First Quarter Revenue Increases 7%
LiveRamp Top-Line Grows 34% – Segment Margin
Reaches a Record 15%
IPG AMS Deal on Track to Close in Third
Fiscal Quarter
Repurchases 1.9 Million Shares in the
Quarter
Acxiom® (Nasdaq: ACXM), the data foundation for the world's
best marketers, today announced financial results for its first
quarter ended June 30, 2018.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20180809005756/en/
First Quarter Financial Highlights
- Revenue: Total revenue was $227
million, up 7% compared to the first quarter of last year.
- Operating Income (Loss): GAAP
operating loss was $6 million compared to an operating loss of $6
million in the prior year. Non-GAAP operating income improved 29%
to $29 million.
- Earnings (Loss) per Share: GAAP
loss per share was $0.04 compared to a loss per share of $0.02 in
the prior year. Non-GAAP diluted earnings per share were $0.24
compared to $0.14 a year ago. Current period results include a
$0.02 GAAP and non-GAAP benefit associated with the adoption of ASC
606.
- Operating Cash Flow: Operating
cash flow was $17 million, up from $5 million in the prior
year.
- Free Cash Flow to Equity: Free
cash flow to equity was $8 million, up from negative $6 million in
the prior year.
Segment Results
$M
LiveRamp™
Q119
Q118
Y/Y Δ
Revenue
$62 $47 34%
Gross Profit
$44 $28 57% Gross Margin 71% 60% 1,040 bps
Segment Operating Income (Loss)
$9 ($0) NM Segment Margin 15% (0%) 1,490 bps
Acxiom Marketing Solutions
Q119 Q118 Y/Y Δ
Revenue
$165 $166 (1%)
Gross Profit
$73 $78 (6%) Gross Margin 44% 47% (250 bps)
Segment Operating Income
$47 $48 (2%) Segment Margin 29% 29% (40 bps)
A detailed discussion of our non-GAAP financial measures and a
reconciliation between GAAP and non-GAAP results is provided in the
schedules attached to this press release.
“This is an inflection point for our Company. The first quarter
was another strong performance for both AMS and LiveRamp,” said
Acxiom CEO Scott Howe. “We look forward to finalizing the IPG
transaction and to the emergence of LiveRamp as a pure-play public
SaaS platform.”
Recent Business Highlights
- On July 2nd, Acxiom
entered into a definitive agreement to sell Acxiom Marketing
Solutions to Interpublic Group for $2.3 billion.
- The combination of IPG and AMS creates
an industry powerhouse for data-driven marketing.
- The Company expects to realize
approximately $1.7 billion in net cash proceeds, after taxes and
fees, and intends to return up to $1 billion to shareholders.
- The transaction is expected to close in
the third fiscal quarter, subject to Acxiom shareholder approval
and other customary closing conditions.
- Following the transaction close, the
Company will be renamed LiveRamp and, shortly thereafter, begin
trading its common stock under the new ticker symbol “RAMP.”
- LiveRamp added approximately 30 new
direct clients during the quarter and added several new partner
integrations. On a direct basis, LiveRamp now works with more
than 600 clients worldwide and serves hundreds of additional brands
through its expansive ecosystem of partners and resellers.
- LiveRamp and Adobe are partnering to
integrate LiveRamp’s IdentityLink™ for TV solution across Adobe
Advertising Cloud and Adobe Audience Manager. The partnership
enables advertisers to engage in addressable TV advertising using
the same first- or third-party audiences they already deploy
through Adobe, while unlocking household level insight.
- Acxiom Marketing Solutions posted
another strong bookings quarter, driven by six new logo wins
and two key renewals.
- Acxiom repurchased 1.9 million
shares for approximately $46 million during the first quarter.
Since the inception of its share repurchase program in August 2011,
Acxiom has repurchased a total of 22 million shares for $420
million.
Financial Outlook
Non-GAAP guidance excludes the impact of non-cash stock
compensation, purchased intangible asset amortization,
restructuring charges and business separation costs.
The Company does not intend to update its existing guidance
until the pending IPG AMS transaction is complete.
