LiveRamp Holdings, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 PRESS RELEASE AND FINANCIALS - May 16, 2017

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ACXIOM ANNOUNCES FOURTH QUARTER AND FISCAL YEAR RESULTS

Full Year Connectivity Revenue Increases 44% Year-Over-Year

Company Expects Strong Revenue Growth in FY18

CONWAY, Ark., May 16, 2017—Acxiom® (Nasdaq: ACXM), the data foundation for the world's best marketers, today announced financial results for its fourth quarter and fiscal year ended March 31, 2017.

Fourth Quarter Financial Highlights

·
Revenue: Total revenue was $225 million or flat compared to the fourth quarter of last year. Strong growth in Connectivity and Audience Solutions was offset by revenue declines associated with the second quarter divestiture of Acxiom Impact.
·
Operating Income (Loss): GAAP operating loss from continuing operations was $9 million compared to a loss of $8 million in the prior year. Non-GAAP operating income from continuing operations improved 5% to approximately $21 million.
·
Earnings (Loss) per Share: GAAP diluted loss per share from continuing operations was $0.10 compared to a loss per share of $0.02 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.15 compared to $0.18 a year ago.
·
Operating Cash Flow: Operating cash flow from continuing operations was $31 million, down from $43 million in the prior year.
·
Free Cash Flow to Equity: Free cash flow to equity improved to $26 million, up from $17 million in the prior year driven by proceeds from the sale of real estate assets.

Fiscal Year Financial Highlights

·
Revenue: Total revenue was $880 million, up 4% compared to fiscal 2016 driven by growth in Connectivity and Audience Solutions, partially offset by the divestiture of Acxiom Impact.
·
Operating Income (Loss): GAAP operating income from continuing operations was $16 million compared to a loss of $13 million in the prior year. Non-GAAP operating income from continuing operations improved 33% to approximately $100 million.
·
Earnings (Loss) per Share: GAAP diluted earnings per share from continuing operations were $0.05 compared to a loss per share of $0.11 in the prior year. Non-GAAP diluted earnings per share from continuing operations were $0.71 compared to $0.59 a year ago.
·
Operating Cash Flow: Operating cash flow from continuing operations improved to $116 million, up from $114 million in the prior year.
·
Free Cash Flow to Equity: Free cash flow to equity improved to $63 million, up from $18 million in the prior year driven by proceeds from the sale of Acxiom Impact and the fourth quarter sale of real estate assets.


1
Segment Results
$M
Connectivity
Q417
Q416
Y/Y Δ
  
FY17
FY16
Y/Y Δ
Revenue
$ 44
$ 31
42%
  
$ 147
$ 102
44%
Gross Profit
$ 28
$ 20
41%
  
$ 88
$ 61
44%
   Gross Margin
63%
63%
(10 bps)
  
60%
60%
20 bps
Segment Operating Income
$ 2
$ (0)
454%
  
$ 5
$ (3)
262%
   Segment Margin
3%
(1%)
480 bps
  
4%
(3%)
680 bps
               
Audience Solutions
Q417
Q416
Y/Y Δ
  
FY17
FY16
Y/Y Δ
Revenue
$ 86
$ 80
8%
  
$ 322
$ 298
8%
Gross Profit
$ 55
$ 46
19%
  
$ 198
$ 168
18%
   Gross Margin
64%
58%
580 bps
  
62%
56%
520 bps
Segment Operating Income
$ 34
$ 30
14%
  
$ 123
$ 110
12%
   Segment Margin
39%
37%
200 bps
  
38%
37%
150 bps
               
Marketing Services
Q417
Q416
Y/Y Δ
  
FY17
FY16
Y/Y Δ
Revenue
$ 94
$ 113
(17%)
  
$ 411
$ 450
(9%)
Gross Profit
$ 31
$ 40
(22%)
  
$ 141
$ 152
(8%)
   Gross Margin
33%
35%
(230 bps)
  
34%
34%
30 bps
Segment Operating Income
$ 20
$ 19
1%
  
$ 81
$ 74
8%
   Segment Margin
21%
17%
370 bps
  
20%
17%
310 bps

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.

"Fiscal 2017 was a milestone year for Acxiom," said Acxiom CEO Scott Howe. "Each of our businesses delivered revenue growth and margin improvement, and we made a number of strategic moves to accelerate our vision of powering a world where all marketing is relevant. We enter fiscal 2018 from a position of strength and industry leadership and remain committed to delivering even more value to our clients and shareholders."

Recent Business Highlights

·
LiveRamp® product revenue was up 59% compared to the fourth quarter of last year. LiveRamp added approximately 25 new direct clients 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 500 publishers and marketing technology providers.

·
LiveRamp launched IdentityLink™ for data owners allowing data providers to better monetize their assets. Data can be distributed directly to clients or made available through IdentityLink's Data Store feature.

·
LiveRamp and AppNexus launched an open industry consortium to make people-based marketing widely available in programmatic channels. In forming the consortium, LiveRamp and leading supply side platform AppNexus have agreed to create a standard identity framework that enables buyers and sellers of programmatic digital advertising to create more relevant campaigns and improve the consumer experience.

2
·
Audience Solutions announced several new and expanded partnerships, including a new DaaS partnership with ShareThis and a deeper integration with the Viant Advertising Cloud platform.

·
Acxiom was named to the 2017 Bay Area Best Places to Work list, ranking among the top large companies. The awards program, presented by the San Francisco Business Times and the Silicon Valley Business Journal, annually recognizes Bay Area companies that rise to the top in terms of having a happy and engaged workforce.

Financial Outlook

Acxiom's non-GAAP guidance excludes the impact of non-cash compensation, purchased intangible asset amortization, restructuring charges and separation costs.

For fiscal 2018, Acxiom expects to report:

·
Revenue of approximately $945 million, an increase of 7% year-over-year. This represents an increase of 10% year-over-year after adjusting for the Acxiom Impact divestiture.

·
GAAP diluted loss per share of approximately $0.09

·
Non-GAAP diluted earnings per share of approximately $0.80, an increase of 13% year-over-year

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 and can be found on our investor site. A slide presentation will be referenced during the call and can be accessed here.

About Acxiom

Acxiom provides the data foundation for the world's best marketers. We enable people-based marketing everywhere through a simple, open approach to connecting systems and data that drives seamless customer experiences and higher ROI. A leader in identity and ethical data use for more than 45 years, Acxiom helps thousands of clients and partners around the globe work together to create a world where all marketing is relevant. Acxiom is a registered trademark of Acxiom Corporation. For more information, visit Acxiom.com.

Forward-Looking Statements

This release and today's conference call contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that the expected revenue from the divisions may not be realized within the expected timeframe; the possibility that the integration of acquired businesses may not be successful as planned; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data purchasers will reduce their reliance on us by developing and using their own, or alternative, sources of data generally or with respect to certain data elements or categories; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and the possibility that other risks and uncertainties may emerge, including those detailed from time to time in our current and periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption "Item 1A. RISK FACTORS" in our Annual Report on Form 10-K for the year ended March 31, 2016, which was filed with the Securities and Exchange Commission on May 27, 2016.

