Revenue Grows 6% Year-over-Year
Connectivity Revenue Run-Rate Exceeds $100
Million
Company Raises Fiscal 2016 Full Year
Guidance
Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and
software-as-a-service company, today announced financial results
for its third quarter ended December 31, 2015.
This Smart News Release features multimedia.
View the full release here:
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Financial Highlights
- Revenue: Total revenue was $221
million, up approximately 6% compared to the third quarter of last
year. Excluding an unfavorable currency impact of approximately $2
million, revenue was up 7%. US revenue of $199 million was up 8%
year-over-year.
- Operating Income (Loss): GAAP
operating loss from continuing operations improved to nearly
break-even compared to a loss of $2 million in the prior year.
Non-GAAP operating income from continuing operations improved 7% to
approximately $22 million.
- Earnings (Loss) per Share: GAAP
loss per share from continuing operations was $0.01 compared to
earnings per share of $0.00 in the prior year. Non-GAAP diluted
earnings per share from continuing operations were $0.18, up from
$0.17 a year ago.
- Operating Cash Flow: Operating
cash flow from continuing operations was $37 million, up 13% from
$33 million last year.
- Free Cash Flow to Equity: Free
cash flow to equity was $14 million, up 52% from $9 million in the
prior year. This measure excludes cash flows related to the IT
Infrastructure Management divestiture.
Segment Results
Marketing Services
- Revenue was $116 million, up 1%
compared to the third quarter of last year. US revenue of $106
million was up 3% year-over-year.
- Gross margin decreased from 36% to
33%.
- Operating income was $20 million, down
7% compared to the prior year.
- The declines in gross margin and
operating income were driven by infrastructure investments in the
US.
Audience Solutions
- Revenue was $77 million, up 1% compared
to the prior year period. US revenue of $66 million was up 3%
year-over-year.
- Gross margin improved from 52% to
59%.
- Operating income was $31 million, up 6%
compared to the prior year.
- The improvements in gross margin and
operating income were driven by revenue growth and operational cost
efficiencies, partially offset by investments in R&D and sales
and marketing.
Connectivity
- Revenue was $28 million, up
approximately 59% compared to the third quarter of last year,
driven by continued onboarding momentum. Connectivity exited the
quarter with a $100 million annualized revenue run-rate.
- Gross margin improved from 33% to
57%.
- Operating loss improved by $7 million
to a slight loss of roughly $1 million.
- The improvements in gross margin and
operating results were driven by growth in subscriptions and
royalties, partially offset by on-going investments to support
growth.
Non-GAAP results exclude items including non-cash compensation,
purchased intangible asset amortization, restructuring charges and
separation and transformation costs. A reconciliation between GAAP
and non-GAAP results is attached to this release.
“We are pleased to report a solid quarter highlighted by new
customer additions and revenue growth across all of our divisions,”
said Acxiom CEO Scott Howe. “Our divisional structure is beginning
to pay dividends, and the investments we are making against our
long-term strategy continue to build the foundation for sustainable
future growth.”
Business Highlights
- Connectivity added over 20 new
customers during the quarter and added 25 new partner
integrations. Marketers can now onboard and distribute their data
to a growing network of more than 275 marketing platforms and data
providers.
- Acxiom powered $122 million of gross
media spend in the third quarter, up 66% year-over-year. On a
trailing twelve-month basis, Acxiom powered $317 million of gross
media spend, up 107% over the comparable period.
- Acxiom expanded its addressable TV
offering with the acquisition of the Audience Interconnect data
platform from Allant Group. This capacity provides partners
with the leading ability to reach targeted US households via
data-driven ad campaigns. Ad sellers, agencies and brands can
activate data across an expanded ecosystem that includes TV
partners representing nearly 50 million addressable homes and over
100 million individuals.
- Dennis Self was appointed President
and General Manager of Marketing Services. Self has held
several mission critical roles within Acxiom, including senior vice
president of delivery for Marketing Services, where he led the
transformation and modernization of the company’s client delivery
function. Prior to that, he served as the company’s chief
information officer and senior vice president of technical
operations.
- Acxiom repurchased 463,000 shares
for approximately $10 million during the quarter. Since
inception of the share repurchase program in August 2011, Acxiom
has repurchased 14.8 million shares for $240 million.
Financial Outlook
Acxiom’s guidance excludes the impact of non-cash compensation,
purchased intangible asset amortization, restructuring charges and
separation and transformation costs. Estimates for fiscal 2016 have
been raised as follows:
- Revenue from continuing operations
in the range of $835 million to $840 million as compared to
Acxiom’s previous estimate of $815 million to $840 million
- Non-GAAP diluted earnings per share
from continuing operations to be as much as $0.54 as compared
to the company’s previous estimate of between $0.45 and $0.50
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CT 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.
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 contains
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 current and 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.