Therefore, for fiscal 2019, the Company reaffirms its previously
issued guidance and continues to expect:
- Total revenue of between $935 million
and $955 million.
- GAAP loss per share of between $0.23
and $0.18.
- Non-GAAP diluted earnings per share of
between $0.90 and $0.95.
Conference Call
Acxiom will hold a conference call at 3:30 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 and can
be found on our investor site. A slide presentation will be
referenced during the call and can be accessed here.
About Acxiom
Acxiom provides the data foundation for the world’s best
marketers. We enable people-based marketing everywhere through a
simple, open approach to connecting systems and data that drives
seamless customer experiences and higher ROI. A leader in identity
and ethical data use for nearly 50 years, Acxiom helps thousands of
clients and partners around the globe work together to create a
world where all marketing is relevant. Acxiom is a registered
trademark of Acxiom Corporation. For more information, visit
Acxiom.com.
Forward-Looking Statements
This release and today’s conference call 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 proposed sale of Acxiom Marketing
Solutions to Interpublic Group is not completed; the possibility of
business disruption associated with the proposed sale; the
possibility that the expected revenue from the divisions may not be
realized within the expected timeframe; the possibility that the
integration of acquired businesses may not be successful as
planned; 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 purchasers
will reduce their reliance on us by developing and using their own,
or alternative, sources of data generally or with respect to
certain data elements or categories; 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 the
European General Data Protection Regulation, which became effective
May 25, 2018, will make it more difficult and/or costly for us to
do business in the EU; 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 the possibility that other risks
and uncertainties may emerge, 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, 2018, which was filed with the Securities and Exchange
Commission on May 25, 2018 and the discussion under the caption
“Item 1A. RISK FACTORS” in our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2018, which was filed with the
Securities and Exchange Commission today.
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.
To automatically receive Acxiom Corporation financial news by
email, please visit www.acxiom.com and subscribe to email
alerts.
Acxiom, LiveRamp, IdentityLink, InfoBase and all other Acxiom
marks contained herein are trademarks or service marks of Acxiom
Corporation. All other marks are the property of their respective
owners.
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (Dollars in thousands, except per share
amounts) For the Three Months Ended June 30,
$ % 2018 2017 Variance Variance
Revenues 226,960 212,514 14,446 6.8 % Cost of revenue
117,271 113,960 3,311 2.9 % Gross profit 109,689
98,554 11,135 11.3 %
% Gross margin 48.3 %
46.4 % Operating expenses: Research and
development 24,536 23,563 973 4.1 % Sales and marketing 54,850
48,440 6,410 13.2 % General and administrative 34,718 32,356 2,362
7.3 % Gains, losses and other items, net 1,286 (98 ) 1,384
1412.2 % Total operating expenses 115,390 104,261
11,129 10.7 % Loss from operations (5,701 ) (5,707 ) 6 0.1 %
%
Margin -2.5 % -2.7 % Other
income (expense): Interest expense (2,838 ) (2,342 ) (496 ) (21.2
%) Other, net 524 (672 ) 1,196 178.0 % Total other expense
(2,314 ) (3,014 ) 700 23.2 % Loss before income taxes (8,015
) (8,721 ) 706 8.1 % Income taxes (5,000 ) (7,421 ) 2,421
32.6 % Net loss (3,015 ) (1,300 ) (1,715 ) (131.9 %)
Basic loss per share (0.04 ) (0.02 ) (0.02 ) (100.0 %)
Diluted loss per share (0.04 ) (0.02 ) (0.02 ) (100.0 %)
Basic weighted average shares 76,935 78,672 Diluted weighted