3
With respect to the provision of products or services outside our primary base of operations in the United States, all of the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

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

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


For more information, contact:
Lauren Dillard
Acxiom Investor Relations
(650) 372-2242
investor.relations@acxiom.com
EACXM

4
 
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
(Dollars in thousands, except per share amounts)
          
 
                   
 
  
For the Three Months Ended   
March 31,
  
 
  
 
                    
 
                $    
 
%
  
 
  
2017
    
2016
    
Variance
    
Variance
  
 
                          
Revenues
    
224,867
      
224,655
      
212
      
0.1
%
 
                                
Cost of revenue
    
118,294
      
123,626
      
(5,332
)
    
(4.3
%)
     Gross profit
    
106,573
      
101,029
      
5,544
      
5.5
%
     % Gross margin
    
47.4
%
    
45.0
%
                
 
                                
Operating expenses:
                                
    Research and development
    
23,478
      
16,758
      
6,720
      
40.1
%
    Sales and marketing
    
48,433
      
45,842
      
2,591
      
5.7
%
    General and administrative
    
37,721
      
35,330
      
2,391
      
6.8
%
    Impairment of goodwill and other
    
1,315
      
6,100
      
(4,785
)
    
(78.4
%)
    Gains, losses and other items, net
    
4,335
      
4,763
      
(428
)
    
(9.0
%)
Total operating expenses
    
115,282
      
108,793
      
6,489
      
6.0
%
 
                                
    Loss from operations
    
(8,709
)
    
(7,764
)
    
(945
)
    
(12.2
%)
     % Margin
    
-3.9
%
    
-3.5
%
                
   Other income (expense):
                                
     Interest expense
    
(2,137
)
    
(1,880
)
    
(257
)
    
(13.6
%)
     Other, net
    
199
      
(214
)
    
413
      
193.0
%
   Total other expense
    
(1,937
)
    
(2,094
)
    
157
      
7.5
%
 
                                
   Loss from continuing operations before income taxes
    
(10,646
)
    
(9,858
)
    
(788
)
    
(8.0
%)
 
                                
   Income taxes
    
(2,565
)
    
(8,176
)
    
5,611
      
68.6
%
 
                                
   Net loss from continuing operations
    
(8,081
)
    
(1,682
)
    
(6,399
)
    
(380.5
%)
 
                                
  Earnings from discontinued operations, net of tax
    
-
      
111
      
(111
)
    
(100.0
%)
 
                                
    Net loss
    
(8,081
)
    
(1,571
)
    
(6,510
)
    
(414.4
%)
 
                                
Basic loss per share:
                                
   Net loss from continuing operations
    
(0.10
)
    
(0.02
)
    
(0.08
)
    
(372.7
%)
   Net earnings from discontinued operations
    
-
      
0.00
      
(0.00
)
    
(100.0
%)
      Net loss
    
(0.10
)
    
(0.02
)
    
(0.08
)
    
(406.1
%)
 
                                
Diluted loss per share:
                                
   Net loss from continuing operations
    
(0.10
)
    
(0.02
)
    
(0.08
)
    
(372.7
%)
   Net earnings from discontinued operations
    
-
      
0.00
      
(0.00
)
    
(100.0
%)
      Net loss
    
(0.10
)
    
(0.02
)
    
(0.08
)
    
(406.1
%)
 
                                
Basic weighted average shares
    
78,012
      
76,753
                  
 
                                
Diluted weighted average shares
    
78,012
      
76,753
                  
 
                                
 
5
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except per share amounts)
  
                         
                         
   
For the Twelve Months Ended
  
   
March 31,
  
                 $    
 
%
  
   
2017
    
2016
    
Variance
    
Variance
  
                           
Revenues
    
880,247
      
850,088
      
30,159
      
3.5
%
                                 
Cost of revenue
    
477,686
      
488,382
      
(10,696
)
    
(2.2
%)
     Gross profit
    
402,561
      
361,706
      
40,855
      
11.3
%
     % Gross margin
    
45.7
%
    
42.5
%
                
                                 
Operating expenses:
                                
    Research and development
    
82,109
      
74,247
      
7,862
      
10.6
%
    Sales and marketing
    
166,676
      
146,176
      
20,500
      
14.0
%
    General and administrative
    
129,714
      
135,385
      
(5,671
)
    
(4.2
%)
    Impairment of goodwill and other
    
1,315
      
6,829
      
(5,514
)
    
(80.7
%)
    Gains, losses and other items, net
    
7,058
      
12,132
      
(5,074
)
    
(41.8
%)
Total operating expenses
    
386,872
      
374,769
      
12,103
      
3.2
%
                                 
    Income (loss) from operations
    
15,689
      
(13,063
)
    
28,752
      
220.1
%
     % Margin
    
1.8
%
    
-1.5
%
                
   Other income (expense):
                                
     Interest expense
    
(7,381
)
    
(7,669
)
    
288
      
3.8
%
     Other, net
    
334
      
452
      
(118
)
    
(26.1
%)
   Total other expense
    
(7,047
)
    
(7,217
)
    
170
      
2.4
%
                                 
   Income (loss) from continuing operations before income taxes
    
8,642
      
(20,280
)
    
28,922
      
142.6
%
                                 
   Income taxes (benefit)
    
4,534
      
(11,632
)
    
16,166
      
139.0
%
                                 
   Net earnings (loss) from continuing operations
    
4,108
      
(8,648
)
    
12,756
      
147.5
%
                                 
   Earnings from discontinued operations, net of tax
    
-
      
15,351
      
(15,351
)
    
(100.0
%)
                                 
    Net earnings
    
4,108
      
6,703
      
(2,595
)
    
(38.7
%)
                                 
Basic earnings per share:
                                
   Net earnings (loss) from continuing operations
    
0.05
      
(0.11
)
    
0.16
      
147.5
%
   Net earnings from discontinued operations
    
-
      
0.20
      
(0.20
)
    
(100.0
%)
      Net earnings
    
0.05
      
0.09
      
(0.03
)
    
(38.7
%)
                                 
Diluted earnings per share:
                                
   Net earnings (loss) from continuing operations
    
0.05
      
(0.11
)
    
0.16
      
146.2
%
   Net earnings from discontinued operations
    
-
      
0.20
      
(0.20
)
    
(100.0
%)
      Net earnings
    
0.05
      
0.09
      
(0.03
)
    
(40.4
%)
                                 
Basic weighted average shares
    
77,609
      
77,616
                  
                                 
Diluted weighted average shares
    
79,848
      
77,616
                  
                                 

6
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
  
(Unaudited)
  
(Dollars in thousands, except per share amounts)
  
                         
   
For the Three Months Ended
    
For the Twelve Months Ended
  
   
March 31,
    
March 31,
  
   
2017
    
2016
    
2017
    
2016
  
                         
                         
   Earnings (loss) from continuing operations before income taxes
    
(10,646
)
    
(9,858
)
    
8,642
      
(20,280
)
                                 
   Income taxes
    
(2,565
)
    
(8,176
)
    
4,534
      
(11,632
)
                                 
   Net earnings (loss) from continuing operations
    
(8,081
)
    
