)		(6,205	)		(5,809	)		(38,919	)		(173	)		98.8	%	13,679
Corporate		(103,137	)		(24,849	)		(27,641	)		(24,334	)		(23,265	)		(100,089	)		(25,409	)		-2.3	%	(560	)
Total income from continuing operations		63,550			8,568			14,208			20,741			21,729			65,246			14,671			71.2	%	6,103
Margin:
Marketing services and audience solutions		27.1	%		25.9	%		28.8	%		26.9	%		27.2	%		27.2	%		22.8	%
Connectivity		-322.2	%		-319.6	%		-96.9	%		-34.6	%		-30.2	%		-70.8	%		-0.8	%
Total		7.9	%		4.6	%		7.0	%		10.0	%		10.6	%		8.1	%		7.5	%

18 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
	March 31,			June 30,			Sept 30,			Dec 31,			March 31,			June 30,
	2014			2014			2014			2014			2015			2015
Assets
Current assets:
Cash and cash equivalents		418,586			392,918			109,810			126,891			141,010			123,192
Trade accounts receivable, net		129,216			120,186			123,055			122,320			126,896			135,626
Deferred income taxes		9,469			16,774			14,689			12,408			25,610			23,111
Refundable income taxes		11,535			11,436			5,128			11,823			5,239			21
Restricted cash held in escrow					-			31,000			31,000			31,000			31,000
Other current assets		39,245			36,904			41,428			38,443			34,975			37,187
Assets of discontinued operations		205,387			180,205			186,453			175,843			172,284			163,768
Total current assets		813,438			758,423			511,563			518,728			537,014			513,905
Property and equipment		531,298			536,315			545,455			510,943			505,721			505,736
Less - accumulated depreciation and amortization		375,047			372,457			373,341			340,530			329,467			325,995
Property and equipment, net		156,251			163,858			172,114			170,413			176,254			179,741
Software, net of accumulated amortization		39,425			40,766			79,768			77,033			68,962			63,242
Goodwill		286,876			287,163			501,960			501,081			497,362			497,456
Purchased software licenses, net of accumulated amortization		14,306			13,883			11,723			10,516			9,551			9,492
Other assets, net		13,005			13,380			38,100			36,182			33,281			31,195
		1,323,301			1,277,473			1,315,228			1,313,953			1,322,424			1,295,031
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt		26,599			29,781			32,982			32,632			32,232			87,186
Trade accounts payable		30,054			34,793			38,991			28,399			30,094			39,606
Accrued payroll and related expenses		57,917			29,306			29,553			33,524			36,659			26,013
Other accrued expenses		64,024			61,805			59,987			62,447			62,754			55,025
Acquisition escrow payable		-			-			31,000			31,000			31,000			31,000
Deferred revenue		39,611			33,914			29,702			32,882			33,620			33,554
Income taxes		241			-			-			-			-			-
Liabilities of discontinued operations		74,488			69,261			69,936			62,268			57,433			50,764
Total current liabilities		292,934			258,860			292,151			283,152			283,792			323,148
Long-term debt		280,087			271,988			263,950			255,802			247,855			184,802
Deferred income taxes		62,147			60,401			73,345			75,419			80,675			76,654
Other liabilities		5,276			6,790			7,300			9,172			6,845			12,125
Stockholders' equity:
Common stock		12,584			12,644			12,707			12,723			12,794			12,847
Additional paid-in capital		981,985			988,607			1,005,443			1,015,697			1,034,526			1,045,897
Retained earnings		602,829			595,225			593,681			597,837			591,798			590,759
Accumulated other comprehensive income		13,662			14,428			11,856			9,364			9,413			10,142
Treasury stock, at cost		(928,203	)		(931,470	)		(945,205	)		(945,213	)		(945,274	)		(961,343	)
Total stockholders' equity		682,857			679,434			678,482			690,408			703,257			698,302
		1,323,301			1,277,473			1,315,228			1,313,953			1,322,424			1,295,031