average shares 76,935 78,672 ACXIOM CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP EPS (1)
(Unaudited) (Dollars in thousands, except per share amounts)
For the Three Months Ended June 30, 2018 2017
Loss before income taxes (8,015 ) (8,721 )
Income taxes (5,000 ) (7,421 ) Net loss (3,015 ) (1,300 )
Loss per share: Basic (0.04 ) (0.02 ) Diluted
(0.04 ) (0.02 ) Excluded items: Purchased intangible asset
amortization (cost of revenue) 6,054 5,966 Non-cash stock
compensation (cost of revenue and operating expenses) 20,360 15,031
Restructuring and merger charges (gains, losses, and other) 1,286
(98 ) Separation and transformation costs (general and
administrative) 6,822 7,119 Total excluded
items 34,522 28,018
Income before income taxes and excluding
items
26,507 19,297 Income taxes (2) 7,467 7,720
Non-GAAP earnings from continuing operations 19,040 11,577
Earnings from discontinued operations, net of tax - -
Non-GAAP net earnings 19,040 11,577
Non-GAAP earnings per share: Basic 0.25 0.15
Diluted 0.24 0.14 Basic weighted
average shares 76,935 78,672 Diluted weighted
average shares 79,311 81,440 (1) This
presentation includes non-GAAP measures. Our non-GAAP measures are
not meant to be considered in isolation or as a substitute for
comparable GAAP measures, and should be read only in conjunction
with our condensed consolidated financial statements prepared in
accordance with GAAP. For a detailed explanation of the adjustments
made to comparable GAAP measures, the reasons why management uses
these measures and the material limitations on the usefulness of
these measures, please see Appendix A. (2) Income taxes were
calculated using an effective non-GAAP tax rate of 28.2% and 40.0%
in the first quarter of fiscal 2019 and 2018, respectively. The
difference between our GAAP and non-GAAP tax rates were primarily
due to the net tax effects of the excluded items. The rates in the
first quarter of fiscal 2019 reflect the impact of the Tax Acts and
Jobs Act. ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
(Unaudited) (Dollars in thousands) For the
Three Months Ended June 30, 2018 2017 Loss
from operations (5,701 ) (5,707 ) Excluded items: Purchased
intangible asset amortization (cost of revenue) 6,054 5,966
Non-cash stock compensation (cost of revenue and operating
expenses) 20,360 15,031 Restructuring and merger charges (gains,
losses, and other) 1,286 (98 ) Separation and transformation costs
(general and administrative) 6,822 7,119 Total
excluded items 34,522 28,018 Income from
operations before excluded items 28,821 22,311
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures, and should be read only in
conjunction with our condensed consolidated financial statements
prepared in accordance with GAAP. For a detailed explanation of the
adjustments made to comparable GAAP measures, the reasons why
management uses these measures and the material limitations on the
usefulness of these measures, please see Appendix A. ACXIOM
CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited)
(Dollars in thousands) For the Three Months
Ended June 30, $ % 2018 2017 Variance
Variance Revenues LiveRamp 62,458 46,757 15,701 33.6
% Acxiom Marketing Solutions 164,502 165,757 (1,255 )
(0.8 %) Total operating segment revenues 226,960 212,514 14,446 6.8
% Gross profit LiveRamp 44,200 28,229 15,971 56.6 % Acxiom
Marketing Solutions 73,174 77,864 (4,690 ) (6.0 %)
Total operating segment gross profit 117,374 106,093 11,281 10.6 %
Gross margin % LiveRamp 70.8 % 60.4 % Acxiom Marketing
Solutions 44.5 % 47.0 % Total operating segment gross margin 51.7 %
49.9 % Income (loss) from operations LiveRamp 9,203 (97 )
9,300 9587.6 % Acxiom Marketing Solutions 47,458 48,374
(916 ) (1.9 %) Total operating segment income from
operations 56,661 48,277 8,384 17.4 % Operating income
(loss) margin % LiveRamp 14.7 % (0.2 %) Acxiom Marketing Solutions
28.8 % 29.2 % Total operating segment operating margin 25.0 % 22.7
% Some totals may not add due to rounding.