(1,682
)
    
4,108
      
(8,648
)
                                 
   Earnings from discontinued operations, net of tax
    
-
      
111
      
-
      
15,351
  
                                 
   Net earnings (loss)
    
(8,081
)
    
(1,571
)
    
4,108
      
6,703
  
                                 
Earnings (loss) per share:
                                
                                 
    Basic
    
(0.10
)
    
(0.02
)
    
0.05
      
0.09
  
                                 
    Diluted
    
(0.10
)
    
(0.02
)
    
0.05
      
0.09
  
                                 
Excluded items:
                                
  Purchased intangible asset amortization  (cost of revenue)
    
6,056
      
4,204
      
18,644
      
15,466
  
  Non-cash stock compensation (cost of revenue and operating expenses)
    
15,190
      
7,934
      
49,145
      
31,463
  
  Impairment of goodwill and other
    
1,315
      
6,100
      
1,315
      
6,829
  
  Restructuring and merger charges (gains, losses, and other)
    
7,321
      
4,763
      
10,045
      
12,132
  
  Gain on sales of assets (gains, losses, and other)
    
(2,986
)
    
-
      
(2,986
)
    
-
  
  Separation and transformation costs (general and administrative)
    
3,066
      
4,686
      
8,639
      
20,826
  
  Accelerated amortization (cost of revenue)
    
-
      
252
      
-
      
1,850
  
                                 
 Total excluded items, continuing operations
    
29,962
      
27,939
      
84,802
      
88,566
  
                                 
   Earnings from continuing operations before income taxes
                                
     and excluding items
    
19,316
      
18,081
      
93,444
      
68,286
  
                                 
   Income taxes (2)
    
7,139
      
4,262
      
36,652
      
21,456
  
                                 
   Non-GAAP net earnings
    
12,177
      
13,819
      
56,792
      
46,830
  
                                 
Non-GAAP earnings per share:
                                
                                 
    Basic
    
0.16
      
0.18
      
0.73
      
0.60
  
                                 
    Diluted
    
0.15
      
0.18
      
0.71
      
0.59
  
                                 
Basic weighted average shares
    
78,012
      
76,753
      
77,609
      
77,616
  
                                 
Diluted weighted average shares
    
80,912
      
78,386
      
79,848
      
79,099
  
                                 
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures,
  
and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the
  
adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures,
  
please see Appendix A.
                                
                                 
(2) Income taxes were calculated using an effective non-GAAP tax rate of 37.0% and 23.6% in the fourth quarter of fiscal 2017 and 2016, respectively, and 39.2% and 31.4%
  
for the twelve months ended March 31, 2017 and 2016, respectively. The differences between our GAAP and non-GAAP tax rates were primarily due to the net tax effects
  
of the excluded items, including the federal and state income tax benefit related to the sale of Impact.
                          
                                 
                                 

7
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
For the Three Months Ended
    
For the Twelve Months Ended
  
   
March 31,
    
March 31,
  
   
2017
    
2016
    
2017
    
2016
  
                         
                         
   Income (loss) from operations
    
(8,709
)
    
(7,764
)
    
15,689
      
(13,063
)
                                 
Excluded items:
                                
  Purchased intangible asset amortization  (cost of revenue)
    
6,056
      
4,204
      
18,644
      
15,466
  
  Non-cash stock compensation (cost of revenue and operating expenses)
    
15,190
      
7,934
      
49,145
      
31,463
  
  Impairment of goodwill and other
    
1,315
      
6,100
      
1,315
      
6,829
  
  Restructuring and merger charges (gains, losses, and other)
    
7,321
      
4,763
      
10,045
      
12,132
  
  Gain on sales of assets (gains, losses and other)
    
(2,986
)
    
-
      
(2,986
)
    
-
  
  Separation and transformation costs (general and administrative)
    
3,066
      
4,686
      
8,639
      
20,826
  
  Accelerated amortization (cost of revenue)
    
-
      
252
      
-
      
1,850
  
                                 
 Total excluded items, continuing operations
    
29,962
      
27,939
      
84,802
      
88,566
  
                                 
   Income from operations before excluded items
    
21,253
      
20,175
      
100,491
      
75,503
  
                                 
                                 
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures,
  
and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the
  
adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures,
  
please see Appendix A.
                                
                                 

8
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
                         
                         
   
For the Three Months Ended
  
   
March 31,
  
                 $    
 
%
  
   
2017
    
2016
    
Variance
    
Variance
  
                           
Revenues
                          
Marketing Services
    
94,269
      
113,342
      
(19,073
)
    
(16.8
%)
Audience Solutions
    
86,396
      
80,128
      
6,268
      
7.8
%
Connectivity
    
44,203
      
31,185
      
13,018
      
41.7
%
Total operating segment revenues
    
224,867
      
224,655
      
212
      
0.1
%
                                 
Gross profit
                                
Marketing Services
    
31,207
      
40,117
      
(8,910
)
    
(22.2
%)
Audience Solutions
    
55,154
      
46,457
      
8,697
      
18.7
%
Connectivity
    
27,742
      
19,617
      
8,125
      
41.4
%
Total operating segment gross profit
    
114,104
      
106,191
      
7,913
      
7.5
%
                                 
Gross margin %
                                
Marketing Services
    
33.1
%
    
35.4
%
                
Audience Solutions
    
63.8
%
    
58.0
%
                
Connectivity
    
62.8
%
    
62.9
%
                
Total operating segment gross margin
    
50.7
%
    
47.3
%
                
                                 
Income (loss) from operations
                                
Marketing Services
    
19,513
      
19,301
      
212
      
1.1
%
Audience Solutions
    
33,598
      
29,598
      
4,000
      
13.5
%
Connectivity
    
1,502
      
(424
)
    
1,926
      
454.3
%
Total operating segment income from operations
    
54,613
      
48,475
      
6,138
      
12.7
%
                                 
Operating income (loss) margin %
                                
Marketing Services
    
20.7
%
    
17.0
%
                
Audience Solutions
    
38.9
%
    
36.9
%
                
Connectivity
    
3.4
%
    
-1.4
%
                
Total operating segment operating margin
    
24.3
%
    
21.6
%
                
                                 
                                 
Some totals may not add due to rounding
                                

9
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
                         
                         
   
For the Twelve Months Ended
  
   
March 31,
  
                 $    
 
%
  
   
2017
    
2016
    
Variance
    
Variance
  
                           
Revenues
                          
Marketing Services
    
410,840
      
449,772
      
(38,932
)
    
(8.7
%)
Audience Solutions
    
322,065
      
297,846
      
24,219
      
8.1
%
Connectivity
    
147,342
      
102,470
      
44,872
      
43.8
%
Total operating segment revenues
    
880,247
      
850,088
      
30,159
      
3.5
%
                                 
Gross profit
                                
Marketing Services
    
140,647
      
152,258
      
(11,611
)
    
