Total Revenue Grows 9%
Year-over-Year
Enters Into Definitive Agreement to Sell
Impact Email Business
Expands Share Repurchase Program
Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and
software-as-a-service company, today announced financial results
for its first quarter ended June 30, 2016.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20160804006428/en/
Financial Highlights
- Revenue: Total revenue was $215
million, up 9% compared to the first quarter of last year driven by
growth in each segment. US revenue of $197 million was up 11%
year-over-year.
- Operating Income (Loss): GAAP
operating income from continuing operations improved to $8 million
compared to a loss of $3 million in the prior year. Non-GAAP
operating income from continuing operations improved 44% to
approximately $21 million.
- Earnings (Loss) per Share: GAAP
diluted earnings per share from continuing operations were $0.05
compared to a loss per share of $0.07 in the prior year. Non-GAAP
diluted earnings per share from continuing operations were $0.15,
up from $0.09 a year ago.
- Operating Cash Flow: Operating
cash flow from continuing operations was $1 million, down from $12
million last year. For the trailing twelve-month period, operating
cash flow from continuing operations was $102 million, up from $89
million in the comparable period.
- Free Cash Flow to Equity: Free
cash flow to equity was negative $22 million compared to negative
$12 million in the prior year. For the trailing twelve-month
period, free cash flow to equity was $8 million, up from negative
$12 million in the comparable period.
Segment Results
Marketing Services
- Revenue was $110 million, up 2%
compared to the first quarter of last year. Marketing Database and
Consulting revenue grew 8% year-over-year, but was offset by
declines in Acxiom Impact. US revenue of $102 million was up 4%
year-over-year.
- Gross margin improved from 33% to
34%.
- Segment income was $20 million, up 20%
compared to the prior year.
Audience Solutions
- Revenue was $74 million, up 8% compared
to the prior year. US revenue of $66 million was up 9%
year-over-year.
- Gross margin improved from 54% to
57%.
- Segment income was $25 million, up 4%
compared to the prior year.
Connectivity
- Revenue was $31 million, up 52%
compared to the first quarter of last year. Connectivity exited the
quarter with a $120 million annualized revenue run rate.
- Gross margin declined from 58% to
56%.
- Segment income was break-even compared
to a loss of $1 million in the prior year.
A detailed discussion of our non-GAAP financial measures and a
reconciliation between GAAP and non-GAAP results is provided in the
schedules to this press release.
"I am pleased to report a solid first quarter, highlighted by
strong financial performance, new partnerships and continued
product innovation,” said Acxiom CEO Scott Howe. “Fiscal 2017 is
off to a good start, and we are focused on extending our early
momentum through the remainder of the year.”
Recent Business Highlights
- Connectivity added more than 20 new
customers during the quarter and added over 50 new partner
integrations. Marketers can now onboard and activate their data
across a growing network of more than 350 marketing platforms and
data providers.
- LiveRamp™ extended its data
connectivity partnership with Google, adding Customer Match to
an extensive set of integrations that include Google Analytics 360
Suite, Google DoubleClick Digital Marketing solutions and Google
Store Transactions for both AdWords and DoubleClick Search. The new
integration with Google Customer Match enables brands to activate
their first-party data for targeting across YouTube, Search and
Gmail.
- LiveRamp announced a new integration
with Facebook’s Offline Conversions API, allowing clients to
connect Facebook advertising campaigns with offline sales
transactions taking place in stores, branch offices, contact
centers and other brick-and-mortar locations.
- Acxiom announced strategic
“next-gen” enhancements to its proprietary recognition technology,
AbiliTec®, improving marketers’ ability to bring together
disparate consumer data sources for a single, current and accurate
view of a customer across all channels.
- Acxiom repurchased 926,000 shares
for approximately $20 million during the quarter. Since
inception of the share repurchase program in August 2011, Acxiom
has repurchased 16.4 million shares for $275 million.
