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Acxiom Announces Third Quarter Results

Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its third quarter ended December 31, 2013.

Total revenue for the third quarter was $278 million, up 2 percent from $273 million for the third quarter of fiscal 2013. Income from operations for the quarter was $20 million compared to $27 million for the prior-year period. Excluding unusual items, operating income was $29 million, up 10 percent from $27 million for the same period last year. Marketing and Data Services revenue for the third quarter increased 6 percent to $207 million compared to $195 million for the third quarter of last year. IT Infrastructure Management revenue was $62 million in the recent quarter, down 11 percent as expected from $70 million in the same period last year. Earnings per diluted share attributable to Acxiom stockholders were flat at $0.19. Excluding unusual items, diluted earnings per share were $0.25, up from $0.19 a year ago. Included in the current quarter is a tax-related adjustment which positively impacted both earnings-per-share measures by roughly $0.04 per share.

Operating cash flow was up 48 percent to $195 million for the trailing twelve-month period compared to $133 million for the same period a year ago. Free cash flow to equity was up 136 percent to $103 million for the trailing twelve-month period compared to $44 million for the same prior-year period. Free cash flow to equity for the prior-year trailing twelve-month period excludes $73 million in proceeds from the sale of the company’s background screening business. Free cash flow to equity is a non-GAAP financial measure. A reconciliation to the comparable GAAP measure, operating cash flow, is attached.

A schedule outlining the impact of unusual items on the current and prior-year results is attached.

“We are thrilled with the progress made since our release of the Acxiom Audience Operating System,” said Acxiom CEO Scott Howe. “After just four months since launch, we now have more than 30 customers that are implementing or testing one or more aspects of AOS™.”

Third Quarter Highlights:

  • Acxiom and Starcom MediaVest Group (SMG) are entering into a partnership by which SMG becomes the first agency to license Acxiom Audience Operating System (AOS) and bring it to market. SMG is the largest media agency in the world.
  • Acxiom signed seven new AOS agreements during the quarter with customers in several key industries including: Financial Services, Insurance, Telecommunications and Retail.
  • Acxiom increased its share repurchase authorization from $200 million to $250 million. The company repurchased approximately 400,000 shares for $13.8 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 12.3 million shares, or approximately 15 percent of the outstanding common stock, for $193 million.
  • Subsequent to quarter end, Acxiom was named “Supplier of the Year” By Media Magazine, one of the industry’s most respected publications, for its contributions to the industry with its recent launches of AOS and AboutTheData.com.
  • On November 6th, Acxiom announced its plans to reduce its annual cost base by roughly $20 to $30 million over the next 6 to 12 months. The company is well underway on this initiative, and to date has taken steps to realize approximately $15 million in annualized cost reductions.

Segment Results:

  • Marketing and Data Services: Revenue for the third quarter was $207 million, up from $195 million for the same period a year ago. U.S. revenue increased 6 percent to $175 million in the current quarter compared to $165 million for the third quarter of last year. Income from operations for the third quarter was $23 million, up from $18 million for the prior-year period. Operating margin was 11 percent as compared to 9 percent for the third quarter of last year.
  • IT Infrastructure Management: Revenue for the third quarter decreased as expected by 11 percent to $62 million compared to $70 million for the same period a year ago. Income from operations for the recent quarter was $6 million compared to $10 million for the prior-year period. Operating margin was approximately 10 percent, down from 14 percent in the third quarter of last year.
  • Other Services: Revenue for the third quarter was $9 million, up from $8 million in the comparable prior-year period. Operating margin improved to approximately 6 percent compared to a loss in the third quarter of last year.

Financial Guidance

The following projections are forward-looking and are subject to certain risks and uncertainties that could cause actual results to differ materially as detailed in the Forward-Looking Statements section of this press release. Our guidance excludes unusual items. Acxiom’s estimates for fiscal 2014 are as follows:

  • As previously disclosed, we expect revenue for the fiscal year to be down slightly compared to $1.099 billion in fiscal 2013. The small revenue decrease is primarily driven by an expected decline in IT Infrastructure Management revenues.
  • We now expect earnings per diluted share attributable to Acxiom stockholders to be as much as $0.82. This is an increase from our previous guidance of roughly flat compared to the prior-year period.