(7.6
%)
Audience Solutions
    
198,185
      
167,715
      
30,470
      
18.2
%
Connectivity
    
88,251
      
61,199
      
27,052
      
44.2
%
Total operating segment gross profit
    
427,084
      
381,172
      
45,912
      
12.0
%
                                 
Gross margin %
                                
Marketing Services
    
34.2
%
    
33.9
%
                
Audience Solutions
    
61.5
%
    
56.3
%
                
Connectivity
    
59.9
%
    
59.7
%
                
Total operating segment gross margin
    
48.5
%
    
44.8
%
                
                                 
Income (loss) from operations
                                
Marketing Services
    
80,622
      
74,371
      
6,251
      
8.4
%
Audience Solutions
    
123,238
      
109,598
      
13,640
      
12.4
%
Connectivity
    
5,333
      
(3,298
)
    
8,631
      
261.7
%
Total operating segment income from operations
    
209,193
      
180,671
      
28,522
      
15.8
%
                                 
Operating income (loss) margin %
                                
Marketing Services
    
19.6
%
    
16.5
%
                
Audience Solutions
    
38.3
%
    
36.8
%
                
Connectivity
    
3.6
%
    
-3.2
%
                
Total operating segment operating margin
    
23.8
%
    
21.3
%
                
                                 
                                 
Some totals may not add due to rounding
                                
                                 

10
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF SEGMENT RESULTS
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
For the Three Months Ended
    
For the Twelve Months Ended
  
   
March 31,
    
March 31,
  
                         
   
2017
    
2016
    
2017
    
2016
  
                         
Total operating segment gross profit
    
114,104
      
106,191
      
427,084
      
381,172
  
                                 
Less:
                                
  Purchased intangible asset amortization
    
6,056
      
4,204
      
18,644
      
15,466
  
  Non-cash stock compensation
    
1,475
      
707
      
5,879
      
2,150
  
  Accelerated amortization
    
-
      
252
      
-
      
1,850
  
                                 
Gross profit
    
106,573
      
101,029
      
402,561
      
361,706
  
                                 
                                 
Total operating segment income from operations
    
54,613
      
48,475
      
209,193
      
180,671
  
                                 
Less:
                                
  Corporate expenses
    
33,360
      
28,300
      
108,702
      
105,168
  
  Purchased intangible asset amortization
    
6,056
      
4,204
      
18,644
      
15,466
  
  Non-cash stock compensation
    
15,190
      
7,934
      
49,145
      
31,463
  
  Impairment of goodwill and other
    
1,315
      
6,100
      
1,315
      
6,829
  
  Restructuring and merger charges
    
7,321
      
4,763
      
10,045
      
12,132
  
  Gain on sales of assets
    
(2,986
)
    
-
      
(2,986
)
    
-
  
  Separation and transformation costs
    
3,066
      
4,686
      
8,639
      
20,826
  
  Accelerated amortization
    
-
      
252
      
-
      
1,850
  
                                 
Income (loss) from operations
    
(8,709
)
    
(7,764
)
    
15,689
      
(13,063
)
                                 
                                 
Some totals may not add due to rounding
                                
                                 

11
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF ADJUSTED EBITDA (1)
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
For the Three Months Ended
    
For the Twelve Months Ended
  
   
March 31,
    
March 31,
  
   
2017
    
2016
    
2017
    
2016
  
                         
                         
   Net earnings (loss) from continuing operations
    
(8,081
)
    
(1,682
)
    
4,108
      
(8,648
)
                                 
   Income taxes
    
(2,565
)
    
(8,176
)
    
4,534
      
(11,632
)
                                 
   Other expense
    
(1,937
)
    
(2,094
)
    
(7,047
)
    
(7,217
)
                                 
   Income (loss) from operations
    
(8,709
)
    
(7,764
)
    
15,689
      
(13,063
)
                                 
Depreciation and amortization
    
21,593
      
22,242
      
82,690
      
85,463
  
Less:
                                
  Deferred interest amortization
    
-
      
306
      
-
      
1,206
  
Adjusted depreciation and amortization
    
21,593
      
21,936
      
82,690
      
84,257
  
                                 
EBITDA
    
12,884
      
14,172
      
98,379
      
71,194
  
                                 
                                 
Other adjustments:
                                
  Non-cash stock compensation (cost of revenue and operating expenses)
    
15,190
      
7,934
      
49,145
      
31,463
  
  Impairment of goodwill and other
    
1,315
      
6,100
      
1,315
      
6,829
  
  Gains, losses, and other items, net
    
4,335
      
4,763
      
7,059
      
12,132
  
  Separation and transformation costs (general and administrative)
    
3,066
      
4,686
      
8,639
      
20,826
  
                                 
 Other adjustments
    
23,906
      
23,483
      
66,158
      
71,250
  
                                 
Adjusted EBITDA
    
36,790
      
37,655
      
164,537
      
142,444
  
                                 
(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.
                                
                                 
                                 

12
                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED BALANCE SHEETS
  
(Unaudited)
  
(Dollars in thousands)
  
                         
   
March 31,
    
March 31,
      $    
 
%
  
   
2017
    
2016
    
Variance
    
Variance
  
Assets
                          
Current assets:
                          
  Cash and cash equivalents
    
170,343
      
189,629
      
(19,286
)
    
(10.2
%)
  Trade accounts receivable, net
    
142,768
      
138,650
      
4,118
      
3.0
%
  Refundable income taxes
    
7,098
      
9,834
      
(2,736
)
    
(27.8
%)
  Other current assets
    
48,310
      
37,897
      
10,413
      
27.5
%
                                 
     Total current assets
    
368,519
      
376,010
      
(7,491
)
    
(2.0
%)
                                 
Property and equipment
    
476,281
      
528,675
      
(52,394
)
    
(9.9
%)
  Less - accumulated depreciation and amortization
    
320,307
      
345,632
      
(25,325
)
    
(7.3
%)
                                 
Property and equipment, net
    
155,974
      
183,043
      
(27,069
)
    
(14.8
%)
                                 
Software, net of accumulated amortization
    
47,638
      
55,735
      
(8,097
)
    
(14.5
%)
Goodwill
    
592,731
      
492,745
      
99,986
      
20.3
%
Purchased software licenses, net of accumulated amortization
    
7,972
      
10,116
      
(2,144
)
    
(21.2
%)
Deferred income taxes
    
10,261
      
6,885
      
3,376
      
49.0
%
Other assets, net
    
51,443
      
25,315
      
26,128
      
103.2
%
                                 
     
1,234,538
      
1,149,849
      
84,689
      
7.4
%
                                 
Liabilities and Stockholders' Equity
                                
Current liabilities:
                                
  Current installments of long-term debt
    
39,819
      
32,243
      
7,576
      
23.5
%
  Trade accounts payable
    
40,208
      
37,717
      
2,491
      
6.6
%
  Accrued payroll and related expenses
    
53,238
      
61,309
      
(8,071
)
    
(13.2
%)
  Other accrued expenses
    
59,861
      
48,254
      
11,607
      
24.1
%
  Deferred revenue
    
37,087
      
44,477
      
(7,390
)
    
(16.6
%)
                                 