Acxiom Impact Divestiture
Acxiom also announced that it has entered into a definitive
agreement to sell its Impact email business (Acxiom Impact) to Zeta
Interactive. In addition, Acxiom will enter into a separate
multi-year contract to provide Zeta Interactive with Connectivity
and Audience Solutions services. The transaction sharpens Acxiom’s
focus on providing the data foundation for the world’s best
marketers and opens the door to deeper partnerships with the
marketing ecosystem.
The sale is expected to close in the second quarter of fiscal
2017, following the satisfaction of customary closing
conditions.
Acxiom will use proceeds from the sale to help fund the
expansion of its share repurchase program. As part of the revised
program, Acxiom’s Board of Directors has increased the share
repurchase authorization by $100 million to $400 million and
extended the duration of the program through June 30, 2018. The
company is authorized to repurchase shares from time to time in
open market or privately negotiated transactions, depending on
prevailing market conditions and other factors. The repurchase
program may be suspended or discontinued at any time.
Financial Outlook
Acxiom’s non-GAAP guidance excludes the impact of non-cash
compensation, purchased intangible asset amortization,
restructuring charges and separation and transformation costs.
Acxiom’s fiscal 2017 guidance assumes that the sale of Acxiom
Impact will close on September 30, 2016.
For fiscal 2017, Acxiom now expects to report:
- Revenue in the range of $850 million
to $870 million
- GAAP diluted earnings per share in
the range of $0.10 to $0.14
- Non-GAAP diluted earnings per share
in the range of $0.55 to $0.60
Conference Call
Acxiom will hold a conference call at 4:00 p.m. CT today to
further discuss this information. Interested parties are invited to
listen to the call which will be broadcast via the Internet at
investors.acxiom.com. A slide presentation will be referenced
during the call and can be accessed here.
About Acxiom
Acxiom is an enterprise data, analytics and
software-as-a-service company that uniquely fuses trust, experience
and scale to fuel data-driven results. For over 45 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 3,250+ global clients. For more information
about Acxiom, visit Acxiom.com.
Forward-Looking Statements
This release and today’s conference call contains
forward-looking statements including, without limitation,
statements regarding expected levels of revenue and earnings per
share. Such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially. The following are factors, among others, that could
cause actual results to differ materially from these
forward-looking statements: the possibility that the expected
revenue from the divisions may not be realized within the expected
timeframe; the possibility that certain contracts may not generate
the anticipated revenue or profitability or may not be closed
within the anticipated time frames; the possibility that
significant customers may experience extreme, severe economic
difficulty or otherwise reduce or cancel the amount of business
they do with us; the possibility that we will not successfully
complete customer contract requirements on time or meet the service
levels specified in the contracts, which may result in contract
penalties or lost revenue; the possibility that we will not
complete the sale of Acxiom Impact within the anticipated
timeframe; the possibility that data suppliers might withdraw data
from us, leading to our inability to provide certain products and
services to our clients; the possibility that we may not be able to
attract, retain or motivate qualified technical, sales and
leadership associates, or that we may lose key associates; the
possibility that we may not be able to adequately adapt to rapidly
changing computing environments, technologies and marketing
practices; the possibility that we will not be able to continue to
receive credit upon satisfactory terms and conditions; the
possibility that negative changes in economic conditions in general
or other conditions might lead to a reduction in demand for our
products and services; the possibility that there will be changes
in consumer or business information industries and markets that
negatively impact the company; the possibility that the historical
seasonality of our business may change; the possibility that we
will not be able to achieve anticipated cost reductions and avoid
unanticipated costs; the possibility that the fair value of certain
of our assets may not be equal to the carrying value of those
assets now or in future time periods; the possibility that unusual
charges may be incurred; the possibility that changes in accounting
pronouncements may occur and may impact these forward-looking
statements; the possibility that we may encounter difficulties when
entering new markets or industries; the possibility that we could
experience loss of data center capacity or interruption of
telecommunication links; the possibility that new laws may be
enacted which limit our ability to provide services to our clients
and/or which limit the use of data; and other risks and
uncertainties, including those detailed from time to time in our
current and periodic reports filed with the Securities and Exchange
Commission, including our current reports on Form 8-K, quarterly
reports on Form 10-Q and annual reports on Form 10-K, particularly
the discussion under the caption “Item 1A. RISK FACTORS” in our
Annual Report on Form 10-K for the year ended March 31, 2016, which
was filed with the Securities and Exchange Commission on May 27,
2016.