Conference Call

Acxiom will hold a conference call at 4:00 p.m. CST today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

Web Link to Financials

You may link to http://www.acxiom.com/FY14_Q3_Financials for the detailed financial information we typically attach to our earnings releases.

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 for fiscal 2014, statements regarding cost base reductions, and statements regarding new customers and new product launches and capabilities. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that 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 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, 2013, which was filed with the Securities and Exchange Commission on May 29, 2013.

With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom is a registered trademark of Acxiom Corporation.

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

       
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Three Months Ended
December 31,
$ %
2013 2012 Variance   Variance
 
Revenue:
Marketing and data services 206,662 195,146 11,516 5.9 %
IT Infrastructure management services 62,099 69,916 (7,817 ) (11.2 %)
Other services 9,112   8,040   1,072 13.3 %
Total revenue 277,873 273,102 4,771 1.7 %
 
Operating costs and expenses:
Cost of revenue 210,053 208,848 (1,205 ) (0.6 %)
Selling, general and administrative 43,383 37,482 (5,901 ) (15.7 %)
Gains, losses and other items, net 4,657   (126 ) 4,783 3796.0 %
 
Total operating costs and expenses 258,093   246,204   (11,889 ) (4.8 %)
 
Income from operations 19,780   26,898   (7,118 ) (26.5 %)
% Margin 7.1 % 9.8 %
Other income (expense):
Interest expense (3,114 ) (3,178 ) 64 2.0 %
Other, net 1,484   565   919 162.7 %
 
Total other expense (1,630 ) (2,613 ) 983 37.6 %
 
Earnings before income taxes 18,150 24,285 (6,135 ) (25.3 %)
 
Income taxes 3,083   9,836   6,753 68.7 %
 
Net earnings 15,067 14,449 618 4.3 %
 
Less: Net loss attributable to noncontrolling interest -   (76 ) 76 100.0 %
 
Net earnings attributable to Acxiom 15,067   14,525   542 3.7 %
 
Basic earnings per share:
Net earnings 0.20   0.19   0.01 5.3 %
Net earnings attributable to Acxiom stockholders 0.20   0.20   0.00 0.0 %
 
 
Diluted earnings per share:
Net earnings 0.19   0.19   0.00 0.0 %
Net earnings attributable to Acxiom stockholders 0.19   0.19   0.00 0.0 %
 
       
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
 
For the Nine Months Ended
December 31,
$ %
2013 2012 Variance   Variance
 
Revenue:
Marketing and data services 595,407 586,230 9,177 1.6 %
IT Infrastructure management services 198,309 210,267 (11,958 ) (5.7 %)
Other services 26,621   25,731   890 3.5 %
Total revenue 820,337 822,228 (1,891 ) (0.2 %)
 
Operating costs and expenses:
Cost of revenue 621,953 627,323 5,370 0.9 %
Selling, general and administrative 123,857 112,309 (11,548 ) (10.3 %)
Gains, losses and other items, net 11,044   66   (10,978 ) (16633.3 %)
 
Total operating costs and expenses 756,854   739,698   (17,156 ) (2.3 %)
 
Income from operations 63,483   82,530   (19,047 ) (23.1 %)
% Margin 7.7 % 10.0 %
Other income (expense):
Interest expense (9,113 ) (9,735 ) 622 6.4 %
Other, net 1,238   (36 ) 1,274 3538.9 %
 
Total other expense (7,875 ) (9,771 ) 1,896 19.4 %
 
Earnings before income taxes 55,608 72,759 (17,151 ) (23.6 %)
 
Income taxes 17,582   28,739   11,157 38.8 %
 
Net earnings 38,026 44,020 (5,994 ) (13.6 %)
 
