Acxiom Corporation
Aug 4, 2014

Acxiom Announces First Quarter Results

Maintains Guidance for the Year

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its first quarter ended June 30, 2014.

First Quarter Financial Highlights

A reconciliation between GAAP and non-GAAP results is attached to this release.

During the quarter, the Company announced its acquisition of LiveRamp, an industry leader in connecting first and third party offline data with the digital marketing ecosystem. In addition, Acxiom completed the sale of its U.K. call center business, 2Touch. As a result, 2Touch results for the current and prior years are presented as discontinued operations in the consolidated statement of operations. Revenue and expenses related to discontinued operations are netted and presented on one line, net of tax, in the statement of operations.

"The integration of LiveRamp is off to a great start," said Acxiom CEO Scott Howe. "This quarter we added 7 new AOS™ clients and are in the process of introducing LiveRamp to our customer base. Exciting opportunities lie ahead as we build toward a connected ecosystem of customers, publishers and marketing applications."

First Quarter Business Highlights

Financial Outlook

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

Conference Call

Acxiom will hold a conference call at 3:30 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 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 as well as statements regarding future investments, 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 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 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, 2014, which was filed with the Securities and Exchange Commission on May 28, 2014.

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.

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

 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
               
For the Three Months Ended
June 30,
$ %
2014 2013 Variance     Variance
 
Revenue:
Marketing and data services 186,683 187,793 (1,110 ) (0.6 %)
IT Infrastructure management services 55,532   69,385   (13,853 ) (20.0 %)
Total revenue 242,215 257,178 (14,963 ) (5.8 %)
 
Operating costs and expenses:
Cost of revenue 192,303 196,105 (3,802 ) (1.9 %)
Selling, general and administrative 46,938 37,615 9,323 24.8 %
Gains, losses and other items, net 7,452   -   7,452 100.0 %
 
Total operating costs and expenses 246,693   233,720   12,973 5.6 %
 
Income (loss) from operations (4,478 ) 23,458   (27,936 ) (119.1 %)
% Margin -1.8 % 9.1 %
Other income (expense):
Interest expense (2,571 ) (3,019 ) 448 14.8 %
Other, net (413 ) 104   (517 ) (497.1 %)
 
Total other income (expense) (2,984 ) (2,915 ) (69 ) (2.4 %)
 
Earnings (loss) from continuing operations before income taxes (7,462 ) 20,543 (28,005 ) (136.3 %)
 
Income taxes (1,390 ) 8,040   (9,430 ) (117.3 %)
 
Net earnings (loss) from continuing operations (6,072 ) 12,503 (18,575 ) (148.6 %)
 
Earnings (loss) from discontinued operations, net of tax (1,532 ) 592   (2,124 ) (358.8 %)
 
Net earnings (loss) (7,604 ) 13,095 (20,699 ) (158.1 %)
 
Less: Net loss attributable to noncontrolling interest -   (85 ) 85 100.0 %
 
Net earnings (loss) attributable to Acxiom (7,604 ) 13,180   (20,784 ) (157.7 %)
 
Basic earnings (loss) per share:
Net earnings (loss) from continuing operations (0.08 ) 0.17 (0.25 ) (147.1 %)
Earnings (loss) from discontinued operations (0.02 ) 0.01   (0.03 ) (300.0 %)
Net earnings (loss) (0.10 ) 0.18   (0.28 ) (155.6 %)
 
Net earnings (loss) attributable to Acxiom stockholders (0.10 ) 0.18   (0.28 ) (155.6 %)
 
 
Diluted earnings (loss) per share:
Net earnings (loss) from continuing operations (0.08 ) 0.17 (0.25 ) (147.1 %)
Earnings (loss) from discontinued operations (0.02 ) 0.01   (0.03 ) (300.0 %)
Net earnings (loss) (0.10 ) 0.17   (0.27 ) (158.8 %)
 
Net earnings (loss) attributable to Acxiom stockholders (0.10 ) 0.17   (0.27 ) (158.8 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
       
For the Three Months Ended
June 30,
2014 2013
 
 
Earnings (loss) from continuing operations before income taxes (7,462 ) 20,543
 
Income taxes (1,390 ) 8,040  
 
Net earnings (loss) from continuing operations (6,072 ) 12,503
 
Earnings (loss) from discontinued operations, net of tax (1,532 ) 592  
 
Net earnings (loss) (7,604 ) 13,095
 
Less: Net loss attributable to noncontrolling interest -   (85 )
 
Net earnings (loss) attributable to Acxiom (7,604 ) 13,180  
 
Earnings (loss) per share attributable to Acxiom stockholders:
 