With respect to the provision of products or services outside
our primary base of operations in the United States, all of the
above factors apply, along with the difficulty of doing business in
numerous sovereign jurisdictions due to differences in scale,
competition, culture, laws and regulations.
We undertake no obligation to update the information contained
in this press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
To automatically receive Acxiom Corporation financial news by
email, please visit www.acxiom.com and subscribe to email
alerts.
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except earnings (loss) per share) For the
Three Months Ended June 30, $ % 2016 2015 Variance
Variance Revenues 214,801 196,895
17,906 9.1 % Cost of revenue 122,819 117,709
5,110 4.3 % Gross profit 91,982 79,186 12,796 16.2 %
% Gross
margin 42.8 % 40.2 %
Operating expenses: Research and development 18,652 20,011 (1,359 )
(6.8 %) Sales and marketing 37,348 29,494 7,854 26.6 % General and
administrative 27,506 31,743 (4,237 ) (13.3 %) Gains, losses and
other items, net 314 807 (493 ) (61.1 %) Total
operating expenses 83,820 82,055 1,765 2.2 %
Income (loss) from operations 8,162 (2,869 ) 11,031 384.5 % %
Margin 3.8 % -1.5 % Other income
(expense): Interest expense (1,812 ) (1,885 ) 73 3.9 % Other, net
307 304 3 1.0 % Total other expense (1,505 ) (1,581 )
76 4.8 % Earnings (loss) from continuing operations before
income taxes 6,657 (4,450 ) 11,107 249.6 % Income taxes
2,681 732 1,949 266.3 % Net earnings (loss)
from continuing operations 3,976 (5,182 ) 9,158 176.7 %
Earnings from discontinued operations, net of tax - 4,143
(4,143 ) (100.0 %) Net earnings (loss) 3,976
(1,039 ) 5,015 482.7 % Basic earnings (loss) per share: Net
earnings (loss) from continuing operations 0.05 (0.07 ) 0.12 177.2
% Net earnings from discontinued operations - 0.05
(0.05 ) (100.0 %) Net earnings (loss) 0.05 (0.01 ) 0.06
484.9 % Diluted earnings (loss) per share: Net earnings
(loss) from continuing operations 0.05 (0.07 ) 0.12 175.3 % Net
earnings from discontinued operations - 0.05 (0.05 )
(100.0 %) Net earnings (loss) 0.05 (0.01 ) 0.06 475.8 %
Basic weighted average shares 77,471 77,918 Diluted
weighted average shares 79,353 77,918 Some earnings (loss)
per share amounts may not add due to rounding
ACXIOM CORPORATION
AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP EPS (1)
(Unaudited) (Dollars in thousands, except earnings (loss) per
share) For the Three Months Ended June 30, 2016 2015
Earnings (loss) from continuing operations before
income taxes 6,657 (4,450 ) Income taxes 2,681 732
Net earnings (loss) from continuing operations 3,976 (5,182
) Earnings from discontinued operations, net of tax - 4,143
Net earnings (loss) 3,976 (1,039 ) Earnings
(loss) per share: Basic 0.05 (0.01 ) Diluted 0.05
(0.01 ) Excluded items: Purchased intangible asset
amortization (cost of revenue) 4,077 3,754 Non-cash stock
compensation (cost of revenue and operating expenses) 8,590 8,123
Restructuring charges and other adjustments (gains, losses, and
other) 314 807 Separation and transformation costs (general and
administrative) - 3,414 Accelerated amortization (cost of revenue)
- 1,442 Total excluded items, continuing operations
12,981 17,540 Earnings from continuing operations
before income taxes and excluding items 19,638 13,090 Income
taxes (2) 7,852 5,632 Non-GAAP net earnings 11,786
7,458 Non-GAAP earnings per share: Basic 0.15
0.10 Diluted 0.15 0.09 Basic weighted
average shares 77,471 77,918 Diluted weighted average
shares 79,353 79,352
(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 reflecting an effective
non-GAAP tax rate of 40.0% and 43.0% in the first quarter of fiscal
2017 and 2016, respectively. The difference between our GAAP and
non-GAAP tax rates in the first quarter of fiscal 2017 and 2016
were primarily due to the net tax effects of excluded items.
ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30, $ % 2016
2015 Variance Variance Revenues
Marketing Services 109,715 107,726 1,989 1.8 % Audience Solutions
73,744 68,550 5,194 7.6 % Connectivity 31,342 20,619
10,723 52.0 % Total operating segment revenues 214,801 196,895
17,906 9.1 % Gross profit Marketing Services 37,466 36,034
1,432 4.0 % Audience Solutions 41,912 36,824 5,089 13.8 %
Connectivity 17,575 11,953 5,622 47.0 % Total
operating segment gross profit 96,953 84,811 12,142 14.3 %
Gross profit margin % Marketing Services 34.1 % 33.4 % Audience
Solutions 56.8 % 53.7 % Connectivity 56.1 % 58.0 % Total operating
segment gross margin 45.1 % 43.1 % Income (loss) from
operations Marketing Services 20,145 16,853 3,292 19.5 % Audience
Solutions 25,096 24,087 1,009 4.2 % Connectivity 291 (791 )
1,082 136.8 % Total operating segment income from operations 45,532
40,149 5,383 13.4 % Operating income (loss) margin %
Marketing Services 18.4 % 15.6 % Audience Solutions 34.0 % 35.1 %
Connectivity 0.9 % -3.8 % Total operating segment operating margin
21.2 % 20.4 %
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF SEGMENT
RESULTS (Unaudited) (Dollars in thousands) For the Three
Months Ended June 30, 2016 2015 Total operating segment
gross profit 96,953 84,811 Less: Purchased intangible asset
amortization 4,077 3,754 Non-cash stock compensation 894 429
Accelerated amortization - 1,442 Gross profit 91,982 79,186
Total operating segment income from operations 45,532
40,149 Less: Corporate expenses 24,389 25,478 Purchased
intangible asset amortization 4,077 3,754 Non-cash stock
compensation 8,590 8,123 Restructuring charges and other
adjustments 314 807 Separation and transformation costs - 3,414
Accelerated amortization - 1,442 Income (loss) from
operations 8,162 (2,869)
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in
thousands) For the Three Months Ended June 30, 2016
2015 Net earnings (loss) from continuing
operations 3,976 (5,182 ) Income taxes 2,681 732
Other expense (1,505 ) (1,581 ) Income (loss) from
operations 8,162 (2,869 ) Depreciation and amortization
20,790 21,775 Less: Deferred interest amortization - 256
Adjusted depreciation and amortization 20,790 21,519
EBITDA 28,952 18,650
Other adjustments: Non-cash stock compensation (cost of revenue and
operating expenses) 8,590 8,123 Restructuring charges and other
adjustments (gains, losses, and other) 314 807 Separation and
transformation costs (general and administrative) - 3,414
Other adjustments 8,904 12,344
Adjusted EBITDA 37,856 30,994
(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 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Dollars in thousands) June 30, March 31, $ %
2016 2016 Variance Variance
Assets
Current assets: Cash and cash equivalents 150,160 189,629 (39,469 )
(20.8 %) Trade accounts receivable, net 127,655 138,650 (10,995 )
(7.9 %) Refundable income taxes 7,606 9,834 (2,228 ) (22.7 %) Other
current assets 34,919 37,897 (2,978 ) (7.9 %)
Total current assets 320,340 376,010 (55,670 ) (14.8
%) Property and equipment 530,588 528,675 1,913 0.4 % Less -
accumulated depreciation and amortization 351,377 345,632
5,745 1.7 % Property and equipment, net 179,211
183,043 (3,832 ) (2.1 %) Software, net of