Less: Net loss attributable to noncontrolling interest (60 ) (349 ) 289 82.8 %
 
Net earnings attributable to Acxiom 38,086   44,369   (6,283 ) (14.2 %)
 
Basic earnings per share:
Net earnings 0.51   0.59   (0.08 ) (13.6 %)
Net earnings attributable to Acxiom stockholders 0.51   0.59   (0.08 ) (13.6 %)
 
 
Diluted earnings per share:
Net earnings 0.50   0.57   (0.07 ) (12.3 %)
Net earnings attributable to Acxiom stockholders 0.50   0.58   (0.08 ) (13.8 %)
 
       
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
For the Three Months Ended For the Nine Months Ended
December 31, December 31,
2013 2012 2013 2012
 
 
Earnings before income taxes 18,150 24,285 55,608 72,759
 
Income taxes 3,083   9,836   17,582   28,739  
 
Net earnings 15,067 14,449 38,026 44,020
 
Less: Net loss attributable to noncontrolling interest -   (76 ) (60 ) (349 )
 
Net earnings attributable to Acxiom 15,067   14,525   38,086   44,369  
 
Earnings per share attributable to Acxiom stockholders:
 
Basic 0.20   0.20   0.51   0.59  
 
Diluted 0.19   0.19   0.50   0.58  
 
Unusual items:
Business separation expenses 4,897 - 7,083 -
Legal settlement accruals 1,000 - 4,200 -
Restructuring charges and other adjustments 3,657 (126 ) 6,844 66
Gain on investment (2,567 ) -   (2,567 ) -  
 
Total unusual items 6,987   (126 ) 15,560   66  
 
Earnings before income taxes and excluding unusual items 25,137 24,159 71,168 72,825
 
Income taxes 5,690   9,786   23,575   28,763  
 
Non-GAAP net earnings 19,447 14,373 47,593 44,062
 
Less: Net gain (loss) attributable to noncontrolling interest -   (76 ) (60 ) (349 )
 
Non-GAAP net earnings attributable to Acxiom 19,447   14,449   47,653   44,411  
 
Non-GAAP earnings per share attributable to Acxiom stockholders:
 
Basic 0.26   0.19   0.64   0.59  
 
Diluted 0.25   0.19   0.62   0.58  
 
Diluted weighted average shares 77,839   75,878   76,456   76,987  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
                     
For the Three Months Ended For the Nine Months Ended
December 31, December 31,
2013 2012 2013 2012
 
Income from operations 19,780 26,898 63,483 82,530
 
Unusual items 9,554 (126 ) 18,127 66
 
Income from operations before unusual items 29,334 26,772   81,610 82,596
 
   
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
 
 
For the Three Months Ended
 
December 31, December 31,
2013 2012
 
Basic earnings per share:
Numerator - net earnings 15,067 14,449
Denominator - weighted-average shares outstanding 75,009 74,103
Basic earnings per share 0.20 0.19
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 15,067 14,525
Denominator - weighted-average shares outstanding 75,009 74,103
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.20 0.20
 
Diluted earnings per share:
Numerator - net earnings 15,067 14,449
Denominator - weighted-average shares outstanding 75,009 74,103
Dilutive effect of common stock options, warrants and restricted stock 2,830 1,775
77,839 75,878
 
Diluted earnings per share 0.19 0.19
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 15,067 14,525
Denominator - weighted-average shares outstanding 75,009 74,103
Dilutive effect of common stock options, warrants, and restricted stock 2,830 1,775
77,839 75,878
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.19 0.19
 
   
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except earnings per share)
 
 
For the Nine Months Ended
 
December 31, December 31,
2013 2012
 
Basic earnings per share:
Numerator - net earnings 38,026 44,020
Denominator - weighted-average shares outstanding 74,155 75,195
Basic earnings per share 0.51 0.59
 
Basic earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 38,086 44,369
Denominator - weighted-average shares outstanding 74,155 75,195
Basic earnings per share - net earnings attributable to Acxiom stockholders 0.51 0.59
 