Basic (0.10 ) 0.18  
 
Diluted (0.10 ) 0.17  
 
Unusual items:
 
Live Ramp acquisition costs 780 -
Non-cash stock compensation 4,089 3,180
Restructuring charges and other adjustments 6,672 -
Separation and transformation costs 12,037   -  
 
Total unusual items, continuing operations 23,578   3,180  
 

Earnings from continuing operations before income taxes and excluding unusual items

16,116 23,723
 
Income taxes 6,204   9,252  
 
Non-GAAP earnings from continuing operations 9,912 14,471
 
Earnings from discontinued operations, net of tax -   -  
 
Non-GAAP net earnings 9,912 14,471
 
Less: Net loss attributable to noncontrolling interest -   (85 )
 
Non-GAAP Net earnings attributable to Acxiom 9,912   14,556  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.13   0.20  
 
Diluted 0.13   0.19  
 
Diluted weighted average shares 78,341   75,491  
 
 
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
June 30,
2014 2013
 
Income (loss) from operations (4,478 ) 23,458
 
Unusual items 23,578   3,180
 
Income from operations before unusual items 19,100   26,638
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
       
For the Three Months Ended
 
June 30, June 30,
2014 2013
 
Basic earnings (loss) per share from continuing operations:
Numerator - net earnings (loss) (6,072 ) 12,503
Denominator - weighted-average shares outstanding 76,833   73,679
Basic earnings (loss) per share (0.08 ) 0.17
 
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom (7,604 ) 13,180
Denominator - weighted-average shares outstanding 76,833   73,679
Basic earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders (0.10 ) 0.18
 
Diluted earnings (loss) per share from continuing operations:
Numerator - net earnings (loss) (6,072 ) 12,503
 
Denominator - weighted-average shares outstanding 76,833 73,679
Dilutive effect of common stock options, warrants and restricted stock -   1,812
76,833   75,491
 
Diluted earnings (loss) per share from continuing operations (0.08 ) 0.17
 
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders:
Numerator - net earnings (loss) attributable to Acxiom (7,604 ) 13,180
 
Denominator - weighted-average shares outstanding 76,833 73,679
Dilutive effect of common stock options, warrants, and restricted stock -   1,812
76,833   75,491
 
Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders (0.10 ) 0.17
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
       
For the Three Months Ended
 
June 30, June 30,
Revenue: 2014 2013
 
Marketing and data services 186,683 187,793
IT Infrastructure management services 55,532   69,385  
 
Total revenue 242,215   257,178  
 
 
Income from continuing operations:
 
Marketing and data services 10,272 12,697
IT Infrastructure management services 4,739 10,761
Corporate (19,489 ) -  
 
Total income (loss) from continuing operations (4,478 ) 23,458  
 
Margin:
 
Marketing and data services 5.5 % 6.8 %
IT Infrastructure management services 8.5 % 15.5 %
 
Total margin -1.8 % 9.1 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
               
June 30, March 31, $ %
2014 2014 Variance     Variance

Assets

Current assets:
Cash and cash equivalents 392,918 418,586 (25,668 ) (6.1 %)
Trade accounts receivable, net 150,605 160,718 (10,113 ) (6.3 %)
Deferred income taxes 12,285 12,870 (585 ) (4.5 %)
Refundable income taxes 11,436 11,535 (99 ) (0.9 %)
Other current assets 51,644 54,484 (2,840 ) (5.2 %)
Assets of discontinued operations 1,140   7,332   (6,192 ) (84.5 %)
 
Total current assets 620,028   665,525   (45,497 ) (6.8 %)
 
Property and equipment 854,544 852,236 2,308 0.3 %
Less - accumulated depreciation and amortization 638,222   635,330   2,892 0.5 %
 
Property and equipment, net 216,322   216,906   (584 ) (0.3 %)
 
Software, net of accumulated amortization 40,766 39,425 1,341 3.4 %
Goodwill 358,671 358,384 287 0.1 %
Purchased software licenses, net of accumulated amortization 19,079 18,584 495 2.7 %
Other assets, net 22,607   24,477   (1,870 ) (7.6 %)
 
1,277,473   1,323,301   (45,828 ) (3.5 %)
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 31,368 28,567 2,801 9.8 %
Trade accounts payable 42,803 36,179 6,624 18.3 %
Accrued payroll and related expenses 31,010 62,182 (31,172 ) (50.1 %)
Other accrued expenses 67,777 70,412 (2,635 ) (3.7 %)
Deferred revenue 43,481 47,638 (4,157 ) (8.7 %)
Income taxes - 241 (241 ) (100.0 %)
Liabilities of discontinued operations 1,681   4,250   (2,569 ) (60.4 %)
 