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 (loss) per share) For the
Three Months Ended December 31, $ % 2015 2014 Variance Variance
Revenues 221,193 208,246 12,947 6.2 % Cost of revenue
125,735 125,807 (72 ) (0.1 %) Gross profit 95,458
82,439 13,019 15.8 %
% Gross margin 43.2 %
39.6 % Operating expenses: Research and
development 18,400 18,973 (573 ) (3.0 %) Sales and marketing 36,581
30,554 6,027 19.7 % General and administrative 36,793 31,821 4,972
15.6 % Gains, losses and other items, net 4,058 3,381
677 20.0 % Total operating expenses 95,832 84,729
11,103 13.1 % Loss from operations (374 ) (2,290 ) 1,916
83.7 % %
Margin -0.2 % -1.1 %
Other income (expense): Interest expense (1,948 ) (2,005 ) 57 2.8 %
Other, net 303 35 268 765.7 % Total other expense
(1,645 ) (1,970 ) 325 16.5 % Loss from continuing operations
before income taxes (2,019 ) (4,260 ) 2,241 52.6 % Income
taxes (1,580 ) (4,597 ) 3,017 65.6 % Net earnings (loss)
from continuing operations (439 ) 337 (776 ) (230.3 %)
Earnings (loss) from discontinued operations, net of tax (971 )
3,819 (4,790 ) (125.4 %) Net earnings (loss) (1,410 )
4,156 (5,566 ) (133.9 %) Basic earnings (loss) per
share: Net earnings (loss) from continuing operations (0.01 ) 0.00
(0.01 ) (228.9 %) Net earnings (loss) from discontinued operations
(0.01 ) 0.05 (0.06 ) (125.2 %) Net earnings (loss) (0.02 )
0.05 (0.07 ) (133.6 %) Diluted earnings (loss)
per share: Net earnings (loss) from continuing operations (0.01 )
0.00 (0.01 ) (231.1 %) Net earnings (loss) from discontinued
operations (0.01 ) 0.05 (0.06 ) (125.6 %) Net earnings
(loss) (0.02 ) 0.05 (0.07 ) (134.1 %) Some earnings
(loss) per share amounts may not add due to rounding ACXIOM
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Dollars in thousands, except earnings (loss) per
share) For the Nine Months Ended
December 31, $ % 2015 2014 Variance Variance Revenues
625,433 599,177 26,256 4.4 % Cost of revenue 364,756
366,329 (1,573 ) (0.4 %) Gross profit 260,677 232,848 27,829
12.0 %
% Gross margin 41.7 % 38.9
% Operating expenses: Research and development 57,489
55,121 2,368 4.3 % Sales and marketing 100,334 85,410 14,924 17.5 %
General and administrative 100,055 102,794 (2,739 ) (2.7 %) Gains,
losses and other items, net 8,098 11,342 (3,244 )
(28.6 %) Total operating expenses 265,976 254,667
11,309 4.4 % Loss from operations (5,299 ) (21,819 ) 16,520
75.7 % %
Margin -0.8 % -3.6 %
Other income (expense): Interest expense (5,789 ) (5,774 ) (15 )
(0.3 %) Other, net 666 (234 ) 900 384.6 % Total other
expense (5,123 ) (6,008 ) 885 14.7 % Loss from continuing
operations before income taxes (10,422 ) (27,827 ) 17,405 62.5 %
Income taxes (3,456 ) (10,322 ) 6,866 66.5 % Net loss
from continuing operations (6,966 ) (17,505 ) 10,539 60.2 %
Earnings from discontinued operations, net of tax 15,240
12,513 2,727 21.8 % Net earnings (loss) 8,274
(4,992 ) 13,266 265.7 % Basic earnings (loss) per share: Net
loss from continuing operations (0.09 ) (0.23 ) 0.14 60.7 % Net
earnings from discontinued operations 0.20 0.16 0.03
20.4 % Net earnings (loss) 0.11 (0.06 ) 0.17 263.8 %
Diluted earnings (loss) per share: Net loss from continuing
operations (0.09 ) (0.23 ) 0.14 60.7 % Net earnings from
discontinued operations 0.20 0.16 0.03 20.4 % Net
earnings (loss) 0.11 (0.06 ) 0.17 263.8 % Some
earnings (loss) per share amounts may not add due to rounding
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 For the Nine Months Ended December 31, December 31, 2015 2014
2015 2014 Loss from continuing operations before
income taxes (2,019 ) (4,260 ) (10,422 ) (27,827 ) Income
taxes (1,580 ) (4,597 ) (3,456 ) (10,322 ) Net loss from
continuing operations (439 ) 337 (6,966 ) (17,505 ) Earnings
from discontinued operations, net of tax (971 ) 3,819 15,240
12,513 Net earnings (loss) (1,410 ) 4,156
8,274 (4,992 ) Earnings (loss) per share:
Basic (0.02 ) 0.05 0.11 (0.06 ) Diluted