   Total current liabilities
    
230,213
      
224,000
      
6,213
      
2.8
%
                                 
Long-term debt
    
189,241
      
157,897
      
31,344
      
19.9
%
                                 
Deferred income taxes
    
58,374
      
53,964
      
4,410
      
8.2
%
                                 
Other liabilities
    
17,730
      
15,020
      
2,710
      
18.0
%
                                 
  Stockholders' equity:
                                
  Common stock
    
13,288
      
13,039
      
249
      
1.9
%
  Additional paid-in capital
    
1,154,429
      
1,082,220
      
72,209
      
6.7
%
  Retained earnings
    
602,609
      
598,501
      
4,108
      
0.7
%
  Accumulated other comprehensive income
    
7,999
      
8,590
      
(591
)
    
(6.9
%)
  Treasury stock, at cost
    
(1,039,345
)
    
(1,003,382
)
    
(35,963
)
    
(3.6
%)
Total stockholders' equity
    
738,980
      
698,968
      
40,012
      
5.7
%
                                 
     
1,234,538
      
1,149,849
      
84,689
      
7.4
%
                                 
                                 
                                 
 
 
13
             
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Unaudited)
  
(Dollars in thousands)
  
             
   
For the Three Months Ended
  
             
   
March 31,
  
             
   
2017
    
2016
  
             
Cash flows from operating activities:
            
  Net loss
    
(8,081
)
    
(1,571
)
  Earnings from discontinued operations, net of tax
    
-
      
(111
)
  Non-cash operating activities:
                
    Depreciation and amortization
    
21,593
      
22,242
  
    Loss on disposal of assets
    
2,245
      
-
  
    Impairment of goodwill and other assets
    
1,315
      
6,100
  
    Deferred income taxes
    
(6,836
)
    
(4,266
)
    Non-cash stock compensation expense
    
15,201
      
7,934
  
    Changes in operating assets and liabilities:
                
      Accounts receivable
    
(5,000
)
    
2,224
  
      Other assets
    
(8,825
)
    
(13,531
)
      Accounts payable and other liabilities
    
16,110
      
22,370
  
      Deferred revenue
    
2,943
      
1,879
  
      Net cash provided by operating activities
    
30,665
      
43,270
  
Cash flows from investing activities:
                
    Capitalized software
    
(3,306
)
    
(4,520
)
    Capital expenditures
    
(17,897
)
    
(13,601
)
    Data acquisition costs
    
(418
)
    
(418
)
    Proceeds from sales of assets
    
25,494
      
-
  
    Equity investments
    
(1,000
)
    
-
  
      Net cash provided by (used in) investing activities
    
2,873
      
(18,539
)
Cash flows from financing activities:
                
    Payments of debt
    
(8,070
)
    
(8,048
)
    Sale of common stock, net of stock acquired for withholding taxes
    
6,039
      
4,074
  
    Excess tax benefits from share-based compensation
    
1,067
      
1,529
  
    Acquisition of treasury stock
    
-
      
(15,229
)
      Net cash used in financing activities
    
(964
)
    
(17,674
)
Cash flows from discontinued operations:
                
    From operating activities
    
-
      
(3,954
)
      Net cash provided by discontinued operations
    
-
      
(3,954
)
      Effect of exchange rate changes on cash
    
(81
)
    
136
  
                 
  Net change in cash and cash equivalents
    
32,493
      
3,239
  
  Cash and cash equivalents at beginning of period
    
137,850
      
186,390
  
  Cash and cash equivalents at end of period
    
170,343
      
189,629
  
                 
   Supplemental cash flow information:
                
    Cash paid during the period for:
                
      Interest
    
2,478
      
1,925
  
      Income taxes
    
2,070
      
96
  
                 
                 

14
             
ACXIOM CORPORATION AND SUBSIDIARIES
            
CONSOLIDATED STATEMENTS OF CASH FLOWS
            
(Unaudited)
            
(Dollars in thousands)
            
             
   
For the Twelve Months Ended
  
             
   
March 31,
  
             
   
2017
    
2016
  
             
Cash flows from operating activities:
            
  Net earnings
    
4,108
      
6,703
  
  Earnings from discontinued operations, net of tax
    
-
      
(15,351
)
  Non-cash operating activities:
                
    Depreciation and amortization
    
82,690
      
85,463
  
    Loss on disposal of assets
    
1,725
      
232
  
    Impairment of goodwill and other assets
    
1,315
      
6,829
  
    Deferred income taxes
    
(8,818
)
    
(11,664
)
    Non-cash stock compensation expense
    
49,145
      
31,463
  
    Changes in operating assets and liabilities:
                
      Accounts receivable
    
(11,161
)
    
(13,014
)
      Other assets
    
(172
)
    
(13,632
)
      Accounts payable and other liabilities
    
4,302
      
25,529
  
      Deferred revenue
    
(7,304
)
    
11,084
  
      Net cash provided by operating activities
    
115,830
      
113,642
  
Cash flows from investing activities:
                
    Capitalized software
    
(14,477
)
    
(14,880
)
    Capital expenditures
    
(47,993
)
    
(47,423
)
    Data acquisition costs
    
(881
)
    
(1,553
)
    Proceeds from sales of assets
    
25,494
      
-
  
    Equity investments
    
(1,000
)
    
-
  
    Cash paid in acquisitions, net of cash acquired
    
(137,383
)
    
(5,386
)
    Net cash received in disposition
    
16,988
      
-
  
      Net cash used in investing activities
    
(159,252
)
    
(69,242
)
Cash flows from financing activities:
                
    Proceeds from debt
    
70,000
      
-
  
    Payments of debt
    
(32,243
)
    
(87,231
)
    Sale of common stock, net of stock acquired for withholding taxes
    
15,709
      
10,417
  
    Excess tax benefits from share-based compensation
    
2,852
      
3,551
  
    Acquisition of treasury stock
    
(30,542
)
    
(52,764
)
      Net cash provided by (used in) financing activities
    
25,776
      
(126,027
)
Cash flows from discontinued operations:
                
    From operating activities
    
-
      
6,323
  
    From investing activities
    
-
      
124,506
  
    From financing activities
    
-
      
(206
)
      Net cash provided by discontinued operations
    
-
      
130,623
  
      Effect of exchange rate changes on cash
    
(1,640
)
    
(377
)
                 
  Net change in cash and cash equivalents
    
(19,286
)
    
48,619
  
  Cash and cash equivalents at beginning of period
    
189,629
      
141,010
  
  Cash and cash equivalents at end of period
    
170,343
      
189,629
  
                 
   Supplemental cash flow information:
                
    Cash paid during the period for:
                
      Interest
    
7,779
      
8,145
  
      Income taxes
    
6,866
      
6,100
  
      Prepayment of debt
    
-
      
55,000
  
      Other debt payments
    
32,243
      
32,231
  
                 
                 
                 
 
 
15
                                                             
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
    
09/30/16
    
12/31/16
    
03/31/17
    
FY2017
  
                                                             
Net Cash Provided by Operating Activities
    
11,997
      
21,357
      
37,018
      
43,270
      
113,642
      
750
      
35,482
      
48,933
      
30,665
      
115,830
  
                                                                                 
Less (plus):
                                                                                
    Capitalized software
    
(2,797
)
    