Diluted earnings per share:
Numerator - net earnings 38,026 44,020
Denominator - weighted-average shares outstanding 74,155 75,195
Dilutive effect of common stock options, warrants and restricted stock 2,301 1,792
76,456 76,987
 
Diluted earnings per share 0.50 0.57
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders:
Numerator - net earnings attributable to Acxiom 38,086 44,369
Denominator - weighted-average shares outstanding 74,155 75,195
Dilutive effect of common stock options, warrants, and restricted stock 2,301 1,792
76,456 76,987
 
Diluted earnings per share - net earnings attributable to Acxiom stockholders 0.50 0.58
 
   
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
       
 
For the Three Months Ended
 
December 31, December 31,
Revenue: 2013 2012
 
Marketing and data services 206,662 195,146
IT Infrastructure management services 62,099 69,916
Other services 9,112   8,040  
 
Total revenue 277,873   273,102  
 
 
Income from operations:
 
Marketing and data services 22,518 18,186
IT Infrastructure management services 6,316 9,622
Other services 500 (1,036 )
Corporate (9,554 ) 126  
 
Total income from operations 19,780   26,898  
 
Margin:
 
Marketing and data services 10.9 % 9.3 %
IT Infrastructure management services 10.2 % 13.8 %
Other services 5.5 % -12.9 %
 
Total margin 7.1 % 9.8 %
 
   
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
       
 
For the Nine Months Ended
 
December 31, December 31,
Revenue: 2013 2012
 
Marketing and data services 595,407 586,230
IT Infrastructure management services 198,309 210,267
Other services 26,621   25,731  
 
Total revenue 820,337   822,228  
 
 
Income from operations:
 
Marketing and data services 51,189 59,151
IT Infrastructure management services 29,044 26,973
Other services 1,377 (3,528 )
Corporate (18,127 ) (66 )
 
Total income from operations 63,483   82,530  
 
Margin:
 
Marketing and data services 8.6 % 10.1 %
IT Infrastructure management services 14.6 % 12.8 %
Other services 5.2 % -13.7 %
 
Total margin 7.7 % 10.0 %
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
           
December 31, March 31, $ %
2013 2013 Variance   Variance

Assets

Current assets:
Cash and cash equivalents 380,908 222,974 157,934 70.8 %
Trade accounts receivable, net 168,931 159,882 9,049 5.7 %
Deferred income taxes 14,055 13,496 559 4.1 %
Refundable income taxes - 5,809 (5,809 ) (100.0 %)
Other current assets 53,405   58,935   (5,530 ) (9.4 %)
 
Total current assets 617,299 461,096 156,203 33.9 %
 
Property and equipment 846,950 822,439 24,511 3.0 %
Less - accumulated depreciation and amortization 632,172   591,687   40,485 6.8 %
 
Property and equipment, net 214,778   230,752   (15,974 ) (6.9 %)
 
Software, net of accumulated amortization 37,063 24,471 12,592 51.5 %
Goodwill 380,591 381,129 (538 ) (0.1 %)
Purchased software licenses, net of accumulated amortization 19,509 23,604 (4,095 ) (17.3 %)
Deferred costs, net 24,564 42,971 (18,407 ) (42.8 %)
Data acquisition costs 8,142 10,631 (2,489 ) (23.4 %)
Other assets, net 11,935   13,052   (1,117 ) (8.6 %)
 
1,313,881   1,187,706   126,175 10.6 %
 

Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 25,636 16,105 9,531 59.2 %
Trade accounts payable 23,562 35,786 (12,224 ) (34.2 %)
Accrued payroll and related expenses 51,287 62,390 (11,103 ) (17.8 %)
Other accrued expenses 75,394 68,270 7,124 10.4 %
Deferred revenue 50,149 41,388 8,761 21.2 %
Income taxes 1,719   637   1,082 169.9 %
 
Total current liabilities 227,747   224,576   3,171 1.4 %
 
Long-term debt 297,703 237,400 60,303 25.4 %
 
Deferred income taxes 91,823 94,918 (3,095 ) (3.3 %)
 