(0.02 ) 0.05 0.11 (0.06 ) Excluded items:
Purchased intangible asset amortization (cost of revenue) 3,754
3,783 11,262 7,673 Non-cash stock compensation (cost of revenue and
operating expenses) 8,046 8,450 23,529 20,100 Restructuring charges
and other adjustments (gains, losses, and other) 4,058 3,381 8,098
11,342 Separation and transformation costs (general and
administrative) 6,628 7,417 16,140 26,246 Accelerated amortization
(cost of revenue) 78 - 1,598 -
Total excluded items, continuing operations 22,564 23,031
60,627 65,361 Earnings from continuing
operations before income taxes and excluding items 20,545 18,771
50,205 37,534 Income taxes 6,399 5,755 17,194
13,029 Non-GAAP net earnings 14,146
13,016 33,011 24,505 Non-GAAP earnings
per share: Basic 0.18 0.17 0.42 0.32
Diluted 0.18 0.17 0.42 0.31
Basic weighted average shares 77,831 77,039
77,903 76,998 Diluted weighted average
shares 79,346 78,302 79,336 78,317
ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS
(LOSS) PER SHARE (Unaudited) (In thousands, except earnings (loss)
per share) For the Three Months Ended
December 31, December 31, 2015 2014 Basic earnings per share
from continuing operations: Numerator - net earnings (loss) (439 )
337 Denominator - weighted-average shares outstanding 77,831
77,039 Basic earnings (loss) per share (0.01 ) 0.00
Diluted earnings per share from continuing operations: Numerator -
net earnings (loss) (439 ) 337 Denominator -
weighted-average shares outstanding 77,831 77,039 Dilutive effect
of common stock options, warrants and restricted stock -
1,263 77,831 78,302 Diluted earnings (loss) per share
(0.01 ) 0.00 Basic earnings (loss) per share from
discontinued operations: Numerator - net earnings (loss) (971 )
3,819 Denominator - weighted-average shares outstanding
77,831 77,039 Basic earnings (loss) per share (0.01 ) 0.05
Diluted earnings (loss) per share from discontinued
operations: Numerator - net earnings (loss) (971 ) 3,819
Denominator - weighted-average shares outstanding 77,831 77,039
Dilutive effect of common stock options, warrants and restricted
stock - 1,263 77,831 78,302 Diluted earnings
(loss) per share (0.01 ) 0.05 Basic earnings (loss) per
share: Numerator - net earnings (loss) (1,410 ) 4,156
Denominator - weighted-average shares outstanding 77,831
77,039 Basic earnings (loss) per share (0.02 ) 0.05 Diluted
earnings (loss) per share: Numerator - net earnings (loss) (1,410 )
4,156 Denominator - weighted-average shares outstanding
77,831 77,039 Dilutive effect of common stock options, warrants,
and restricted stock - 1,263 77,831 78,302
Diluted earnings (loss) per share (0.02 ) 0.05 ACXIOM
CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS (LOSS) PER
SHARE (Unaudited) (In thousands, except earnings (loss) per share)
For the Nine Months Ended December 31,
December 31, 2015 2014 Basic loss per share from continuing
operations: Numerator - net loss (6,966 ) (17,505 )
Denominator - weighted-average shares outstanding 77,903
76,998 Basic loss per share (0.09 ) (0.23 ) Diluted
loss per share from continuing operations: Numerator - net loss
(6,966 ) (17,505 ) Denominator - weighted-average shares
outstanding 77,903 76,998 Diluted loss per share
(0.09 ) (0.23 ) Basic earnings per share from discontinued
operations: Numerator - net earnings 15,240 12,513
Denominator - weighted-average shares outstanding 77,903
76,998 Basic earnings per share 0.20 0.16
Diluted earnings per share from discontinued operations:
Numerator - net earnings 15,240 12,513 Denominator -
weighted-average shares outstanding 77,903 76,998
Diluted earnings per share 0.20 0.16 Diluted
loss per share: Numerator - net earnings (loss) 8,274 (4,992 )
Denominator - weighted-average shares outstanding 77,903
76,998 Diluted earnings (loss) per share 0.11
(0.06 ) ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY
SEGMENT (Unaudited) (Dollars in thousands)