accumulated amortization 52,537 55,735 (3,198 ) (5.7 %) Goodwill
492,598 492,745 (147 ) (0.0 %) Purchased software licenses, net of
accumulated amortization 9,561 10,116 (555 ) (5.5 %) Deferred
income taxes 6,170 6,885 (715 ) (10.4 %) Other assets, net 23,547
25,315 (1,768 ) (7.0 %) 1,083,964
1,149,849 (65,885 ) (5.7 %)
Liabilities and
Stockholders' Equity
Current liabilities: Current installments of long-term debt 32,262
32,243 19 0.1 % Trade accounts payable 26,216 37,717 (11,501 )
(30.5 %) Accrued payroll and related expenses 27,733 61,309 (33,576
) (54.8 %) Other accrued expenses 47,977 48,254 (277 ) (0.6 %)
Deferred revenue 38,378 44,477 (6,099 ) (13.7 %)
Total current liabilities 172,566 224,000
(51,434 ) (23.0 %) Long-term debt 150,124 157,897 (7,773 )
(4.9 %) Deferred income taxes 52,571 53,964 (1,393 ) (2.6 %)
Other liabilities 14,939 15,020 (81 ) (0.5 %)
Stockholders' equity: Common stock 13,102 13,039 63 0.5 %
Additional paid-in capital 1,095,510 1,082,220 13,290 1.2 %
Retained earnings 602,477 598,501 3,976 0.7 % Accumulated other
comprehensive income 7,590 8,590 (1,000 ) (11.6 %) Treasury stock,
at cost (1,024,915 ) (1,003,382 ) (21,533 ) (2.1 %) Total
stockholders' equity 693,764 698,968 (5,204 ) (0.7 %)
1,083,964 1,149,849 (65,885 ) (5.7 %)
ACXIOM
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) (Dollars in thousands) For the Three
Months Ended June 30, 2016 2015
Cash flows from operating activities: Net earnings (loss)
3,976 (1,039 ) Earnings from discontinued operations, net of tax -
(4,143 ) Non-cash operating activities: Depreciation and
amortization 20,790 21,775 Loss on disposal or impairment of assets
- 241 Deferred income taxes (678 ) (1,522 ) Non-cash stock
compensation expense 8,590 8,123 Changes in operating assets and
liabilities: Accounts receivable 9,487 (8,037 ) Other assets 5,383
384 Accounts payable and other liabilities (41,021 ) (3,530 )
Deferred revenue (5,777 ) (255 ) Net cash provided by operating
activities 750 11,997 Cash flows from investing
activities: Capitalized software (3,982 ) (2,797 ) Capital
expenditures (10,694 ) (12,876 ) Data acquisition costs (20 ) (430
) Net cash used in investing activities (14,696 ) (16,103 ) Cash
flows from financing activities: Payments of debt (8,053 ) (8,099 )
Sale of common stock, net of stock acquired for withholding taxes
2,974 2,069 Excess tax benefits from share-based compensation 514
(77 ) Acquisition of treasury stock (20,207 ) (14,951 ) Net cash
used in financing activities (24,772 ) (21,058 ) Cash flows from
discontinued operations: From operating activities - 11,653 From
investing activities - (4,484 ) From financing activities -
(153 ) Net cash provided by discontinued operations - 7,016
Effect of exchange rate changes on cash (751 ) 330
Net change in cash and cash equivalents (39,469 ) (17,818 )
Cash and cash equivalents at beginning of period 189,629
141,010 Cash and cash equivalents at end of period 150,160
123,192
Supplemental cash flow
information: Cash paid (received) during the period for:
Interest 2,258 2,185 Income taxes (76 ) (1,044 ) Payments on
capital leases and installment payment arrangements - 216 Other
debt payments, excluding line of credit 8,053 8,036