Other liabilities 11,253 11,444 (191 ) (1.7 %)
 
Stockholders' equity:
Common stock 12,527 12,134 393 3.2 %
Additional paid-in capital 964,906 885,184 79,722 9.0 %
Retained earnings 632,052 593,966 38,086 6.4 %
Accumulated other comprehensive income 13,197 11,423 1,774 15.5 %
Treasury stock, at cost (937,327 ) (882,959 ) (54,368 ) (6.2 %)
Total Acxiom stockholders' equity 685,355 619,748 65,607 10.6 %
Noncontrolling interest -   (380 ) 380 100.0 %
 
Total equity 685,355   619,368   65,987 10.7 %
 
1,313,881   1,187,706   126,175 10.6 %
 
         
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended
December 31,
2013   2012
 
Cash flows from operating activities:
Net earnings 15,067 14,449
Non-cash operating activities:
Depreciation and amortization 25,608 29,363
Gain on disposal or impairment of assets (2,567 ) -
Loss on early extinguishment of debt 664 -
Deferred income taxes (3,138 ) (2,962 )
Non-cash stock compensation expense 3,455 3,103
Changes in operating assets and liabilities:
Accounts receivable 7,395 (15,867 )
Other assets 6,646 5,492
Deferred costs (89 ) (326 )
Accounts payable and other liabilities 8,114 5,525
Deferred revenue 2,617   (234 )
Net cash provided by operating activities 63,772   38,543  
Cash flows from investing activities:
Capitalized software (5,495 ) (5,443 )
Capital expenditures (6,700 ) (10,260 )
Data acquisition costs (1,786 ) (2,766 )
Payments from investments 3,633   -  
Net cash used by investing activities (10,348 ) (18,469 )
Cash flows from financing activities:
Proceeds from debt 300,000 -
Payments of debt (220,934 ) (6,252 )
Fees for debt refinancing (4,370 ) -
Sale of common stock 50,547 2,128
Acquisition of treasury stock (13,826 ) (18,256 )
Acquisition of NCI (600 ) -  
Net cash used by financing activities 110,817   (22,380 )
Effect of exchange rate changes on cash 51   122  
 
Net change in cash and cash equivalents 164,292 (2,184 )
Cash and cash equivalents at beginning of period 216,616   188,404  
Cash and cash equivalents at end of period 380,908   186,220  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 3,281 3,178
Income taxes 4,766 12,104
Payments on capital leases and installment payment arrangements 1,675 4,002
Payments on software and data license liabilities - 78
Other debt payments, excluding line of credit 4,259 2,172
Prepayment of debt 215,000 -
 
         
ACXIOM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Nine Months Ended
December 31,
2013     2012
 
Cash flows from operating activities:
Net earnings 38,026 44,020
Non-cash operating activities:
Depreciation and amortization 76,127 89,594
Loss (gain) on disposal or impairment of assets (2,567 ) 25
Loss on early extinguishment of debt 664 -
Deferred income taxes (3,666 ) (6,428 )
Non-cash stock compensation expense 10,344 8,906
Changes in operating assets and liabilities:
Accounts receivable 1,531 (13,925 )
Other assets 6,791 756
Deferred costs (89 ) (1,600 )
Accounts payable and other liabilities (12,553 ) (32,607 )
Deferred revenue 6,534   (12,830 )
Net cash provided by operating activities 121,142   75,911  
Cash flows from investing activities:
Capitalized software (19,109 ) (13,190 )
Capital expenditures (24,889 ) (21,976 )
Data acquisition costs (4,660 ) (6,464 )
Payments from investments 3,633   -  
Net cash used by investing activities (45,025 ) (41,630 )
Cash flows from financing activities:
Proceeds from debt 300,000 -
Payments of debt (230,167 ) (19,790 )
Fees for debt refinancing (4,370 ) -
Sale of common stock 69,106 7,863
Acquisition of treasury stock (52,663 ) (65,356 )
Acquisition of NCI (600 ) -
Contingent consideration paid for prior acquisitions -   (287 )
Net cash used by financing activities 81,306   (77,570 )
Effect of exchange rate changes on cash 511   (139 )
 