For the Three Months Ended December 31, $ % 2015 2014
Variance Variance Revenues Marketing Services 115,725
114,403 1,322 1.2 % Audience Solutions 77,046 75,933 1,113 1.5 %
Connectivity 28,422 17,910 10,512 58.7 % Total
operating segment revenues 221,193 208,246 12,947 6.2 %
Gross profit Marketing Services 38,561 41,572 (3,011 ) (7.2 %)
Audience Solutions 45,265 39,215 6,050 15.4 % Connectivity 16,130
5,858 10,272 175.3 % Total operating segment gross
profit 99,956 86,645 13,311 15.4 % Gross profit margin %
Marketing Services 33.3 % 36.3 % Audience Solutions 58.8 % 51.6 %
Connectivity 56.8 % 32.7 % Total operating segment gross margin
45.2 % 41.6 % Income (loss) from operations Marketing
Services 20,309 21,859 (1,550 ) (7.1 %) Audience Solutions 30,723
28,919 1,804 6.2 % Connectivity (1,015 ) (7,802 ) 6,787 87.0 %
Total operating segment income from operations 50,017 42,976 7,041
16.4 % Operating income (loss) margin % Marketing Services
17.5 % 19.1 % Audience Solutions 39.9 % 38.1 % Connectivity -3.6 %
-43.6 % Total operating segment operating margin 22.6 % 20.6 %
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT
(Unaudited) (Dollars in thousands)
For the Nine Months Ended December 31, $ % 2015 2014
Variance Variance Revenues Marketing Services 336,430
336,441 (11 ) (0.0 %) Audience Solutions 217,718 227,020 (9,302 )
(4.1 %) Connectivity 71,285 35,716 35,569 99.6 %
Total operating segment revenues 625,433 599,177 26,256 4.4 %
Gross profit Marketing Services 112,139 120,275 (8,136 )
(6.8 %) Audience Solutions 121,258 116,245 5,013 4.3 % Connectivity
41,582 5,088 36,494 717.3 % Total operating segment
gross profit 274,979 241,608 33,371 13.8 % Gross profit
margin % Marketing Services 33.3 % 35.7 % Audience Solutions 55.7 %
51.2 % Connectivity 58.3 % 14.2 % Total operating segment gross
margin 44.0 % 40.3 % Income (loss) from operations Marketing
Services 55,070 63,263 (8,193 ) (13.0 %) Audience Solutions 80,000
84,484 (4,484 ) (5.3 %) Connectivity (2,874 ) (34,043 ) 31,169 91.6
% Total operating segment income from operations 132,196 113,704
18,492 16.3 % Operating income (loss) margin % Marketing
Services 16.4 % 18.8 % Audience Solutions 36.7 % 37.2 %
Connectivity -4.0 % -95.3 % Total operating segment operating
margin 21.1 % 19.0 % ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF SEGMENT RESULTS (Unaudited) (Dollars in
thousands) For the Three Months Ended
For the Nine Months Ended December 31, December 31, 2015
2014 2015 2014 Total operating segment gross profit 99,956
86,645 274,979 241,608 Less: Purchased intangible asset
amortization 3,754 3,783 11,262 7,673 Non-cash stock compensation
666 423 1,442 1,087 Accelerated amortization 78 -
1,598 - Gross profit 95,458 82,439
260,677 232,848 Total operating
segment income from operations 50,017 42,976 132,196 113,704
Less: Corporate expenses 27,827 22,235 76,868 70,162 Purchased
intangible asset amortization 3,754 3,783 11,262 7,673 Non-cash
stock compensation 8,046 8,450 23,529 20,100 Gains, losses and
other items, net 4,058 3,381 8,098 11,342 Separation and
transformation costs 6,628 7,417 16,140 26,246 Accelerated
amortization 78 - 1,598 - Loss
from operations (374 ) (2,290 ) (5,299 ) (21,819 )
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
December 31, March 31, $ % 2015 2015 Variance Variance
Assets
Current assets: Cash and cash equivalents 186,390 141,010 45,380
32.2 % Trade accounts receivable, net 140,821 126,896 13,925 11.0 %
Deferred income taxes 16,475 25,610 (9,135 ) (35.7 %) Refundable
income taxes 6,899 5,239 1,660 31.7 % Restricted cash held in
escrow - 31,000 (31,000 ) (100.0 %) Other current assets 35,918
34,975 943 2.7 % Assets of discontinued operations - 172,284
(172,284 ) (100.0 %) Total current assets 386,503
537,014 (150,511 ) (28.0 %) Property and
equipment 520,262 505,721 14,541 2.9 % Less - accumulated
depreciation and amortization 341,868 329,467 12,401