(3,936
)
    
(3,627
)
    
(4,520
)
    
(14,880
)
    
(3,982
)
    
(3,893
)
    
(3,296
)
    
(3,306
)
    
(14,477
)
    Capital expenditures
    
(12,876
)
    
(10,244
)
    
(10,702
)
    
(13,601
)
    
(47,423
)
    
(10,694
)
    
(9,845
)
    
(9,557
)
    
(17,897
)
    
(47,993
)
    Data acquisition costs
    
(430
)
    
(281
)
    
(424
)
    
(418
)
    
(1,553
)
    
(20
)
    
(247
)
    
(196
)
    
(418
)
    
(881
)
    Required debt payments
    
(8,099
)
    
(8,039
)
    
(8,045
)
    
(8,048
)
    
(32,231
)
    
(8,053
)
    
(8,058
)
    
(8,062
)
    
(8,070
)
    
(32,243
)
    Net cash received in disposition
    
-
      
-
      
-
      
-
      
-
      
-
      
16,988
      
-
      
-
      
16,988
  
    Proceeds from sales of assets
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
25,494
      
25,494
  
                                                                                 
Free Cash Flow to Equity
    
(12,205
)
    
(1,143
)
    
14,220
      
16,683
      
17,555
      
(21,999
)
    
30,427
      
27,822
      
26,468
      
62,718
  
                                                                                 
(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.
                                                  
       
                                                                                
                                                                                 
                                                                                 

16
                                                                         
ACXIOM CORPORATION AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Unaudited)
  
(Dollars in thousands, except per share amounts)
  
                                                                         
                                                               
Q4 FY17 to Q4 FY16
  
   
06/30/15
    
09/30/15
    
12/31/15
    
03/31/16
    
FY2016
    
06/30/16
    
09/30/16
    
12/31/16
    
03/31/17
    
FY2017
    
%
    
 
 $   
Revenues
    
196,895
      
207,345
      
221,193
      
224,655
      
850,088
      
214,801
      
217,267
      
223,312
      
224,867
      
880,247
      
0.1
%
    
212
  
                                                                                                 
Cost of revenue
    
117,709
      
121,312
      
125,735
      
123,626
      
488,382
      
122,819
      
120,105
      
116,468
      
118,294
      
477,686
      
-4.3
%
    
(5,332
)
     Gross profit
    
79,186
      
86,033
      
95,458
      
101,029
      
361,706
      
91,982
      
97,162
      
106,844
      
106,573
      
402,561
      
5.5
%
    
5,544
  
     % Gross margin
    
40.2
%
    
41.5
%
    
43.2
%
    
45.0
%
    
42.5
%
    
42.8
%
    
44.7
%
    
47.8
%
    
47.4
%
    
45.7
%
                
                                                                                                 
Operating expenses
                                                                                                
    Research and development
    
20,011
      
19,078
      
18,400
      
16,758
      
74,247
      
18,652
      
19,029
      
20,950
      
23,478
      
82,109
      
40.1
%
    
6,720
  
    Sales and marketing
    
29,494
      
34,259
      
36,581
      
45,842
      
146,176
      
37,348
      
37,847
      
43,048
      
48,433
      
166,676
      
5.7
%
    
2,591
  
    General and administrative
    
31,743
      
31,519
      
36,793
      
35,330
      
135,385
      
27,506
      
32,866
      
31,620
      
37,721
      
129,714
      
6.8
%
    
2,391
  
    Impairment of goodwill and other
    
-
      
729
      
-
      
6,100
      
6,829
      
-
      
-
      
-
      
1,315
      
1,315
      
-78.4
%
    
(4,785
)
    Gains, losses and other items, net
    
807
      
2,504
      
4,058
      
4,763
      
12,132
      
314
      
300
      
2,111
      
4,335
      
7,058
      
-9.0
%
    
(428
)
Total operating expenses
    
82,055
      
88,089
      
95,832
      
108,793
      
374,769
      
83,820
      
90,042
      
97,729
      
115,282
      
386,872
      
6.0
%
    
6,489
  
                                                                                                 
Income (loss) from operations
    
(2,869
)
    
(2,056
)
    
(374
)
    
(7,764
)
    
(13,063
)
    
8,162
      
7,120
      
9,115
      
(8,709
)
    
15,689
      
-12.2
%
    
(945
)
  % Margin
    
-1.5
%
    
-1.0
%
    
-0.2
%
    
-3.5
%
    
-1.5
%
    
3.8
%
    
3.3
%
    
4.1
%
    
-3.9
%
    
1.8
%
                
Other income (expense)
                                                                                                
  Interest expense
    
(1,885
)
    
(1,956
)
    
(1,948
)
    
(1,880
)
    
(7,669
)
    
(1,812
)
    
(1,689
)
    
(1,743
)
    
(2,137
)
    
(7,381
)
    
-13.6
%
    
(257
)
  Other, net
    
304
      
59
      
303
      
(214
)
    
452
      
307
      
(207
)
    
35
      
199
      
334
      
193.0
%
    
413
  
Total other expense
    
(1,581
)
    
(1,897
)
    
(1,645
)
    
(2,094
)
    
(7,217
)
    
(1,505
)
    
(1,896
)
    
(1,708
)
    
(1,937
)
    
(7,047
)
    
7.5
%
    
157
  
                                                                                                 
Earnings (loss) from continuing operations before income taxes
    
(4,450
)
    
(3,953
)
    
(2,019
)
    
(9,858
)
    
(20,280
)
    
6,657
      
5,224
      
7,407
      
(10,646
)
    
8,642
      
-8.0
%
    
(788
)
Income taxes
    
732
      
(2,608
)
    
(1,580
)
    
(8,176
)
    
(11,632
)
    
2,681
      
(1,916
)
    
6,334
      
(2,565
)
    
4,534
      
68.6
%
    
5,611
  
                                                                                                 
Net earnings (loss) from continuing operations
    
(5,182
)
    
(1,345
)
    
(439
)
    
(1,682
)
    
(8,648
)
    
3,976
      
7,140
      
1,073
      
(8,081
)
    
4,108
      
-380.4
%
    
(6,399
)
                                                                                                 
Earnings (loss) from discontinued operations, net of tax
    
4,143
      
12,068
      
(971
)
    
111
      
15,351
      
-
      
-
      
-
      
-
      
-
      
-100.0
%
    
(111
)
                                                                                                 
Net earnings (loss)
    
(1,039
)
    
10,723
      
(1,410
)
    
(1,571
)
    
6,703
      
3,976
      
7,140
      
1,073
      
(8,081
)
    
4,108
      
-414.4
%
    
(6,510
)
                                                                                                 
Diluted earnings (loss) per share
    
(0.01
)
    
0.14
      
(0.02
)
    
(0.02
)
    
0.09
      
0.05
      
0.09
      
0.01
      
(0.10
)
    
0.05
      
-406.1
%
    
(0.08
)
                                                                                                 
Diluted earnings (loss) per share continuing operations
    
(0.07
)
    
(0.02
)
    
(0.01
)
    
(0.02
)
    
(0.11
)
    