ACXIOM CORPORATION AND
SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited) (Dollars in thousands)
06/30/15 09/30/15
12/31/15 03/31/16 FY2016 06/30/16
GAAP Net Cash Provided by Operating Activities 11,997 21,357
37,018 43,270 113,642 750 Less: Capitalized software (2,797)
(3,936) (3,627) (4,520) (14,880) (3,982) Capital expenditures
(12,876) (10,244) (10,702) (13,601) (47,423) (10,694) Data
acquisition costs (430) (281) (424) (418) (1,553) (20) Payments on
capital leases and installment payment arrangements (63) - - - (63)
- Other required debt payments (8,036) (8,039)
(8,045) (8,048) (32,168) (8,053)
Free Cash Flow to Equity (12,205) (1,143)
14,220 16,683 17,555
(21,999)
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS-GAAP (Unaudited) (Dollars in
thousands, except earnings (loss) per share)
Q1 FY17 to Q1 FY16 06/30/15
09/30/15 12/31/15
03/31/16 FY2016 06/30/16 %
$ Revenues 196,895 207,345 221,193 224,655
850,088 214,801 9.1 % 17,906 Cost of revenue 117,709
121,312 125,735 123,626 488,382 122,819
4.3 % 5,110 Gross profit 79,186 86,033 95,458 101,029
361,706 91,982 16.2 % 12,796
% Gross margin 40.2
% 41.5 % 43.2 % 45.0
% 42.5 % 42.8 % Operating
expenses Research and development 20,011 19,078 18,400 16,758
74,247 18,652 -6.8 % (1,359 ) Sales and marketing 29,494 34,259
36,581 45,842 146,176 37,348 26.6 % 7,854 General and
administrative 31,743 31,519 36,793 35,330 135,385 27,506 -13.3 %
(4,237 ) Impairment of goodwill and other - 729 - 6,100 6,829 - - -
Gains, losses and other items, net 807 2,504
4,058 4,763
12,132 314 -61.1 % (493 ) Total operating
expenses 82,055 88,089 95,832 108,793 374,769 83,820 2.2 % 1,765
Income (loss) from operations (2,869 ) (2,056 ) (374 )
(7,764 ) (13,063 ) 8,162 384.5 % 11,031
% Margin -1.5
% -1.0 % -0.2 % -3.5
% -1.5 % 3.8 % Other income
(expense) Interest expense (1,885 ) (1,956 ) (1,948 ) (1,880 )
(7,669 ) (1,812 ) 3.9 % 73 Other, net 304 59
303 (214 )
452 307 1.0 % 3 Total other expense (1,581 ) (1,897 )
(1,645 ) (2,094 ) (7,217 ) (1,505 ) 4.8 % 76 Earnings (loss)
from continuing operations before income taxes (4,450 ) (3,953 )
(2,019 ) (9,858 ) (20,280 ) 6,657 249.6 % 11,107 Income taxes 732
(2,608 ) (1,580 )
(8,176 ) (11,632 ) 2,681 266.3 % 1,949
Net earnings (loss) from continuing operations (5,182 ) (1,345 )
(439 ) (1,682 ) (8,648 ) 3,976 176.7 % 9,158 Earnings (loss)
from discontinued operations, net of tax 4,143
12,068 (971 ) 111
15,351 - -100.0 % (4,143 ) Net earnings
(loss) (1,039 ) 10,723 (1,410 ) (1,571 ) 6,703 3,976 482.7 % 5,015
Diluted earnings (loss) per share (0.01 ) 0.14
(0.02 ) (0.02 )
0.09 0.05 475.8 % 0.06 Diluted earnings (loss)
per share continuing operations (0.07 ) (0.02 )
(0.01 ) (0.02 ) (0.11 )
0.05 175.3 % 0.12 Some earnings (loss) per share
amounts may not add due to rounding
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF
GAAP TO NON-GAAP EPS (Unaudited) (Dollars in thousands, except
earnings (loss) per share)
06/30/15
09/30/15
12/31/15
03/31/16
FY2016 06/30/16 Earnings (loss)
from continuing operations before income taxes (4,450 ) (3,953 )
(2,019 ) (9,858 ) (20,280 ) 6,657 Income taxes 732
(2,608 ) (1,580 ) (8,176
) (11,632 ) 2,681 Net earnings (loss) from
continuing operations (5,182 ) (1,345 ) (439 ) (1,682 ) (8,648 )