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF SEGMENT
RESULTS (Unaudited) (Dollars in thousands) For
the Three Months Ended June 30, 2018 2017 Total
operating segment gross profit 117,374 106,093 Less:
Purchased intangible asset amortization 6,054 5,966 Non-cash stock
compensation 1,631 1,573 Gross profit 109,689
98,554 Total operating segment income
from operations 56,661 48,277 Less: Corporate expenses
27,840 25,966 Purchased intangible asset amortization 6,054 5,966
Non-cash stock compensation 20,360 15,031 Restructuring charges
1,286 (98 ) Separation and transformation costs 6,822 7,119
Loss from operations (5,701 ) (5,707 )
Some totals may not add due to rounding. ACXIOM CORPORATION
AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited)
(Dollars in thousands) For the Three Months
Ended June 30, 2018 2017 Net loss (3,015 )
(1,300 ) Income taxes (5,000 ) (7,421 ) Other expense
(2,314 ) (3,014 ) Loss from operations (5,701 ) (5,707 )
Depreciation and amortization 21,529 21,110
EBITDA 15,828 15,403 Other
adjustments: Non-cash stock compensation (cost of revenue and
operating expenses) 20,360 15,031 Restructuring and merger charges
(gains, losses, and other) 1,286 (98 ) Separation and
transformation costs (general and administrative) 6,822
7,119 Other adjustments 28,468 22,052
Adjusted EBITDA 44,296 37,455 (1) This
presentation includes non-GAAP measures. Our non-GAAP measures are
not meant to be considered in isolation or as a substitute for
comparable GAAP measures, and should be read only in conjunction
with our condensed consolidated financial statements prepared in
accordance with GAAP. For a detailed explanation of the adjustments
made to comparable GAAP measures, the reasons why management uses
these measures, the usefulness of these measures and the material
limitations on the usefulness of these measures, please see
Appendix A. ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollars in thousands) June 30,
March 31, $ % 2018 2018 Variance
Variance
Assets
Current assets: Cash and cash equivalents 95,099 142,279 (47,180 )
(33.2 %) Trade accounts receivable, net 163,767 167,188 (3,421 )
(2.0 %) Refundable income taxes 11,761 9,733 2,028 20.8 % Other
current assets 40,167 41,145 (978 ) (2.4 %)
Total current assets 310,794 360,345 (49,551 ) (13.8
%) Property and equipment 492,602 491,266 1,336 0.3 % Less -
accumulated depreciation and amortization 341,195 334,733
6,462 1.9 % Property and equipment, net 151,407
156,533 (5,126 ) (3.3 %) Software, net of
accumulated amortization 31,719 34,984 (3,265 ) (9.3 %) Goodwill
595,795 595,995 (200 ) (0.0 %) Purchased software licenses, net of
accumulated amortization 6,670 7,703 (1,033 ) (13.4 %) Deferred
income taxes 11,488 12,225 (737 ) (6.0 %) Deferred commissions, net
18,137 - 18,137 - Other assets, net 40,958 41,468
(510 ) (1.2 %) 1,166,968 1,209,253 (42,285 )
(3.5 %)
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 1,327
1,583 (256 ) (16.2 %) Trade accounts payable 47,668 46,688 980 2.1
% Accrued payroll and related expenses 21,939 42,499 (20,560 )
(48.4 %) Other accrued expenses 58,938 55,865 3,073 5.5 % Deferred
revenue 31,621 31,720 (99 ) (0.3 %) Total
current liabilities 161,493 178,355 (16,862 ) (9.5 %)
Long-term debt 227,435 227,837 (402 ) (0.2 %)
Deferred income taxes 42,258 40,243 2,015 5.0 % Other
liabilities 13,726 13,723 3 0.0 % Stockholders' equity:
Common stock 13,773 13,609 164 1.2 % Additional paid-in capital
1,256,442 1,235,679 20,763 1.7 % Retained earnings 638,043 628,331
9,712 1.5 % 8,899 10,767 (1,868 ) (17.3 %) Treasury stock, at cost
(1,195,101 ) (1,139,291 ) (55,810 ) (4.9 %) Total stockholders'
equity 722,056 749,095 (27,039 ) (3.6 %)
1,166,968 1,209,253 (42,285 ) (3.5 %) ACXIOM
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Dollars in thousands) For the