3.8 % Property and equipment, net 178,394 176,254
2,140 1.2 % Software, net of accumulated amortization
58,947 68,962 (10,015 ) (14.5 %) Goodwill 497,628 497,362 266 0.1 %
Purchased software licenses, net of accumulated amortization 10,043
9,551 492 5.2 % Other assets, net 30,049 33,281
(3,232 ) (9.7 %) 1,161,564 1,322,424 (160,860
) (12.2 %)
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 32,223
32,232 (9 ) (0.0 %) Trade accounts payable 30,690 30,094 596 2.0 %
Accrued payroll and related expenses 46,662 36,659 10,003 27.3 %
Other accrued expenses 49,705 62,754 (13,049 ) (20.8 %) Acquisition
escrow payable - 31,000 (31,000 ) (100.0 %) Deferred revenue 42,681
33,620 9,061 27.0 % Liabilities of discontinued operations 4,065
57,433 (53,368 ) (92.9 %) Total current
liabilities 206,026 283,792 (77,766 ) (27.4 %)
Long-term debt 168,681 247,855 (79,174 ) (31.9 %) Deferred
income taxes 66,709 80,675 (13,966 ) (17.3 %) Other
liabilities 15,705 6,845 8,860 129.4 % Stockholders' equity:
Common stock 12,988 12,794 194 1.5 % Additional paid-in capital
1,071,145 1,034,526 36,619 3.5 % Retained earnings 600,072 591,798
8,274 1.4 % Accumulated other comprehensive income 8,141 9,413
(1,272 ) (13.5 %) Treasury stock, at cost (987,903 ) (945,274 )
(42,629 ) (4.5 %) Total stockholders' equity 704,443 703,257
1,186 0.2 % 1,161,564 1,322,424
(160,860 ) (12.2 %) ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands) For the Three Months Ended
December 31, 2015 2014 Cash
flows from operating activities: Net earnings (loss) (1,410 ) 4,156
Loss (earnings) from discontinued operations, net of tax 971 (3,819
) Non-cash operating activities: Depreciation and amortization
20,811 20,510 Loss (gain) on disposal or impairment of assets 48
(68 ) Deferred income taxes (5,140 ) 4,002 Non-cash stock
compensation expense 8,046 8,450 Changes in operating assets and
liabilities: Accounts receivable (5,957 ) (978 ) Other assets (622
) (4,064 ) Accounts payable and other liabilities 13,518 1,411
Deferred revenue 6,753 3,290 Net cash provided by
operating activities 37,018 32,890 Cash flows from
investing activities: Capitalized software (3,627 ) (4,408 )
Capital expenditures (10,702 ) (10,212 ) Data acquisition costs
(424 ) (394 ) Net cash paid in acquisitions (5,386 ) - Net
cash used in investing activities (20,139 ) (15,014 ) Cash flows
from financing activities: Payments of debt (8,045 ) (8,498 ) Sale
of common stock, net of stock acquired for withholding taxes 2,241
1,680 Excess tax benefits from stock-based compensation 2,574 -
Acquisition of treasury stock (10,274 ) - Net cash used in
financing activities (13,504 ) (6,818 ) Cash flows from
discontinued operations: From operating activities 562 9,916 From
investing activities 1,675 (2,920 ) From financing activities -
(459 ) Net cash provided by discontinued operations 2,237
6,537 Effect of exchange rate changes on cash (167 )
(512 ) Net change in cash and cash equivalents 5,445 17,083
Cash and cash equivalents at beginning of period 180,945
109,808 Cash and cash equivalents at end of period 186,390
126,891
Supplemental cash flow
information: Cash paid during the period for: Interest 1,883
809 Income taxes 738 182 Payments on capital leases and installment
payment arrangements - 930 Other debt payments, excluding line of
credit 8,045 8,027 ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands) For the Nine Months Ended
December 31, 2015 2014 Cash
flows from operating activities: Net earnings (loss) 8,274 (4,992 )
Earnings from discontinued operations, net of tax (15,240 ) (12,513
) Non-cash operating activities: Depreciation and amortization
63,221 54,687 Loss (gain) on disposal and impairment of goodwill
and other assets 938 (275 ) Deferred income taxes (4,856 ) (2,020 )
Non-cash stock compensation expense 23,529 20,100 Changes in
operating assets and liabilities: Accounts receivable (15,238 )
