Acxiom Announces Fourth Quarter and Fiscal Year Results

Connectivity Revenue Exceeds $60 Million for the Year

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Acxiom® (Nasdaq: ACXM), an enterprise data, analytics and software-as-a-service company, today announced financial results for its fourth quarter and full year ended March 31, 2015.

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Fourth Quarter Financial Highlights

Total revenue was $257 million, down 4% compared to the fourth quarter of fiscal 2014 as a result of expected IT Infrastructure Management declines.

• Marketing and Data Services revenue was $206 million, down 2% compared to the fourth quarter of last year. Connectivity revenue, which is included in Marketing and Data Services, was $22 million, up $17 million or 367% compared to the same period a year ago.
• IT Infrastructure Management revenue was $52 million, down approximately 12% compared to the prior year period.

GAAP loss per share was lower as a result of unusual items associated with European restructuring activities in the prior year.

• Net loss per share from continuing operations was $0.08 compared to a net loss of $0.33 a year ago. Unusual items, non-cash compensation and intangible asset amortization impacted GAAP earnings per share by $0.32 in the quarter. Unusual items included expenses associated with the Company’s restructuring activities as well as separation and transformation initiatives.
• Operating cash flow from continuing operations was $34 million, down 15% compared to the same period a year ago. Free cash flow to equity was $4 million compared to $15 million for the prior year period.

Non-GAAP operating income and diluted earnings per share were down as a result of declines in International Marketing and Data Services.

• Non-GAAP diluted earnings per share were $0.24 compared to $0.26 a year ago. Earnings per share in the current period were positively impacted by a tax adjustment resulting in a $0.04 improvement.
• Non-GAAP operating income was $31 million, down from $35 million for the same period last year.

Fiscal Year 2015 Financial Highlights

Total revenue was $1,020 million, down 4% compared to $1,062 million in fiscal 2014 as a result of expected IT Infrastructure Management declines.

• Marketing and Data Services revenue was $805 million, roughly flat compared to the prior year. Connectivity revenue was $63 million, up $48 million or 326% compared to fiscal 2014.
• IT Infrastructure Management revenue was down year-over-year approximately 16%.

GAAP loss per share was down due to expenses associated with business separation and transformation activities, non-cash compensation and acquired intangible asset amortization, as well as declines in IT Infrastructure Management.

• Net loss per share from continuing operations was $0.12 compared to earnings per share of $0.14 a year ago. Unusual items, non-cash compensation and intangible asset amortization impacted GAAP earnings per share by $0.90 for the year. Unusual items included expenses associated with the Company’s restructuring activities as well as separation and transformation initiatives.
• Operating cash flow from continuing operations was $105 million, down 36% compared to the prior year. The decline was driven by changes in working capital, and to a lesser extent, lower earnings.
• Free cash flow to equity was negative $10 million compared to $76 million last year. The decline was primarily due to lower operating cash flow and higher capital expenditures.

Non-GAAP operating income and diluted earnings per share were down as a result of the declines in the IT Infrastructure Management business.

• Non-GAAP diluted earnings per share were $0.78 compared to $0.95 in the prior year. Earnings per share in both periods were positively impacted by a tax adjustment resulting in a $0.04 improvement.
• Non-GAAP operating income was $105 million, down from $126 million in fiscal 2014.

Non-GAAP results exclude unusual items, non-cash compensation and acquired intangible asset amortization. A reconciliation between GAAP and non-GAAP results is attached to this release.

“Connectivity’s strong performance in the fourth quarter capped off a year of explosive adoption and growth,” said Acxiom CEO Scott Howe. “Our focus in fiscal 2016 is on aggressively extending our early lead in onboarding and Connectivity, and returning our Marketing and Data Services business to a position of growth.”

Fourth Quarter Business Highlights

• The Company added 20 new Connectivity customers during the quarter including several major advertisers and marketing applications. Customers can now onboard and distribute data to a growing universe of over 140 leading publishers and marketing applications.
• Acxiom joined the newly renamed Facebook Marketing Partners Program. As part of this program, Acxiom’s audience data and onboarding capabilities are available to Facebook marketers globally.
• The Company expanded its global data partnership with Twitter during the quarter. Twitter’s behavior targeting and partner audiences program will leverage Acxiom’s third party data to power its advertising reach. Advertisers are now able to select from 135 Acxiom audience categories to define or find a group of users on Twitter.
• Acxiom appointed Rick Erwin as President and General Manager of Audience Solutions, a newly formed business unit comprised of the Company’s Data and Decision Sciences assets. With over two decades of marketing services experience, Erwin, a leading voice in the field of data-driven marketing, will be responsible for driving the strategy, growth and profitability of Acxiom’s industry-leading data and recognition products and services.
• Subsequent to quarter-end, Acxiom entered into a definitive agreement to sell its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners for total cash consideration of up to $190 million. The sale will allow the Company to focus more sharply on its Marketing and Data Services business.

Financial Outlook

The Company’s guidance excludes the IT Infrastructure Management business as it will be reported as a discontinued operation beginning in the first quarter of fiscal 2016. It also excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization. Acxiom’s estimates for fiscal 2016 are as follows:

• 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 www.acxiom.com. A slide presentation will be referenced during the call and can be accessed here.

About Acxiom

Acxiom is an enterprise data, analytics and software-as-a-service company that uniquely fuses trust, experience and scale to fuel data-driven results. For over 40 years, Acxiom has been an innovator in harnessing the most important sources and uses of data to strengthen connections between people, businesses and their partners. Utilizing a channel and media neutral approach, we leverage cutting-edge, data-oriented products and services to maximize customer value. Every week, Acxiom powers more than a trillion transactions that enable better living for people and better results for our 7,000+ global clients. For more information about Acxiom, visit Acxiom.com.

Forward-Looking Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share, the impact of a sale of ITO. 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 ITO transaction might not close, or close within the anticipated time frame, due to a failure of one or more closing conditions; 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, 2014, which was filed with the Securities and Exchange Commission on May 28, 2014.

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.

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