Three Months Ended June 30, 2018 2017 Cash flows from
operating activities: Net loss (3,015 ) (1,300 ) Non-cash operating
activities: Depreciation and amortization 21,529 21,110 Loss on
disposal or impairment of assets 48 163 Accelerated deferred debt
costs - 720 Deferred income taxes (1,335 ) 2,497 Non-cash stock
compensation expense 20,360 15,038 Changes in operating assets and
liabilities: Accounts receivable 4,329 11,960 Deferred commissions
(2,939 ) - Other assets (56 ) (3,377 ) Accounts payable and other
liabilities (21,704 ) (37,073 ) Deferred revenue (33 ) (4,787 ) Net
cash provided by operating activities 17,184 4,951
Cash flows from investing activities: Capitalized software (3,606 )
(3,388 ) Capital expenditures (4,399 ) (6,888 ) Data acquisition
costs (179 ) (190 ) Equity investments (2,500 ) - Net cash
used in investing activities (10,684 ) (10,466 ) Cash flows from
financing activities: Proceeds from debt - 230,000 Payments of debt
(592 ) (225,572 ) Fees from debt refinancing (300 ) (4,001 ) Sale
of common stock, net of stock acquired for withholding taxes (5,928
) (2,539 ) Acquisition of treasury stock (45,766 ) - Net
cash used in financing activities (52,586 ) (2,112 ) Effect of
exchange rate changes on cash (1,094 ) 430 Net change
in cash and cash equivalents (47,180 ) (7,197 ) Cash and cash
equivalents at beginning of period 142,279 170,343
Cash and cash equivalents at end of period 95,099 163,146
Supplemental cash flow information: Cash paid
during the period for: Interest 2,607 2,375 Income taxes 1,100 354
ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH
FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands)
06/30/17 09/30/17 12/31/17
03/31/18 FY2018 06/30/18
Net Cash Provided by Operating Activities 4,951 27,810 43,630
35,762 112,153 17,184 Less (plus): Capitalized software
(3,388 ) (3,756 ) (3,188 ) (3,407 ) (13,739 ) (3,606 ) Capital
expenditures (6,888 ) (7,630 ) (12,432 ) (17,247 ) (44,197 ) (4,399
) Data acquisition costs (190 ) (233 ) (198 ) (286 ) (907 ) (179 )
Required debt payments (572 ) (578 ) (582 ) (588 ) (2,320 ) (592 )
Net cash received in disposition - 4,000
- - 4,000 -
Free Cash Flow to Equity (6,087 ) 19,613
27,230 14,234 54,990 8,408
(1) This presentation includes non-GAAP measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for comparable GAAP measures, and should be read only
in conjunction with our condensed consolidated financial statements
prepared in accordance with GAAP. For a detailed explanation of the
adjustments made to comparable GAAP measures, the reasons why
management uses these measures, the usefulness of these measures
and the material limitations on the usefulness of these measures,
please see Appendix A. ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except per share amounts)
Q1 FY19 to Q1 FY18 06/30/17 09/30/17
12/31/17 03/31/18 FY2018 06/30/18 % $
Revenues 212,514 225,240 234,871 244,781
917,406 226,960 6.8 % 14,446 Cost of revenue
113,960 115,072 115,920
121,484 466,436 117,271 2.9 % 3,311
Gross profit 98,554 110,168 118,951 123,297 450,970 109,689 11.3 %
11,135
% Gross margin 46.4 % 48.9
% 50.6 % 50.4 % 49.2
% 48.3 % Operating expenses Research
and development 23,563 24,013 23,318 23,979 94,873 24,536 4.1 % 973
Sales and marketing 48,440 50,118 53,730 63,311 215,599 54,850 13.2
% 6,410 General and administrative 32,356 31,924 30,886 28,360
123,526 34,718 7.3 % 2,362 Gains, losses and other items, net (98 )
3,660 (41 ) 2,852 6,373
1,286 1412.2 % 1,384 Total operating expenses 104,261
109,715 107,893 118,502 440,371 115,390 10.7 % 11,129 Income
(loss) from operations (5,707 ) 453 11,058 4,795 10,599 (5,701 )
0.1 % 6
% Margin -2.7 % 0.2 %
4.7 % 2.0 % 1.2 %
-2.5 % Other income (expense) Interest expense (2,342
) (2,524 ) (2,566 ) (2,699 ) (10,131 ) (2,838 ) -21.2 % (496 )