9,573 Other assets (1,820 ) 1,409 Deferred costs (823 ) (316 )
Accounts payable and other liabilities 3,182 (26,679 ) Deferred
revenue 9,205 (7,215 ) Net cash provided by operating
activities 70,372 31,759 Cash flows from investing
activities: Capitalized software (10,360 ) (14,985 ) Capital
expenditures (33,822 ) (42,352 ) Data acquisition costs (1,135 )
(1,497 ) Net cash paid in acquisitions (5,386 ) (265,672 ) Net cash
used in investing activities (50,703 ) (324,506 ) Cash flows from
financing activities: Payments of debt (79,183 ) (18,254 ) Sale of
common stock, net of stock acquired for withholding taxes 6,343
(807 ) Excess tax benefits from stock-based compensation 2,022 -
Acquisition of treasury stock (37,535 ) (9,868 ) Net cash used in
financing activities (108,353 ) (28,929 ) Cash flows from
discontinued operations: From operating activities 10,277 38,773
From investing activities 124,506 (6,250 ) From financing
activities (206 ) (1,561 ) Net cash provided by discontinued
operations 134,577 30,962 Effect of exchange rate
changes on cash (513 ) (981 ) Net change in cash and cash
equivalents 45,380 (291,695 ) Cash and cash equivalents at
beginning of period 141,010 418,586 Cash and cash
equivalents at end of period 186,390 126,891
Supplemental cash flow information: Cash paid during the
period for: Interest 6,220 6,200 Income taxes 6,004 538 Payments on
capital leases and installment payment arrangements 269 3,249 Other
debt payments, excluding line of credit 24,120 16,566 Prepayment of
debt 55,000 -
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 YTD
FY2015 06/30/15 09/30/15 12/31/15 YTD FY2016
Net cash provided by operating activities - continuing
operations (15,456 ) 14,325 32,890 29,372 61,131 11,997 21,357
37,018 70,372 Less: Capitalized software (4,969 ) (5,608 )
(4,408 ) (3,602 ) (18,587 ) (2,797 ) (3,936 ) (3,627 ) (10,360 )
Capital expenditures (16,778 ) (15,362 ) (10,212 ) (14,600 )
(56,952 ) (12,876 ) (10,244 ) (10,702 ) (33,822 ) Data acquisition
costs (635 ) (468 ) (394 ) (374 ) (1,871 ) (430 ) (281 ) (424 )
(1,135 ) Payments on capital leases and installment payment
arrangements (650 ) (567 ) (471 ) (315 ) (2,003 ) (63 ) - - (63 )
Other required debt payments (4,267 ) (4,272 ) (8,027
) (8,032 ) (24,598 ) (8,036 ) (8,039 )
(8,045 ) (24,120 ) Total (42,755 ) (11,952 )
9,378 2,449 (42,880 ) (12,205 )
(1,143 ) 14,220 872
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP (Unaudited) (Dollars in
thousands, except earnings per share)
Q3 FY16 to Q3 FY15 06/30/14
09/30/14 12/31/14 03/31/15 YTD FY2015 06/30/15
09/30/15 12/31/15 YTD FY2016 % $
Revenues 186,683 204,248 208,246 205,734 804,911 196,895 207,345
221,193 625,433 6.2 % 12,947 Cost of revenue 115,564
124,958 125,807 127,708
494,037 117,709 121,312
125,735 364,756 -0.1 % (72 ) Gross profit
71,119 79,290 82,439 78,026 310,874 79,186 86,033 95,458 260,677
15.8 % 13,019
% Gross margin 38.1 %
38.8 % 39.6 % 37.9 %
38.6 % 40.2 % 41.5 %
43.2 % 41.7 % Operating expenses
Research and development 16,350 19,798 18,973 19,080 74,201 20,011
19,078 18,400 57,489 -3.0 % (573 ) Sales and marketing 26,265
28,591 30,554 31,084 116,494 29,494 34,259 36,581 100,334 19.7 %
6,027 General and administrative 34,462 36,511 31,821 27,469
130,263 31,743 31,519 36,793 100,055 15.6 % 4,972 Gains, losses and
other items, net 7,128 833 3,381
11,258 22,600 807 3,233
4,058 8,098 20.0 % 677 Total
operating expenses 84,205 85,733 84,729 88,891 343,558 82,055
88,089 95,832 265,976 13.1 % 11,103 Loss from operations
(13,086 ) (6,443 ) (2,290 ) (10,865 ) (32,684 ) (2,869 ) (2,056 )
(374 ) (5,299 ) 83.7 % 1,916
% Margin -7.0 %
-3.2 % -1.1 % -5.3 %
-4.1 % -1.5 % -1.0 %
-0.2 % -0.8 % Other income (expense)
Interest expense (1,948 ) (1,821 ) (2,005 ) (1,898 ) (7,672 )
(1,885 ) (1,956 ) (1,948 ) (5,789 ) 2.8 % 57 Other, net (106 )
(163 ) 35 (757 ) (991 ) 304
59 303 666 765.7 %