3,976 Earnings (loss) from discontinued operations, net of
tax 4,143
12,068
(971 ) 111
15,351 - Net earnings (loss) (1,039 )
10,723 (1,410 ) (1,571 )
6,703 3,976 Earnings (loss) per share:
Basic (0.01 ) 0.14 (0.02 )
(0.02 ) 0.09 0.05 Diluted
(0.01 ) 0.14 (0.02 )
(0.02 ) 0.09 0.05 Excluded
items: Purchased intangible asset amortization (cost of revenue)
3,754 3,754 3,754 4,204 15,466 4,077 Non-cash stock compensation
(cost of revenue and operating expenses) 8,123 7,360 8,046 7,934
31,463 8,590 Impairment of goodwill and other - 729 - 6,100 6,829 -
Restructuring charges and other adjustments (gains, losses, and
other) 807 2,504 4,058 4,763 12,132 314 Separation and
transformation costs (general and administrative) 3,414 6,098 6,628
4,686 20,826 - Accelerated amortization (cost of revenue) 1,442
78 78
252 1,850 - Total
excluded items, continuing operations 17,540
20,523 22,564 27,939
88,566 12,981 Earnings from
continuing operations before income taxes and excluding items
13,090 16,570 20,545 18,081 68,286 19,638 Income taxes 5,632
5,163 6,399
4,262 21,456 7,852
Non-GAAP net earnings 7,458 11,407
14,146 13,819
46,830 11,786 Non-GAAP earnings per share:
Basic 0.10 0.15
0.18 0.18 0.60
0.15 Diluted 0.09 0.14
0.18 0.18 0.59
0.15 Basic weighted average shares 77,918
77,960 77,831
76,753 77,616 77,471
Diluted weighted average shares 79,352 79,310
79,346 78,386
79,099 79,353 Some earnings per share
amounts may not add due to rounding ACXIOM
CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited)
(Dollars in thousands)
Q1 FY17 to Q1 FY16 06/30/14
09/30/14 12/31/14
03/31/15 FY2016 06/30/16 %
$
Revenues: Marketing services 107,726 112,979
115,725 113,342 449,772 109,715 1.8 % 1,989 Audience Solutions
68,550 72,122 77,046 80,128 297,846 73,744 7.6 % 5,194 Connectivity
20,619 22,244 28,422
31,185 102,470
31,342 52.0 % 10,723 Total operating segment revenues
196,895 207,345 221,193
224,655 850,088
214,801 9.1 % 17,906 Gross profit: Marketing
services 36,034 37,545 38,561 40,117 152,257 37,466 4.0 % 1,432
Audience Solutions 36,824 39,170 45,265 46,457 167,716 41,912 13.8
% 5,089 Connectivity 11,953 13,499
16,130 19,617
61,199 17,575 47.0 % 5,622 Total
operating segment gross profit 84,811 90,214
99,956 106,191
381,172 96,953 14.3 % 12,142
Gross margin: Marketing services 33.4 % 33.2 % 33.3 % 35.4 %
33.9 % 34.1 % Audience Solutions 53.7 % 54.3 % 58.8 % 58.0 % 56.3 %
56.8 % Connectivity 58.0 % 60.7 % 56.8 % 62.9 % 59.7 % 56.1 %
Total operating segment gross margin 43.1 % 43.5 % 45.2 %
47.3 % 44.8 % 45.1 % Income (loss) from continuing
operations: Marketing services 16,853 17,908 20,309 19,301
74,371 20,145 19.5 % 3,292 Audience Solutions 24,087 25,190 30,723
29,598 109,598 25,096 4.2 % 1,009 Connectivity (791 )
(1,068 ) (1,015 ) (424 )
(3,298 ) 291 136.8 % 1,082 Total operating segment
income from operations 40,149 42,030
50,017 48,475
180,671 45,532 13.4 % 5,383 Margin:
Marketing services 15.6 % 15.9 % 17.5 % 17.0 % 16.5 % 18.4 %
Audience Solutions 35.1 % 34.9 % 39.9 % 36.9 % 36.8 % 34.0 %
Connectivity -3.8 % -4.8 % -3.6 % -1.4 % -3.2 % 0.9 % Total
operating segment operating margin 20.4 % 20.3 % 22.6 % 21.6 % 21.3
% 21.2 % Some totals may not add due to rounding.