Other, net (672 ) 192 419 302
241 524 178.0 % 1,196 Total other
expense (3,014 ) (2,332 ) (2,147 ) (2,397 ) (9,890 ) (2,314 ) 23.2
% 700 Income (loss) before income taxes (8,721 ) (1,879 )
8,911 2,398 709 (8,015 ) 8.1 % 706 Income taxes (7,421 )
1,457 (14,030 ) (2,777 ) (22,771 )
(5,000 ) 32.6 % 2,421 Net earnings (loss) (1,300 ) (3,336 )
22,941 5,175 23,480 (3,015 ) -131.9 % (1,715 ) Diluted
earnings (loss) per share (0.02 ) (0.04 ) 0.28
0.06 0.29 (0.04 ) -137.2 % (0.02 )
Some earnings (loss) per share amounts may not add due to
rounding. ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY
SEGMENT (Unaudited) (Dollars in thousands)
Q1 FY19 to Q1 FY18 06/30/17
09/30/17 12/31/17 03/31/18 FY2018 06/30/18 %
$ Revenues:
LiveRamp 46,757 54,043 59,095 60,231 220,125 62,458 33.6 % 15,701
Acxiom Marketing Solutions 165,757 171,198
175,776 184,550 697,281
164,502 (0.8 %) (1,255 ) Total operating segment revenues
212,514 225,240 234,871
244,781 917,406 226,960 6.8 % 14,446
Gross profit: LiveRamp 28,229 36,105 40,553 42,679
147,566 44,200 56.6 % 15,971 Acxiom Marketing Solutions 77,864
81,828 85,981 89,067
334,739 73,174 (6.0 %) (4,690 ) Total
operating segment gross profit 106,093 117,932
126,533 131,746 482,305
117,374 10.6 % 11,281 Gross margin %: LiveRamp
60.4 % 66.8 % 68.6 % 70.9 % 67.0 % 70.8 % Acxiom Marketing
Solutions 47.0 % 47.8 % 48.9 % 48.3 % 48.0 % 44.5 % Total operating
segment gross margin 49.9 % 52.4 % 53.9 % 53.8 % 52.6 % 51.7 %
Income (loss) from operations: LiveRamp (97 ) 5,883
9,022 8,128 22,936 9,203 9587.6 % 9,300 Acxiom Marketing Solutions
48,374 51,203 52,962
50,421 202,959 47,458 (1.9 %) (916 )
Total operating segment income from operations 48,277
57,086 61,983 58,548
225,895 56,661 17.4 % 8,384 Operating income
(loss) margin %: LiveRamp (0.2 %) 10.9 % 15.3 % 13.5 % 10.4
% 14.7 % Acxiom Marketing Solutions 29.2 % 29.9 % 30.1 % 27.3 %
29.1 % 28.8 % Total operating segment operating margin 22.7 % 25.3
% 26.4 % 23.9 % 24.6 % 25.0 % Some totals may not add due to
rounding. ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION
OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands,
except per share amounts)
06/30/17
09/30/17 12/31/17 03/31/18 FY2018
06/30/18 Earnings (loss) before
income taxes (8,721 ) (1,879 ) 8,911 2,398 709 (8,015 )
Income taxes (7,421 ) 1,457 (14,030 )
(2,777 ) (22,771 ) (5,000 ) Net earnings (loss)
(1,300 ) (3,336 ) 22,941 5,175
23,480 (3,015 ) Earnings (loss) per share:
Basic (0.02 ) (0.04 ) 0.29 0.07
0.30 (0.04 ) Diluted (0.02 )
(0.04 ) 0.28 0.06 0.29
(0.04 ) Excluded items: Purchased intangible asset
amortization (cost of revenue) 5,966 6,021 5,971 5,963 23,920 6,054
Non-cash stock compensation (cost of revenue and operating
expenses) 15,031 15,757 15,919 16,527 63,234 20,360 Restructuring
and merger charges (gains, losses, and other) (98 ) 3,660 (41 )
2,852 6,373 1,286 Separation and transformation costs (general and
administrative) 7,119 5,442 5,214 3,070 20,846 6,822 Accelerated
amortization (cost of revenue) - - -
999 999 - Total
excluded items 28,018 30,880 27,063
29,411 115,372 34,522
Income before income taxes and excluding
items
19,297 29,001 35,974 31,809 116,081 26,507 Income taxes
7,720 11,289 10,704
10,045 39,758 7,467 Non-GAAP net
earnings 11,577 17,712 25,270
21,764 76,323 19,040
Non-GAAP earnings per share: Basic 0.15 0.22
0.32 0.28 0.97
0.25 Diluted 0.14 0.22
0.31 0.27 0.94 0.24
Basic weighted average shares 78,672 79,235
79,043 78,614 78,891
76,935 Diluted weighted average shares 81,440
81,472 81,869 81,282
81,516 79,311 Some totals may
not add due to rounding (1) This presentation includes
non-GAAP measures. Our non-GAAP measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
measures, and should be read only in conjunction with our condensed
consolidated financial statements prepared in accordance with GAAP.