268 Total other expense (2,054 ) (1,984 ) (1,970 ) (2,655 ) (8,663
) (1,581 ) (1,897 ) (1,645 ) (5,123 ) 16.5 % 325 Loss from
continuing operations before income taxes (15,140 ) (8,427 ) (4,260
) (13,520 ) (41,347 ) (4,450 ) (3,953 ) (2,019 ) (10,422 ) 52.6 %
2,241 Income taxes (4,399 ) (1,326 ) (4,597 )
(4,483 ) (14,805 ) 732 (2,608 ) (1,580
) (3,456 ) 65.6 % 3,017 Net earnings (loss) from
continuing operations (10,741 ) (7,101 ) 337 (9,037 ) (26,542 )
(5,182 ) (1,345 ) (439 ) (6,966 ) -230.3 % (776 ) Earnings
from discontinued operations, net of tax 3,137 5,557
3,819 2,998 15,511
4,143 12,068 (971 ) 15,240
-125.4 % (4,790 ) Net earnings (loss) (7,604 ) (1,544
) 4,156 (6,039 ) (11,031 ) (1,039 ) 10,723 (1,410 ) 8,274 -133.9 %
(5,566 ) Diluted earnings (loss) per share (0.10 )
(0.02 ) 0.05 (0.08 ) (0.14 ) (0.01 )
0.14 (0.02 ) 0.11 -134.1 % (0.07
) Diluted earnings (loss) per share continuing operations
(0.14 ) (0.09 ) 0.00 (0.12 )
(0.34 ) (0.07 ) (0.02 ) (0.01 ) (0.09 ) -231.1
% (0.01 )
ACXIOM CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS-NON GAAP
(Unaudited) (Dollars in thousands, except earnings per share)
Q3 FY16 to
Q3 FY15 06/30/14 09/30/14 12/31/14 03/31/15
YTD FY2015 06/30/15 09/30/15 12/31/15
YTD FY2016 % $ Revenues 186,683 204,248 208,246 205,734
804,911 196,895 207,345 221,193 625,433 6.2 % 12,947 Cost of
revenue 115,197 120,771 121,601
119,239 476,808 112,084
117,131 121,237 350,452 -0.3 %
(364 ) Gross profit 71,486 83,477 86,645 86,495 328,103 84,811
90,214 99,956 274,981 15.4 % 13,311
% Gross margin
38.3 % 40.9 % 41.6 %
42.0 % 40.8 % 43.1 %
43.5 % 45.2 % 44.0 %
Operating expenses Research and development 15,911 16,529
15,559 15,956 63,955 16,384 15,400 15,647 47,431 0.6 % 88 Sales and
marketing 25,619 26,789 28,498 28,915 109,821 28,170 32,945 34,664
95,779 21.6 % 6,166 General and administrative 21,388 25,926 21,847
19,895 89,056 25,586 23,402 27,455 76,443 25.7 % 5,608 Gains,
losses and other items, net - - -
- - - -
- - - - Total operating expenses 62,918
69,244 65,904 64,766 262,832 70,140 71,747 77,766 219,653 18.0 %
11,862 Income from operations 8,568 14,233 20,741 21,729
65,271 14,671 18,467 22,190 55,328 7.0 % 1,449
% Margin
4.6 % 7.0 % 10.0 %
10.6 % 8.1 % 7.5 %
8.9 % 10.0 % 8.8 % Other
income (expense) Interest expense (1,948 ) (1,821 ) (2,005 ) (1,898
) (7,672 ) (1,885 ) (1,956 ) (1,948 ) (5,789 ) 2.8 % 57 Other, net
(106 ) (163 ) 35 (757 ) (991 )
304 59 303 666
765.7 % 268 Total other expense (2,054 ) (1,984 ) (1,970 ) (2,655 )
(8,663 ) (1,581 ) (1,897 ) (1,645 ) (5,123 ) 16.5 % 325
Earnings from continuing operations before income taxes 6,514
12,249 18,771 19,074 56,608 13,090 16,570 20,545 50,205 9.5 % 1,774
Income taxes 2,517 4,757 5,755
5,324 18,353 5,632 5,163
6,399 17,194 11.2 % 644
Net earnings from continuing operations 3,997 7,492 13,016 13,750
38,255 7,458 11,407 14,146 33,011 8.7 % 1,130 Earnings from
discontinued operations, net of tax - -
- - - - -
- - - - Net earnings 3,997 7,492
13,016 13,750 38,255 7,458 11,407 14,146 33,011 8.7 % 1,130
Diluted earnings per share 0.05 0.10
0.17 0.17 0.49 0.09
0.14 0.18 0.42 7.3 % 0.01
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP
TO NON-GAAP EPS (Unaudited) (Dollars in thousands, except earnings
per share)
06/30/14 09/30/14 12/31/14 03/31/15
FY2015 06/30/15 09/30/15 12/31/15 YTD
FY2016 Loss from continuing operations before income
taxes (15,140 ) (8,427 ) (4,260 ) (13,520 ) (41,347 ) (4,450 )
(3,953 ) (2,019 ) (10,422 ) Income taxes (4,399 )
(1,326 ) (4,597 ) (4,483 ) (14,805 ) 732
(2,608 ) (1,580 ) (3,456 ) Net
earnings (loss) from continuing operations (10,741 ) (7,101 ) 337
(9,037 ) (26,542 ) (5,182 ) (1,345 ) (439 ) (6,966 )
Earnings loss from discontinued operations, net of tax 3,137
5,557 3,819 2,998
15,511 4,143 12,068 (971 )
15,240 Net earnings (loss) (7,604 )
(1,544 ) 4,156 (6,039 ) (11,031 )
(1,039 ) 10,723 (1,410 ) 8,274
