UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
  
     
 
FORM 8-K
  
     
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
  
     
 
Date of report (Date of earliest event reported):  August 5, 2015
  
     
 
ACXIOM CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
  
     
 
DELAWARE
(State or Other Jurisdiction of Incorporation)
 
  
0-13163
71-0581897
(Commission File Number)
(IRS Employer Identification No.)
   
P.O. Box 8190, 601 E. Third Street,
Little Rock, Arkansas
 
72203-8190
(Address of Principal Executive Offices)
(Zip Code)
 
501-342-1000
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
 
 

 
Item 2.02                      Results of Operations and Financial Condition.

On August 5, 2015, Acxiom Corporation (the “Company”) issued a press release announcing the results of its financial performance for the first quarter of fiscal year 2016. The Company will hold a conference call at 4:00 p.m. CT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.

The Company’s press release and other communications from time to time include certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

The attached press release includes non-GAAP measures of (i) income from operations, earnings per share attributable to Acxiom shareholders, and segment income from operations, all excluding unusual items and (ii) free cash flow available to equity. Operating income excluding unusual items and earnings per share attributable to Acxiom shareholders excluding unusual items  represent income from the Company’s operations less expenses related to discontinued operations, gains, losses and other items, the impact of business separation and transformation expenses recorded in selling, general and administrative expense, the impact of purchased intangible asset amortization recorded in cost of revenue and the impact of non-cash stock compensation recorded in both cost of revenue and selling, general and administrative expense.  Segment income from operations excluding unusual items represents segment income from operations excluding purchased intangible asset amortization and non-cash stock compensation that was charged to the segment for GAAP purposes.  The Company’s management believes that these non-GAAP measures are meaningful since they represent the recurring income from the Company’s continuing operations before one-time items, which are not a recurring part of the Company’s ordinary course operations, and before purchased intangible asset amortization and non-cash stock compensation, which are recurring non-cash expenses.  Management also believes these measures are useful in comparison to other companies who report similar measures.  The non-GAAP measures are reconciled to the corresponding GAAP measures of income from operations, earnings per share attributable to Acxiom shareholders, and segment income from operations in schedules to the press release.

Free cash flow available 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, excluding the impact of discontinued operations. The Company’s management believes that this measure of free cash flow available to equity 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, and it therefore provides a useful measure of liquidity for assessing the amount of cash available for general corporate and strategic purposes. Free cash flow available to equity is reconciled to operating cash flow, the nearest comparable GAAP measure, in a schedule to the press release.

The non-GAAP financial measures used by the Company may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as substitutes for measures of financial performance or liquidity prepared in accordance with GAAP.


 
 
 

Item 9.01                      Financial Statements and Exhibits
 
(d)           Exhibits

The following exhibits are furnished herewith:
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated August 5, 2015

 
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:   August 5, 2015


ACXIOM CORPORATION


By: /s/ Jerry C. Jones                                                                
Name:     Jerry C. Jones
 
Title:
Chief Ethics and Legal Officer & Executive Vice President
 
 

 

 
 
 

EXHIBIT INDEX
 
Exhibit
Number
  
Description
 
99.1
  
 
Press Release of the Company dated August 5, 2015


 
 
 
 




 
 
 
 

ACXIOM LOGO

For more information, contact:
Lauren Dillard
Acxiom Investor Relations
(650) 372-2242
investor.relations@acxiom.com
EACXM
 
 
ACXIOM ANNOUNCES FIRST QUARTER RESULTS
 
Connectivity Nears Breakeven
 
Sale of IT Infrastructure Management Business Completed
 
 
LITTLE ROCK, Ark. – August 5, 2015 Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its first quarter ended June 30, 2015.
 
Financial Highlights
 
· 
Revenue: Total revenue was $197 million, up approximately 5% compared to the first quarter of last year.
· 
Operating Income (Loss): GAAP operating loss from continuing operations was $3 million compared to a loss of $13 million in the prior year. Non-GAAP operating income from continuing operations improved 71% to approximately $15 million compared to $9 million a year ago.
· 
Earnings (Loss) per Share: GAAP loss per share from continuing operations was $0.07 compared to a net loss of $0.14 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.09, up 80% from $0.05 a year ago.
· 
Operating Cash Flow: Operating cash flow from continuing operations improved to $12 million compared to negative $15 million a year ago.
· 
Free Cash Flow to Equity: Free cash flow to equity was negative $12 million compared to negative $43 million in the prior year.
 