Net change in cash and cash equivalents 157,934 (43,428 )
Cash and cash equivalents at beginning of period 222,974   229,648  
Cash and cash equivalents at end of period 380,908   186,220  
 
Supplemental cash flow information:
Cash paid during the period for:
Interest 9,267 9,678
Income taxes 15,774 48,268
Payments on capital leases and installment payment arrangements 6,914 12,948
Payments on software and data license liabilities - 337
Other debt payments, excluding line of credit 8,253 6,505
Prepayment of debt 215,000 -
Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

- 2,157
 
                             
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY
AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited)
(Dollars in thousands)
 
                                     
06/30/12   09/30/12   12/31/12   03/31/13   YTD FY2013 06/30/13   09/30/13   12/31/13   YTD FY2014 TTM 12/31/12   TTM 12/31/13
 
Net cash provided (used) by operating activities (1,867 ) 39,235 38,543 74,221 150,132 16,849 40,521 63,772 121,142 132,354 195,363
 
Less:
Disposition of operations - - - - - - - - - 73,468 -
Payments for investments - - - - - - - 3,633 3,633 - 3,633
Capitalized software (3,673 ) (4,074 ) (5,443 ) (6,689 ) (19,879 ) (5,954 ) (7,660 ) (5,495 ) (19,109 ) (15,285 ) (25,798 )
Capital expenditures (3,538 ) (8,178 ) (10,260 ) (16,515 ) (38,491 ) (8,920 ) (9,269 ) (6,700 ) (24,889 ) (34,420 ) (41,404 )
Data acquisition costs (2,302 ) (1,396 ) (2,766 ) (2,106 ) (8,570 ) (1,961 ) (913 ) (1,786 ) (4,660 ) (10,227 ) (6,766 )
Payments on capital leases and installment payment arrangements (4,562 ) (4,384 ) (4,002 ) (3,566 ) (16,514 ) (2,900 ) (2,339 ) (1,675 ) (6,914 ) (17,592 ) (10,480 )
Other required debt payments (2,294 )   (2,298 )   (2,250 )   (3,515 )   (10,357 ) (1,990 )   (2,004 )   (4,259 )   (8,253 ) (11,306 )   (11,768 )
 
Total (18,236 )   18,905     13,822     41,830     56,321   (4,876 )   18,336     47,490     60,950   116,992     102,780  
 
                             
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except earnings per share)
 
                                Q3 FY14 to Q3 FY13
06/30/12   09/30/12   12/31/12   03/31/13   YTD FY2013 06/30/13   09/30/13   12/31/13   YTD FY2014     %   $
Revenue:
Marketing and data services 192,482 198,602 195,146 202,510 788,740 187,793 200,952 206,662 595,407 5.9 % 11,516
IT Infrastructure management services 70,290 70,061 69,916 65,202 275,469 69,385 66,825 62,099 198,309 -11.2 % (7,817 )
Other services 8,887     8,804     8,040     9,419     35,150   9,015     8,494     9,112     26,621       13.3 %   1,072  
Total revenue 271,659 277,467 273,102 277,131 1,099,359 266,193 276,271 277,873 820,337 1.7 % 4,771
 
Operating costs and expenses:
Cost of revenue 209,311 209,164 208,848 213,317 840,640 204,506 207,394 210,053 621,953 0.6 % 1,205
Selling, general and administrative 36,764 38,063 37,482 41,681 153,990 37,615 42,859 43,383 123,857 15.7 % 5,901
Gains, losses and other items, net 160     32     (126 )   1,944     2,010   -     6,387     4,657     11,044       -3796.0 %   4,783  
 
Total operating costs and expenses 246,235 247,259 246,204 256,942 996,640 242,121 256,640 258,093 756,854 4.8 % 11,889
 