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP EPS GUIDANCE (1)
(Unaudited) (Dollars in thousands, except earnings per share)
For the year ending March 31, 2017 Low Range High Range
Earnings before income taxes 14,000 21,000 Income
taxes 7,000 9,870 Net earnings 7,000
11,130 Diluted earnings per share $ 0.09 $ 0.14
Excluded items: Purchased intangible asset amortization
16,000 16,000 Non-cash stock compensation 32,000 32,000
Restructuring charges 1,000 1,000 Separation and transformation
costs 10,000 10,000 Total excluded items
59,000 59,000 Earnings before income taxes and
excluding items 73,000 80,000 Income taxes (2) 29,200
32,000 Non-GAAP net earnings 43,800
48,000 Non-GAAP diluted earnings per share $ 0.55 $ 0.60
Diluted weighted average shares 80,000 80,000
(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 reflecting an effective
non-GAAP tax rate of 40.0%. The difference between our GAAP and
Non-GAAP tax rates was due to the effect of excluded items.
ACXIOM CORPORATION APPENDIX A Q1 FISCAL 2017 FINANCIAL
RESULTS EXPLANATION OF NON-GAAP MEASURES To
supplement our financial results we use non-GAAP measures as
indicated in the press release schedules, which excludes certain
expenses related to acquisitions as well as other significant
expenses including non-cash stock compensation and restructuring
charges, that we belive 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 condensed consolidated financial statements
prepared in accordance with GAAP. Our management regularly uses our
supplemental non-GAAP financial measures internally to understand,
manage and evaluate our business and to make operating decisions.
These non-GAAP 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 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
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 current 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 and other adjustments:
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 charges, reported as gains,
losses, and other items, net, are excluded from non-GAAP results
because such expense is not used by us to assess the core
profitability of our business operations.
Separation and
transformation costs:
We incurred significant expenses in
connection with the separation of the IT Infrastructure Management
and Marketing and Data Services business and subsequent
transformation activities post separation, which we generally would
not have otherwise incurred in the periods presented as part of our
continuing operations. Separation and transformation costs consist
of third party consulting arrangements. We believe it is useful for
investors to understand the effects of these items and excluding
such items in non-GAAP financial measures provides meaningful
supplemental information. Our non-GAAP financial schedules
are:
Non-GAAP
EPS:
Our non-GAAP earnings per share reflects
adjustments as described above, as well as the related tax effects
where applicable.
Adjusted
EBITDA:
Adjusted EBITDA is defined as net income
(loss) 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804006428/en/
AcxiomLauren Dillard, 650-372-2242Investor
Relationsinvestor.relations@acxiom.comEACXM
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