For a detailed explanation of the adjustments made to comparable
GAAP measures, the reasons why management uses these measures and
the material limitations on the usefulness of these measures,
please see Appendix A. ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP EPS GUIDANCE (1)
(Unaudited) (Dollars in thousands, except per share amounts)
For the year ending March 31, 2019 Low Range
High Range Loss before income taxes (15,500 ) (10,000 )
Income taxes 3,000 4,500 Net loss
(18,500 ) (14,500 ) Diluted loss per share $ (0.23 ) $ (0.18
) Excluded items: Purchased intangible asset amortization
16,000 16,000 Non-cash stock compensation 84,000 84,000 Gains,
losses and other items, net 3,000 3,000 Separation and related
costs 16,000 16,000 Total excluded items
119,000 119,000 Income before income taxes and
excluding items 103,500 109,000 Income taxes (2) 29,000
30,500 Non-GAAP net earnings 74,500
78,500 Non-GAAP diluted earnings per share $ 0.90
$ 0.95 Basic weighted average shares 81,000
81,000 Diluted weighted average shares 83,000 83,000
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures, and should be read only in
conjunction with our condensed consolidated financial statements
prepared in accordance with GAAP. For a detailed explanation of the
adjustments made to comparable GAAP measures, the reasons why
management uses these measures, the usefulness of these measures
and the material limitations on the usefulness of these measures,
please see Appendix A. (2) Income taxes were calculated
using an effective non-GAAP tax rate of approximately 28.0%. The
difference between our GAAP and Non-GAAP tax rates was due to the
effect of excluded items.
APPENDIX A
ACXIOM CORPORATIONQ1 FISCAL 2019 FINANCIAL
RESULTSEXPLANATION OF NON-GAAP MEASURES
To supplement our financial results, we use non-GAAP measures
which exclude certain acquisition related expenses, non-cash stock
compensation and restructuring charges. We believe these measures
are helpful in understanding our past performance and our future
results. Our non-GAAP financial measures and schedules are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with our consolidated GAAP financial statements. Our management
regularly uses these non-GAAP financial measures internally to
understand, manage and evaluate our business and to make operating
decisions. These measures are among the primary factors management
uses in planning for and forecasting future periods. Compensation
of our executives is also based in part on the performance of our
business based on these non-GAAP measures.
Our non-GAAP financial measures, including non-GAAP earnings per
share, income from operations and adjusted EBITDA reflect
adjustments based on the following items, as well as the related
income tax effects when applicable:
Purchased intangible asset
amortization: We incur amortization of purchased intangibles
in connection with our acquisitions. Purchased intangibles include
(i) developed technology, (ii) customer and publisher
relationships, and (iii) trade names. We expect to amortize for
accounting purposes the fair value of the purchased intangibles
based on the pattern in which the economic benefits of the
intangible assets will be consumed as revenue is generated.