0.05
      
0.09
      
0.01
      
(0.10
)
    
0.05
      
-372.7
%
    
(0.08
)
                                                                                                 
Some earnings (loss) per share amounts may not add due to rounding
                                                                                          
                                                                                                 
                                                                                                 
                                                                                                 

17
                                                             
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
  
(Unaudited)
  
(Dollars in thousands, except per share amounts)
  
                                                             
                                                             
                                                             
   
06/30/15
    
09/30/15
    
12/31/15
    
03/31/16
    
FY2016
    
06/30/16
    
09/30/16
    
12/31/16
    
03/31/17
    
FY2017
  
                                                             
                                                             
   Earnings (loss) from continuing operations before income taxes
    
(4,450
)
    
(3,953
)
    
(2,019
)
    
(9,858
)
    
(20,280
)
    
6,657
      
5,224
      
7,407
      
(10,646
)
    
8,642
  
                                                                                 
   Income taxes
    
732
      
(2,608
)
    
(1,580
)
    
(8,176
)
    
(11,632
)
    
2,681
      
(1,916
)
    
6,334
      
(2,565
)
    
4,534
  
                                                                                 
   Net earnings (loss) from continuing operations
    
(5,182
)
    
(1,345
)
    
(439
)
    
(1,682
)
    
(8,648
)
    
3,976
      
7,140
      
1,073
      
(8,081
)
    
4,108
  
                                                                                 
   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
      
7,140
      
1,073
      
(8,081
)
    
4,108
  
                                                                                 
Earnings (loss) per share:
                                                                                
                                                                                 
    Basic
    
(0.01
)
    
0.14
      
(0.02
)
    
(0.02
)
    
0.09
      
0.05
      
0.09
      
0.01
      
(0.10
)
    
0.05
  
                                                                                 
    Diluted
    
(0.01
)
    
0.14
      
(0.02
)
    
(0.02
)
    
0.09
      
0.05
      
0.09
      
0.01
      
(0.10
)
    
0.05
  
                                                                                 
Excluded items:
                                                                                
  Purchased intangible asset amortization  (cost of revenue)
    
3,754
      
3,754
      
3,754
      
4,204
      
15,466
      
4,077
      
3,890
      
4,621
      
6,056
      
18,644
  
  Non-cash stock compensation (cost of revenue and operating expenses)
    
8,123
      
7,360
      
8,046
      
7,934
      
31,463
      
8,590
      
11,938
      
13,427
      
15,190
      
49,145
  
  Impairment of goodwill and other
    
-
      
729
      
-
      
6,100
      
6,829
      
-
      
-
      
-
      
1,315
      
1,315
  
  Restructuring and merger charges (gains, losses, and other)
    
807
      
2,504
      
4,058
      
4,763
      
12,132
      
314
      
300
      
2,111
      
7,321
      
10,045
  
  Gain on sales of assets (gains, losses and other)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,986
)
    
(2,986
)
  Separation and transformation costs (general and administrative)
    
3,414
      
6,098
      
6,628
      
4,686
      
20,826
      
-
      
1,455
      
4,118
      
3,066
      
8,639
  
  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
      
17,583
      
24,277
      
29,962
      
84,803
  
                                                                                 
   Earnings from continuing operations before income taxes
                                                                                
     and excluding items
    
13,090
      
16,570
      
20,545
      
18,081
      
68,286
      
19,638
      
22,807
      
31,684
      
19,315
      
93,444
  
                                                                                 
   Income taxes
    
5,632
      
5,163
      
6,399
      
4,262
      
21,456
      
7,852
      
8,910
      
12,751
      
7,139
      
36,652
  
                                                                                 
   Non-GAAP net earnings
    
7,458
      
11,407
      
14,146
      
13,819
      
46,830
      
11,786
      
13,897
      
18,933
      
12,177
      
56,792
  
                                                                                 
Non-GAAP earnings per share:
                                                                                
                                                                                 
    Basic
    
0.10
      
0.15
      
0.18
      
0.18
      
0.60
      
0.15
      
0.18
      
0.24
      
0.16
      
0.73
  
                                                                                 
    Diluted
    
0.09
      
0.14
      
0.18
      
0.18
      
0.59
      
0.15
      
0.18
      
0.24
      
0.15
      
0.71
  
                                                                                 
Basic weighted average shares
    
77,918
      
77,960
      
77,831
      
76,753
      
77,616
      
77,471
      
77,446
      
77,507
      
78,012
      
77,609
  
                                                                                 
Diluted weighted average shares
    
79,352
      
79,310
      
79,346
      
78,386
      
79,099
      
79,353
      
79,277
      
79,851
      
80,912
      
79,848
  
                                                                                 
Some totals may not add due to rounding
                                                                                
                                                                                 
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures,
the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
                          
 
                                  
 
                          
       
                                                                                
                                                                                 
                                                                                 

18
ACXIOM CORPORATION AND SUBSIDIARIES
  
RESULTS BY SEGMENT
  
(Unaudited)
  
(Dollars in thousands)
  
                                                               
Q4 FY17 to Q4 FY16
  
   
06/30/15
    
09/30/15
    
12/31/15
    
03/31/16
    
FY2016
    
06/30/16
    
09/30/16
    
12/31/16
    
03/31/17
    
FY2017
    
%
    
 
 $   
                                                                           
Revenues:
                                                                          
Marketing Services
    
107,726
      
112,979
      
115,725
      
113,342
      
449,772
      
109,715
      
105,679
      
101,177
      
94,269
      
410,840
      
-16.8
%
    
(19,073
)
Audience Solutions
    
68,550
      
72,122
      
77,046
      
80,128
      
297,846
      
73,744
      
78,526
      
83,399
      
86,396
      
322,065
      
7.8
%
    
6,268
  
Connectivity
    
20,619
      
22,244
      
28,422
      
31,185
      
102,470
      
31,342
      
33,062
      
38,736
      
44,203
      
147,342
      
41.7
%
    
13,017
  
                                                                                                 
Total operating segment revenues
    
196,895
      
207,345
      
221,193
      
224,655
      
850,088
      
214,801
      
217,267
      
223,312
      
224,867
      
880,247
      
0.1
%
    
212
  
                                                                                                 
Gross profit:
                                                                                                
                                                                                                 
Marketing Services
    
36,034
      
37,545
      
38,561
      
40,117
      
152,258
      
37,466
      
34,480
      
37,494
      
31,207
      
140,647
      
-22.2
%
    
(8,910
)
Audience Solutions
    
36,824
      
39,170
      
45,265
      
46,457
      
167,715
      
41,912
      
47,998
      
53,120
      
55,154
      
198,185
      
18.7
%
    
8,698
  
Connectivity
    
11,953
      
13,499
      
16,130
      
19,617
      
61,199
      
17,575
      
19,843
      
23,091
      
27,742
      
88,251
      
41.4
%
    
8,125
  
                                                                                                 
Total operating segment gross profit
    
84,811
      
90,214
      
99,956
      
106,191
      
381,172
      
96,953
      
102,321
      
113,705
      
114,104
      
427,084
      
7.5
%
    
7,913
  
                                                                                                 
Gross margin:
                                                                                                