Earnings (loss) per share: Basic (0.10 ) (0.02
) 0.05 (0.08 ) (0.14 ) (0.01 )
0.14 (0.02 ) 0.11 Diluted (0.10
) (0.02 ) 0.05 (0.08 ) (0.14 )
(0.01 ) 0.14 (0.02 ) 0.11
Unusual items: Purchased intangible asset amortization (cost of
revenue) 63 3,827 3,783 3,781 11,454 3,754 3,754 3,754 11,262
Non-cash stock compensation (cost of revenue and operating
expenses) 3,925 7,725 8,450 8,216 28,316 8,123 7,360 8,046 23,529
Restructuring charges and other adjustments (gains, losses, and
other) 7,128 833 3,381 11,258 22,600 807 3,233 4,058 8,098
Separation and transformation costs (general and administrative)
10,538 8,291 7,417 5,023 31,269 3,414 6,098 6,628 16,140
Accelerated amortization (cost of revenue) - -
- 4,316 4,316 1,442
78 78 1,598
Total unusual items, continuing operations 21,654
20,676 23,031 32,594
97,955 17,540 20,523 22,564
60,627 Earnings from continuing
operations before income taxes and excluding unusual items 6,514
12,249 18,771 19,074 56,608 13,090 16,570 20,545 50,205
Income taxes 2,517 4,757 5,755
5,324 18,353 5,632 5,163
6,399 17,194 Non-GAAP net
earnings 3,997 7,492 13,016
13,750 38,255 7,458
11,407 14,146 33,011
Non-GAAP earnings per share: Basic 0.05 0.10
0.17 0.18 0.50
0.10 0.15 0.18 0.42
Diluted 0.05 0.10 0.17
0.17 0.49 0.09
0.14 0.18 0.42 Basic
weighted average shares 76,833 77,123
77,039 77,427 77,106 77,918
77,960 77,831 77,903
Diluted weighted average shares 78,341
78,307 78,302 79,027
78,494 79,352 79,310 79,346
79,336 ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)
Q3 FY16 to Q3 FY15 06/30/14
09/30/14 12/31/14 03/31/15 YTD FY2015
06/30/15 09/30/15 12/31/15 YTD FY2016 %
$ Revenues:
Marketing services 109,288 112,750 114,403 109,662 446,103 107,726
112,979 115,725 336,430 1.2 % 1,322 Audience Solutions 73,061
78,026 75,933 76,816 303,837 68,550 72,122 77,046 217,718 1.5 %
1,113 Connectivity 4,334 13,472 17,910
19,256 54,972 20,619
22,244 28,422 71,285 58.7
% 10,512 Total operating segment revenues 186,683
204,248 208,246 205,735
804,911 196,895 207,345
221,193 625,433 6.2 % 12,947 Gross
profit: Marketing services 39,452 39,251 41,572 36,169
156,444 36,033 37,545 38,561 112,139 -7.2 % (3,011 ) Audience
Solutions 35,605 41,425 39,215 42,141 158,386 36,823 39,170 45,265
121,258 15.4 % 6,050 Connectivity (3,527 ) 2,757
5,858 8,234 13,322 11,953
13,499 16,130 41,582
175.3 % 10,272 Total operating segment gross profit
71,530 83,433 86,645
86,544 328,152 84,809 90,214
99,956 274,979 15.4 % 13,311
Gross margin: Marketing services 36.1 % 34.8 % 36.3 %
33.0 % 35.1 % 33.4 % 33.2 % 33.3 % 33.3 % Audience Solutions 48.7 %
53.1 % 51.6 % 54.9 % 52.1 % 53.7 % 54.3 % 58.8 % 55.7 %
Connectivity -81.4 % 20.5 % 32.7 % 42.8 % 24.2 % 58.0 % 60.7 % 56.8
% 58.3 % Total operating segment gross margin 38.3 % 40.8 %
41.6 % 42.1 % 40.8 % 43.1 % 43.5 % 45.2 % 44.0 % Income from
continuing operations: Marketing services 20,828 20,576
21,859 17,984 81,247 16,853 17,908 20,309 55,070 -7.1 % (1,550 )
Audience Solutions 24,190 31,375 28,919 30,594 115,078 24,087
25,190 30,723 80,000 6.2 % 1,804 Connectivity (14,089 )
(12,152 ) (7,802 ) (6,026 ) (40,069 ) (791 )
(1,068 ) (1,015 ) (2,874 ) 87.0 % 6,787
Total operating segment income from operations 30,929
39,799 42,976 42,552
156,256 40,149 42,030 50,017
132,196 16.4 % 7,041 Margin:
Marketing services 19.1 % 18.2 % 19.1 % 16.4 % 18.2 % 15.6 % 15.9 %
17.5 % 16.4 % Audience Solutions 33.1 % 40.2 % 38.1 % 39.8 % 37.9 %
35.1 % 34.9 % 39.9 % 36.7 % Connectivity -325.1 % -90.2 % -43.6 %
-31.3 % -72.9 % -3.8 % -4.8 % -3.6 % -4.0 % Total operating
segment operating margin 16.6 % 19.5 % 20.6 % 20.7 % 19.4 % 20.4 %
20.3 % 22.6 % 21.1 %
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version on businesswire.com: http://www.businesswire.com/news/home/20160204006464/en/
Acxiom Investor RelationsLauren Dillard,
650-372-2242investor.relations@acxiom.comEACXM
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