Income from operations 25,424 30,208 26,898 20,189 102,719 24,072 19,631 19,780 63,483 -26.5 % (7,118 )
% Margin 9.4 % 10.9 % 9.8 % 7.3 % 9.3 % 9.0 % 7.1 % 7.1 % 7.7 %
Other expense
Interest expense (3,240 ) (3,317 ) (3,178 ) (2,959 ) (12,694 ) (3,019 ) (2,980 ) (3,114 ) (9,113 ) -2.0 % 64
Other, net (547 )   (54 )   565     188     152   104     (350 )   1,484     1,238       162.7 %   919  
Total other expense (3,787 ) (3,371 ) (2,613 ) (2,771 ) (12,542 ) (2,915 ) (3,330 ) (1,630 ) (7,875 ) -37.6 % 983
 
Earnings before income taxes 21,637 26,837 24,285 17,418 90,177 21,157 16,301 18,150 55,608 -25.3 % (6,135 )
Income taxes 8,438     10,465     9,836     4,319     33,058   8,062     6,437     3,083     17,582       -68.7 %   (6,753 )
 
Net earnings 13,199     16,372     14,449     13,099     57,119   13,095     9,864     15,067     38,026       4.3 %   618  
 

Less: Net gain (loss) attributable to noncontrolling interest

(134 )   (139 )   (76 )   (139 )   (488 ) (85 )   25     -     (60 )     -100.0 %   76  
 
Net earnings attributable to Acxiom 13,333     16,511     14,525     13,238     57,607   13,180     9,839     15,067     38,086       3.7 %   542  
 

Diluted earnings per share - net earnings attributable to Acxiom stockholders

0.17     0.21     0.19     0.18     0.75   0.17     0.13     0.19     0.50       0.0 %   0.00  
 
 
ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
                           
                                Q3 FY14 to Q3 FY13
06/30/12   09/30/12   12/31/12   03/31/13   YTD FY2013 06/30/13   09/30/13   12/31/13   YTD FY2014 %   $
 
Revenue:
 
Marketing and data services 192,482 198,602 195,146 202,510 788,740 187,793 200,952 206,662 595,407 6 % 11,516
IT Infrastructure management services 70,290 70,061 69,916 65,202 275,469 69,385 66,825 62,099 198,309 -11 % (7,817 )
Other services 8,887     8,804     8,040     9,419     35,150   9,015     8,494     9,112     26,621   13 %   1,072  
 
Total revenue 271,659     277,467     273,102     277,131     1,099,359   266,193     276,271     277,873     820,337   2 %   4,771  
 
 
Marketing and data services 18,703 22,262 18,186 20,866 80,017 12,657 16,014 22,518 51,189 24 % 4,332
IT Infrastructure management services 8,831 8,520 9,622 2,357 29,330 10,761 11,967 6,316 29,044 -34 % (3,306 )
Other services (1,950 ) (542 ) (1,036 ) (1,090 ) (4,618 ) 654 223 500 1,377 -148 % 1,536
Corporate (160 )   (32 )   126     (1,944 )   (2,010 ) -     (8,573 )   (9,554 )   (18,127 ) -7683 %   (9,680 )
 
Total income from operations 25,424     30,208     26,898     20,189     102,719   24,072     19,631     19,780     63,483   -26 %   (7,118 )
 
Margin:
 
Marketing and data services 9.7 % 11.2 % 9.3 % 10.3 % 10.1 % 6.7 % 8.0 % 10.9 % 8.6 %
IT Infrastructure management services 12.6 % 12.2 % 13.8 % 3.6 % 10.6 % 15.5 % 17.9 % 10.2 % 14.6 %
Other services -21.9 % -6.2 % -12.9 % -11.6 % -13.1 % 7.3 % 2.6 % 5.5 % 5.2 %
 
Total 9.4 % 10.9 % 9.8 % 7.3 % 9.3 % 9.0 % 7.1 % 7.1 % 7.7 %

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