19 

ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	FY2014			06/30/14			09/30/14			12/31/14			03/31/15			FY2015			06/30/15
Cash flows from operating activities:
Net earnings (loss)		8,803			(7,604	)		(1,544	)		4,156			(6,039	)		(11,031	)		(1,039	)
Loss (earnings) from discontinued operations, net of tax		(26,143	)		(3,137	)		(5,557	)		(3,819	)		(2,998	)		(15,511	)		(4,143	)
Non-cash operating activities:
Depreciation and amortization		56,900			15,920			18,257			20,510			25,760			80,447			21,775
Loss (gain) on disposal or impairment of assets, net		(2,591	)		(254	)		47			(68	)		1,975			1,700			241
Impairment of goodwill and other		24,953			-			-			-			-			-			-
Loss on early extinguishment of debt		664			-			-			-			-			-			-
Deferred income taxes		10,935			(1,843	)		(4,179	)		4,002			(2,945	)		(4,965	)		(1,522	)
Non-cash stock compensation expense		13,206			3,925			7,725			8,450			8,216			28,316			8,123
Changes in operating assets and liabilities:
Accounts receivable		(2,797	)		11,399			(848	)		(978	)		(5,829	)		3,744			(8,037	)
Other assets		(8,609	)		3,590			1,778			(3,959	)		11,770			13,179			809
Deferred costs		(445	)		(211	)		-			(105	)		4			(312	)		(425	)
Accounts payable and other liabilities		14,369			(29,057	)		967			1,411			(1,450	)		(28,129	)		(3,530	)
Deferred revenue		6,541			(8,184	)		(2,321	)		3,290			908			(6,307	)		(255	)
Net cash provided by operating activities		95,786			(15,456	)		14,325			32,890			29,372			61,131			11,997
Cash flows from investing activities:
Capitalized software		(24,517	)		(4,969	)		(5,608	)		(4,408	)		(3,602	)		(18,587	)		(2,797	)
Capital expenditures		(25,951	)		(16,778	)		(15,362	)		(10,212	)		(14,600	)		(56,952	)		(12,876	)
Data acquisition costs		(7,745	)		(635	)		(468	)		(394	)		(374	)		(1,871	)		(430	)
Payments from investments		3,823			-			-			-			-			-			-
Net cash paid in acquisitions		(500	)		-			(265,672	)		-			-			(265,672	)		-
Net cash used in investing activities		(54,890	)		(22,382	)		(287,110	)		(15,014	)		(18,576	)		(343,082	)		(16,103	)
Cash flows from financing activities:
Proceeds from debt		300,000			-			-			-			-			-			-
Payments of debt		(231,151	)		(4,917	)		(4,839	)		(8,498	)		(8,347	)		(26,601	)		(8,099	)
Fees for debt refinancing		(4,370	)		-			-			-			-			-			-
Sale of common stock, net of stock acquired for withholding taxes		80,490			(674	)		(1,813	)		1,680			5,846			5,039			2,069
Tax impact of stock options, warrants, and restricted stock		(52,663	)		-			(9,868	)		-			-			(9,868	)		(77	)
Acquisition of treasury stock		11,295			-			-			-			4,645			4,645			(14,951	)
Acquisition of NCI		(600	)		-			-			-			-			-			-
Net cash provided (used) by financing activities		103,001			(5,591	)		(16,520	)		(6,818	)		2,144			(26,785	)		(21,058	)
Cash flows from discontinued operations:
From operating activities		69,190			17,310			11,547			9,916			5,080			43,853			11,653
From investing activities		(13,347	)		704			(4,034	)		(2,920	)		(3,004	)		(9,254	)		(4,484	)
From financing activities		(4,744	)		(585	)		(517	)		(459	)		(259	)		(1,820	)		(153	)
Net cash provided by discontinued operations		51,099			17,429			6,996			6,537			1,817			32,779			7,016
Effect of exchange rate changes on cash		616			332			(801	)		(512	)		(638	)		(1,619	)		330
Net change in cash and cash equivalents		195,612			(25,668	)		(283,110	)		17,083			14,119			(277,576	)		(17,818	)
Cash and cash equivalents at beginning of period		222,974			418,586			392,918			109,808			126,891			418,586			141,010
Cash and cash equivalents at end of period		418,586			392,918			109,808			126,891			141,010			141,010			123,192
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest		11,762			2,875			2,516			809			2,473			8,673			2,185
Income taxes		21,702			297			59			182			(4,383	)		(3,845	)		(1,044	)
Prepayment of debt		215,000			-			-			-			-			-			-
Payments on capital leases and installment payment arrangements		8,379			1,235			1,084			930			574			3,823			216
Other debt payments, excluding line of credit		12,516			4,267			4,272			8,027			8,032			24,598			8,036

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