Although the intangible assets generate revenue for us, we exclude
this item because this expense is non-cash in nature and because we
believe the non-GAAP financial measures excluding this item provide
meaningful supplemental information regarding our operational
performance.
Non-cash stock compensation:
Non-cash stock compensation consists of charges for associate
restricted stock units, performance shares and stock options in
accordance with current GAAP related to stock-based compensation
including expense associated with stock-based compensation related
to unvested options assumed in connection with our acquisitions. As
we apply stock-based compensation standards, we believe that it is
useful to investors to understand the impact of the application of
these standards to our operational performance. Although
stock-based compensation expense is calculated in accordance with
current GAAP and constitutes an ongoing and recurring expense, such
expense is excluded from non-GAAP results because it is not an
expense that typically requires or will require cash settlement by
us and because such expense is not used by us to assess the core
profitability of our business operations.
Restructuring charges: During the
past several years, we have initiated certain restructuring
activities in order to align our costs in connection with both our
operating plans and our business strategies based on then-current
economic conditions. As a result, we recognized costs related to
termination benefits for associates whose positions were
eliminated, lease termination charges, and leasehold improvement
write offs. These items, reported as gains, losses, and other
items, net, are excluded from non-GAAP results because such amounts
are not used by us to assess the core profitability of our business
operations.
Separation and transformation
costs: In previous years, we incurred significant expenses
in connection with the separation of our IT Infrastructure
Management ("ITO") and the subsequent transformation of our
remaining operating segments. This work enabled us to transform our
external reporting and provide investors with enhanced transparency
and more granular segment-level disclosures in addition to
facilitating the ITO disposition. In the prior year, we also
incurred expenses to further separate the financial statements of
our three operating segments, with particular focus on
segment-level balance sheets, and to evaluate portfolio priorities.
Our criteria for excluding separation and transformation expenses
from our non-GAAP measures is as follows: 1) projects are discrete
in nature; 2) excluded expenses consist only of third-party
consulting fees that we would not incur otherwise; and 3) we do not
exclude employee related expenses or other costs associated with
the ongoing operations of our business. We substantially completed
those projects during the third quarter of fiscal year 2018.
Beginning in the fourth quarter of fiscal 2018, we incurred
transaction analysis and support expenses related to the Company's
announced evaluation of strategic options for its Marketing
Solutions business. Our criteria for excluding these transaction
related costs are the same. We believe excluding these items from
our non-GAAP financial measures is useful for investors and
provides meaningful supplemental information.
Our non-GAAP financial schedules are:
Non-GAAP EPS and Non-GAAP Income from
Operations: Our non-GAAP earnings per share and Non-GAAP
income from operations reflect adjustments as described above, as
well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is
defined as net income from continuing operations before income
taxes, other expenses, depreciation and amortization, and including
adjustments as described above. We use Adjusted EBITDA to measure
our performance from period to period both at the consolidated
level as well as within our operating segments and to compare our
results to those of our competitors. We believe that the inclusion
of Adjusted EBITDA provides useful supplementary information to and
facilitates analysis by investors in evaluating the Company's
performance and trends. The presentation of Adjusted EBITDA is not
meant to be considered in isolation or as an alternative to net
earnings as an indicator of our performance.
Free Cash Flow to Equity: To
supplement our statement of cash flows, we use a non-GAAP measure
of cash flow to analyze cash flows generated from operations. Free
cash flow to equity is defined as operating cash flow less cash
used by investing activities (excluding the impact of cash paid in
acquisitions), less required payments of debt, and excluding the
impact of discontinued operations. Management believes that this
measure of cash flow is meaningful since it represents the amount
of money available from continuing operations for the Company's
discretionary spending after funding all required obligations
including scheduled debt payments. The presentation of non-GAAP
free cash flow to equity is not meant to be considered in isolation
or as an alternative to cash flows from operating activities as a
measure of liquidity.
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version on businesswire.com: https://www.businesswire.com/news/home/20180809005756/en/
Acxiom Investor RelationsLauren Dillard,
650-372-2242investor.relations@acxiom.comEACXM
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