Segment Results
 
During the first quarter of fiscal 2016, Acxiom realigned its organizational structure to better reflect its business strategy. The Company will report its financial performance based on the following segments: Marketing Services and Audience Solutions and Connectivity. Prior period amounts have been adjusted to conform to the way the Company internally managed and monitored segment performance during the first quarter of fiscal year 2016.
 
Marketing Services and Audience Solutions
 
·  
Revenue was $176 million, down 3% compared to the first quarter of last year primarily due to declines in International. US revenue of $159 million was roughly flat year-over-year.
·  
Non-GAAP gross margin decreased from 43% to 41%.
·  
Non-GAAP operating income was $40 million compared to $47 million in the prior year. The decline was primarily driven by lower revenue.
 
 
1
 
Connectivity
 
·  
Revenue was $21 million, up approximately 376% compared to the first quarter of last year, driven by the addition of LiveRamp™ and continued onboarding momentum.
·  
Non-GAAP gross margin improved from negative 83% to positive 60%.
·  
Non-GAAP operating loss improved by approximately $14 million to roughly breakeven driven by growth in subscriptions and royalties.
 
Non-GAAP results exclude items including non-cash compensation, purchased intangible asset amortization, and separation and transformation costs. A reconciliation between GAAP and non-GAAP results is attached to this release.
 
“The first quarter was a solid start to fiscal 2016,” said Acxiom CEO Scott Howe. “Our results this quarter demonstrate the continued strength of Connectivity. A growing list of customers and synergies from our combination with LiveRamp contributed to dramatically expanding revenue, gross margin and bottom-line performance.”
 
“We are also pleased to announce that the sale of our IT Infrastructure Management business was completed on July 31, 2015, leaving Acxiom with a portfolio of businesses that share a single vision and mission,” continued Howe.
 
Business Highlights
 
·  
LiveRamp added 30 new customers during the quarter and added 10 new partner integrations. Marketers can now onboard and distribute their data to a growing network of over 200 marketing platforms and data providers.
 
·  
Acxiom relaunched its email and cross-channel marketing business, Acxiom Impact™, an advanced marketing offering specifically designed to meet the unique needs of sophisticated enterprise marketers.
 
·  
The Company appointed Jeremy Allen as President of Marketing Services. Allen’s appointment completes Acxiom's new divisional structure, which includes Travis May as President of Connectivity and Rick Erwin as President of Audience Solutions. Acxiom's CFO, Warren Jenson, is heading the Company's international operations.
 
· 
Acxiom repurchased approximately 832,000 shares for $15 million during the quarter. Since inception of the share repurchase program in August 2011, the Company has repurchased 13.7 million shares for $217 million.
 
·  
On July 31, 2015, Acxiom completed the sale of its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners.
 
Financial Outlook
 
The Company’s guidance excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom reconfirms the following estimates for fiscal 2016:
 
· 
Revenue from continuing operations in the range of $815 million to $840 million.
·  
Earnings per diluted share from continuing operations in the range of $0.45 to $0.50.
 
Conference Call
 
Acxiom will hold a conference call at 4:00 p.m. CDT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at investors.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.
 
 
2
 
About Acxiom
 
Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.
 
Forward-Looking Statements
 
This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the expected revenue from the divisions may not be realized within the expected timeframe; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2015, which was filed with the Securities and Exchange Commission on May 27, 2015.
 
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.
 
We undertake no obligation to update the information contained in this press release or any other forward-looking statement.
 
Acxiom is a registered trademark of Acxiom Corporation.
 
 
 
3
 
To automatically receive Acxiom Corporation financial news by email, please visit www.acxiom.com and subscribe to email alerts.



 
4 
 

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



 
5 
 

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


 
6 
 

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


 
7 
 


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


 
8 
 

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



 
9 
 

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


 
10 
 

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


 
11 
 

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


 
12 
 

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

 
13 
 

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



 
14 
 

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


 
15 
 

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


 
16 
 

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


 
17 
 

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


 
18 
 

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


 
19 
 

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


 
20 
 
 




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