                                                                                                 
Marketing Services
    
33.4
%
    
33.2
%
    
33.3
%
    
35.4
%
    
33.9
%
    
34.1
%
    
32.6
%
    
37.1
%
    
33.1
%
    
34.2
%
                
Audience Solutions
    
53.7
%
    
54.3
%
    
58.8
%
    
58.0
%
    
56.3
%
    
56.8
%
    
61.1
%
    
63.7
%
    
63.8
%
    
61.5
%
                
Connectivity
    
58.0
%
    
60.7
%
    
56.8
%
    
62.9
%
    
59.7
%
    
56.1
%
    
60.0
%
    
59.6
%
    
62.8
%
    
59.9
%
                
                                                                                                 
Total operating segment gross margin
    
43.1
%
    
43.5
%
    
45.2
%
    
47.3
%
    
44.8
%
    
45.1
%
    
47.1
%
    
50.9
%
    
50.7
%
    
48.5
%
                
                                                                                                 
Income (loss) from operations:
                                                                                                
                                                                                                 
Marketing Services
    
16,853
      
17,908
      
20,309
      
19,301
      
74,371
      
20,145
      
19,837
      
21,127
      
19,513
      
80,622
      
1.1
%
    
212
  
Audience Solutions
    
24,087
      
25,190
      
30,723
      
29,598
      
109,598
      
25,096
      
29,972
      
34,572
      
33,598
      
123,238
      
13.5
%
    
4,000
  
Connectivity
    
(791
)
    
(1,068
)
    
(1,015
)
    
(424
)
    
(3,298
)
    
291
      
1,663
      
1,877
      
1,502
      
5,333
      
454.3
%
    
1,926
  
                                                                                                 
Total operating segment income from operations
    
40,149
      
42,030
      
50,017
      
48,475
      
180,671
      
45,532
      
51,472
      
57,576
      
54,613
      
209,193
      
12.7
%
    
6,138
  
                                                                                                 
Operating income (loss) margin:
                                                                                                
                                                                                                 
Marketing Services
    
15.6
%
    
15.9
%
    
17.5
%
    
17.0
%
    
16.5
%
    
18.4
%
    
18.8
%
    
20.9
%
    
20.7
%
    
19.6
%
                
Audience Solutions
    
35.1
%
    
34.9
%
    
39.9
%
    
36.9
%
    
36.8
%
    
34.0
%
    
38.2
%
    
41.5
%
    
38.9
%
    
38.3
%
                
Connectivity
    
-3.8
%
    
-4.8
%
    
-3.6
%
    
-1.4
%
    
-3.2
%
    
0.9
%
    
5.0
%
    
4.8
%
    
3.4
%
    
3.6
%
                
                                                                                                 
Total operating segment operating margin
    
20.4
%
    
20.3
%
    
22.6
%
    
21.6
%
    
21.3
%
    
21.2
%
    
23.7
%
    
25.8
%
    
24.3
%
    
23.8
%
                
                                                                                                 
Some totals may not add due to rounding.
                                                                                                
                                                                                                 
 
19
 
       
ACXIOM CORPORATION AND SUBSIDIARIES
  
RECONCILIATION OF GAAP TO NON-GAAP EPS GUIDANCE (1)
  
(Unaudited)
  
(Dollars in thousands, except per share amounts)
  
       
   
For the year ending
  
   
March 31, 2018
  
       
       
   Earnings before income taxes
    
500
  
         
   Income taxes
    
7,500
  
         
   Net loss
    
(7,000
)
         
  Diluted loss per share
  
$
(0.09
)
         
Excluded items:
        
  Purchased intangible asset amortization
    
24,000
  
  Non-cash stock compensation
    
66,000
  
  Gains, losses and other items, net
    
5,000
  
  Separation and transformation costs
    
15,000
  
         
 Total excluded items
    
110,000
  
         
   Earnings before income taxes and excluding items
    
110,500
  
         
   Income taxes (2)
    
44,200
  
         
   Non-GAAP net earnings
    
66,300
  
         
  Non-GAAP diluted earnings per share
  
$
0.80
  
         
  Basic weighted average shares
    
80,000
  
         
  Diluted weighted average shares
    
83,000
  
         
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a
  
substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial
  
statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP
  
measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on
  
the usefulness of these measures, please see Appendix A.
        
         
(2) Income taxes were calculated using an effective non-GAAP tax rate of 40.0%. The difference between our GAAP and Non-GAAP
  
       tax rates was due to the effect of excluded items.
        
         
         

 
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ACXIOM CORPORATION
APPENDIX A
Q4 FISCAL 2017 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES
                     
To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related
expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in
understanding our past performance and our future results. Our non-GAAP financial measures and schedules are
not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only
in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP
financial measures internally to understand, manage and evaluate our business and to make operating decisions.
These measures are among the primary factors management uses in planning for and forecasting future periods.
Compensation of our executives is also based in part on the performance of our business based on these
non-GAAP measures.
                     
Our non-GAAP financial measures, including non-GAAP earnings per share 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 stock-based compensation standards, we believe that it
is useful to investors to understand the impact of the application of these standards to our operational
  
performance. Although stock-based compensation expense is calculated in accordance with current GAAP and
constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is
not an expense that typically requires or will require cash settlement by us and because such expense is not used
by us to assess the core profitability of our business operations.
        
                     
Restructuring charges: During the past several years, we have initiated certain restructuring activities
  
in order to align our costs in connection with both our operating plans and our business strategies
  
based on then-current economic conditions. As a result, we recognized costs related to termination
  
benefits for associates whose positions were eliminated, lease termination charges, and leasehold improvement
write offs. During the current year, we also recognized gains on the sale of the Acxiom Impact business and certain real
estate. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because
such amounts are not used by us to assess the core profitability of our business operations.
    
                     
Merger expenses:  During the current year we have incurred certain third party expenses associated with the
acquisitions of Arbor and Circulate.  These items, reported as gains, losses and other items, net, are excluded from
non-GAAP results because such amounts are used by us to assess the core profitability of our business operations.
 
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Separation and transformation costs:  In prior years, we incurred significant expenses in connection with the
separation of our IT Infrastructure Management ("ITO") and the subsequent transformation of our remaining
operating segments. This work enabled us to transform our external reporting and provide investors with enhanced
transparency and more granular segment-level disclosures in addition to facilitating the ITO disposition. In the
current year, we are incurring expenses to further separate the financial statements of our three operating segments,
with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding
separation and transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in
nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and
3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our
business. We expect to complete these current projects in the next fiscal year. We believe excluding these items from
our non-GAAP financials measures is useful for investors and provides meaningful supplemental information.
                     
Our non-GAAP financial schedules are:
              
                     
Non-GAAP EPS and Non-GAAP Income (loss) from Operations: Our non-GAAP earnings per share and Non-
GAAP income (loss) from operations reflect adjustments as described above, as well as the related tax effects
where applicable.
                  
                     
Adjusted EBITDA: Adjusted EBITDA is defined as net income (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.
      
                     

 
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LiveRamp Holdings, Inc. Reports