Total current liabilities 218,120   249,469   (31,349 ) (12.6 %)
 
Long-term debt 278,975 289,043 (10,068 ) (3.5 %)
 
Deferred income taxes 88,480 90,226 (1,746 ) (1.9 %)
 
Other liabilities 12,464 11,706 758 6.5 %
 

Stockholders' equity:

Common stock 12,644 12,584 60 0.5 %
Additional paid-in capital 988,607 981,985 6,622 0.7 %
Retained earnings 595,225 602,829 (7,604 ) (1.3 %)
Accumulated other comprehensive income 14,428 13,662 766 5.6 %
Treasury stock, at cost (931,470 ) (928,203 ) (3,267 ) (0.4 %)

Total stockholders' equity

679,434   682,857   (3,423 ) (0.5 %)
 
1,277,473   1,323,301   (45,828 ) (3.5 %)
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
       
For the Three Months Ended
June 30,
2014     2013
 
Cash flows from operating activities:
Net earnings (loss) (7,604 ) 13,095
Loss (earnings) from discontinued operations, net of tax 1,532 (592 )
Non-cash operating activities:
Depreciation and amortization 27,524 25,048
Deferred income taxes (1,843 ) (588 )
Non-cash stock compensation expense 4,089 3,181
Changes in operating assets and liabilities:
Accounts receivable 12,482 2,216
Other assets 2,736 743
Deferred costs (1,383 ) -
Accounts payable and other liabilities (29,022 ) (27,826 )
Deferred revenue (6,644 ) 1,231  
Net cash provided by operating activities 1,867   16,508  
Cash flows from investing activities:
Capitalized software (4,969 ) (5,954 )
Capital expenditures (19,001 ) (8,912 )
Data acquisition costs (635 ) (1,961 )
Net cash provided (used) by investing activities (24,605 ) (16,827 )
Cash flows from financing activities:
Payments of debt (5,502 ) (4,890 )
Sale of common stock, net of stock acquired for withholding taxes (674 ) 5,755
Acquisition of treasury stock -   (16,139 )
Net cash used by financing activities (6,176 ) (15,274 )
Cash flows from discontinued operations:
From operating activities (13 ) 341
From investing activities 2,927   (8 )
Net cash provided by discontinued operations 2,914   333  
Effect of exchange rate changes on cash 332   (84 )
 
Net change in cash and cash equivalents (25,668 ) (15,344 )
Cash and cash equivalents at beginning of period 418,586   222,974  
Cash and cash equivalents at end of period 392,918   207,630  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 2,875 3,011
Income taxes 297 1,084
Payments on capital leases and installment payment arrangements 1,235 2,900
Other debt payments, excluding line of credit 4,267 1,990
 
 

ACXIOM CORPORATION AND SUBSIDIARIES

CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
                               
                                   
06/30/13     09/30/13     12/31/13     03/31/14     YTD FY2014 06/30/14 TTM 6/30/13     TTM 6/30/14
 
Net cash provided by operating activities - continuing operations 16,508 42,255 63,791 40,687 163,241 1,867 166,312 148,600
Net cash provided by operating activities - discontinued operations 341 (1,734 ) (19 ) 3,147 1,735 (13 ) 2,536 1,381
 
Less:
Payments for investments - - 3,633 190 3,823 - - 3,823
Capitalized software (5,954 ) (7,660 ) (5,495 ) (5,408 ) (24,517 ) (4,969 ) (22,160 ) (23,532 )
Capital expenditures (8,912 ) (9,130 ) (6,681 ) (14,409 ) (39,132 ) (19,001 ) (43,565 ) (49,221 )
Data acquisition costs (1,961 ) (913 ) (1,786 ) (3,085 ) (7,745 ) (635 ) (8,229 ) (6,419 )
Discontinued operations investing activities (8 ) (139 ) (19 ) - (166 ) 2,927 (308 ) 2,769
Payments on capital leases and installment payment arrangements (2,900 ) (2,339 ) (1,675 ) (1,465 ) (8,379 ) (1,235 ) (14,852 ) (6,714 )
Other required debt payments (1,990 )     (2,004 )     (4,259 )     (4,263 )     (12,516 ) (4,267 ) (10,053 )     (14,793 )
 
Total (4,876 )     18,336       47,490       15,394       76,344   (25,326 ) 69,681       55,894  
 
 

ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
                               
                            Q1 FY15 to Q1 FY14
06/30/13     09/30/13     12/31/13     03/31/14     YTD FY2014 06/30/14 %     $
Revenue:
Marketing and data services 187,793 200,952 206,662 209,746 805,153 186,683 -0.6 % (1,110 )
IT Infrastructure management services 69,385       66,825       62,099       58,816       257,125   55,532   -20.0 %     (13,853 )
Total revenue 257,178 267,777 268,761 268,562 1,062,278 242,215 -5.8 % (14,963 )
 
Operating costs and expenses:
Cost of revenue 196,105 199,107 201,430 198,920 795,562 192,303 -1.9 % (3,802 )
Selling, general and administrative 37,615 42,859 43,383 45,519 169,376 46,938 24.8 % 9,323
Impairment of goodwill and other - - - 24,953 24,953 - 0.0 % -
Gains, losses and other items, net -       6,584       4,657       10,673       21,914   7,452   100.0 %     7,452  
 
Total operating costs and expenses 233,720 248,550 249,470 280,065 1,011,805 246,693 5.6 % 12,973
 
Income (loss) from operations 23,458 19,227 19,291 (11,503 ) 50,473 (4,478 ) -119.1 % (27,936 )
% Margin 9.1 % 7.2 % 7.2 % -4.3 % 4.8 % -1.8 %
Other expense
Interest expense (3,019 ) (2,980 ) (3,114 ) (2,558 ) (11,671 ) (2,571 ) -14.8 % 448
Other, net 104       (350 )     1,484       579       1,817   (413 ) -497.1 %     (517 )
Total other expense (2,915 ) (3,330 ) (1,630 ) (1,979 ) (9,854 ) (2,984 ) -3.5 % (69 )
 
Earnings (loss) from continuing operations before income taxes 20,543 15,897 17,661 (13,482 ) 40,619 (7,462 ) -136.3 % (28,005 )
Income taxes 8,040       6,459       3,083       12,045       29,627   (1,390 ) -117.3 %     (9,430 )
 
Net earnings (loss) from continuing operations 12,503 9,438 14,578 (25,527 ) 10,992 (6,072 ) -148.6 % (18,575 )
 
Earnings (loss) from discontinued operations, net of tax 592       426       489       (3,696 )     (2,189 ) (1,532 ) -358.8 %     (2,124 )
 
Net earnings (loss) 13,095 9,864 15,067 (29,223 ) 8,803 (7,604 ) -158.1 % (20,699 )
 

Less: Net gain (loss) attributable to noncontrolling interest

(85 )     25       -       -       (60 ) -   -100.0 %     85  
 
Net earnings (loss) attributable to Acxiom 13,180       9,839       15,067       (29,223 )     8,863   (7,604 ) -157.7 %     (20,784 )
 

Diluted earnings (loss) per share - net earnings (loss) attributable to Acxiom stockholders

0.17       0.13       0.19       (0.38 )     0.12   (0.10 ) -158.8 %     (0.27 )
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
 
                                        Q1 FY15 to Q1 FY14
06/30/13     09/30/13     12/31/13     03/31/14     YTD FY2014 06/30/14 %     $
                   
Revenue:
 
Marketing and data services 187,793 200,952 206,662 209,746 805,153 186,683 -1 % (1,110 )
IT Infrastructure management services 69,385       66,825       62,099       58,816       257,125   55,532   -20 %     (13,853 )
 
Total revenue 257,178       267,777       268,761       268,562       1,062,278   242,215   -6 %     (14,963 )
 
Income from continuing operations:
 
Marketing and data services 12,697 16,030 22,529 27,244 78,500 10,272 -19 % (2,425 )
IT Infrastructure management services 10,761 11,967 6,316 3,803 32,847 4,739 -56 % (6,022 )
Corporate -       (8,770 )     (9,554 )     (42,550 )     (60,874 ) (19,489 ) -100 %     (19,489 )
 
Total income (loss) from continuing operations 23,458       19,227       19,291       (11,503 )     50,473   (4,478 ) -119 %     (27,936 )
 
Margin:
 
Marketing and data services 6.8 % 8.0 % 10.9 % 13.0 % 9.7 % 5.5 %
IT Infrastructure management services 15.5 % 17.9 % 10.2 % 6.5 % 12.8 % 8.5 %
 
Total 9.1 % 7.2 % 7.2 % -4.3 % 4.8 % -1.8 %
 

Acxiom Corporation
Lauren Russi, 650-372-2242
Investor Relations
investor.relations@acxiom.com
EACXM

Source: Acxiom Corporation

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