LiveRamp Holdings, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 ACXM 2018 Q4

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8-K - 8-K 2018 Q4 - LiveRamp Holdings, Inc.	a2018q48-kearnings.htm

ACXIOM ANNOUNCES FOURTH QUARTER AND FISCAL YEAR RESULTS

Fourth Quarter Revenue Increases 9%

All Segments Post Fourth Quarter Revenue Growth Led by Connectivity Up 30%

Record Bookings Quarter for Marketing Services

Repurchases 1.7 Million Shares in the Quarter

CONWAY, Ark., May 16, 2018-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, 2018.

Fourth Quarter Financial Highlights


•	Revenue: Total revenue was $245 million, up 9% compared to the fourth quarter of last year.


•	Operating Income (Loss): GAAP operating income was $5 million compared to an operating loss of $9 million in the prior year. Non-GAAP operating income grew 61% to $34 million.


•	Earnings (Loss) per Share: GAAP diluted earnings per share were $0.06 compared to a loss per share of $0.10 in the prior year. Non-GAAP diluted earnings per share were $0.27 compared to $0.15 a year ago. Current period results include a $0.02 GAAP tax benefit and $0.03 non-GAAP tax benefit associated with the recent tax reform legislation.


•	Operating Cash Flow: Operating cash flow was $36 million, up from $31 million in the prior year.


•	Free Cash Flow to Equity: Free cash flow to equity was $14 million, down from $26 million in the prior year.

Fiscal Year Financial Highlights


•	Revenue: Total revenue was $917 million, up 4% compared to fiscal 2017 driven by 43% year-over-year growth for Connectivity.


•	Operating Income: GAAP operating income was $11 million compared to $16 million in the prior year. Non-GAAP operating income grew 25% to $126 million.


•	Earnings per Share: GAAP diluted earnings per share were $0.29 compared to earnings per share of $0.05 in the prior year. Non-GAAP diluted earnings per share were $0.94 compared to $0.71 a year ago. Current period results include a $0.31 GAAP tax benefit and $0.08 non-GAAP tax benefit associated with the recent tax reform legislation.


•	Operating Cash Flow: Operating cash flow was $112 million, down from $116 million in the prior year.


•	Free Cash Flow to Equity: Free cash flow to equity was $55 million, down from $63 million in the comparable period.

Segment Results



Connectivity	Q418	Q417	Y/Y Δ	FY18	FY17	Y/Y Δ
Revenue	$ 57	$ 44	30%	$ 211	$ 147	43%
Gross Profit	$ 40	$ 28	45%	$ 141	$ 88	60%
Gross Margin	70%	63%	710 bps	67%	60%	690 bps
Segment Operating Income	$ 6	$ 2	295%	$ 18	$ 5	245%
Segment Margin	10%	3%	690 bps	9%	4%	510 bps



Audience Solutions	Q418	Q417	Y/Y Δ	FY18	FY17	Y/Y Δ
Revenue	$ 88	$ 86	2%	$ 327	$ 322	2%
Gross Profit	$ 54	$ 55	(2%)	$ 202	$ 198	2%
Gross Margin	61%	64%	(290 bps)	62%	62%	20 bps
Segment Operating Income	$ 33	$ 34	(2%)	$ 124	$ 123	1%
Segment Margin	37%	39%	(150 bps)	38%	38%	(30 bps)



Marketing Services	Q418	Q417	Y/Y Δ	FY18	FY17	Y/Y Δ
Revenue	$ 99	$ 94	5%	$ 379	$ 411	(8%)
Gross Profit	$ 38	$ 31	21%	$ 139	$ 141	(1%)
Gross Margin	38%	33%	500 bps	37%	34%	250 bps
Segment Operating Income	$ 20	$ 20	0%	$ 83	$ 81	3%
Segment Margin	20%	21%	(90 bps)	22%	20%	240 bps

*Excluding the divesture of Acxiom Impact, Marketing Services FY18 revenue was down 3% year-over-year.

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules attached to this press release.

Beginning April 1, 2018, the Company will report its results in two business segments: LiveRamp and Acxiom Marketing Solutions.

“Our fourth quarter performance reflects solid global execution,” said Acxiom CEO Scott Howe. “LiveRamp® continues to drive the ubiquity of its identity solution across the open ecosystem, as evidenced by strong new client adoption, progress with the people-based programmatic consortium, the launch of IdentityLink™ for Television and the acceleration of its B2B efforts. At the same time, Marketing Services had its strongest bookings quarter in over five years driven by several meaningful new logo wins.”

“Looking ahead, we are excited about the prospects for both LiveRamp and Acxiom Marketing Solutions,” continued Howe. “We are well down the road in looking at potential strategic alternatives for Acxiom Marketing Solutions and are confident in a successful outcome that will benefit our clients, partners, associates and shareholders.”

Recent Business Highlights


•	LiveRamp added approximately 30 new direct clients during the quarter and added several new partner integrations. Marketers can now onboard and activate their data across a growing network of 575 publishers and marketing technology providers.


•	LiveRamp acquired Pacific Data Partners to accelerate its ability to power people-based business-to-business (B2B) marketing. Pieter De Temmerman and Grant Ries, co-founders of Pacific Data Partners and former Oracle and BlueKai veterans, will lead LiveRamp’s efforts to expand IdentityLink to the world’s largest B2B marketers.


•	LiveRamp launched IdentityLink for Television to transform the world’s largest marketing medium. For the first time, brands, agencies, programmers and technology platforms will be able to execute people-based TV media planning, buying and measurement that is scalable and secure across the TV ecosystem.


•	Marketing Services posted its largest new bookings quarter in the last five years, driven by new logo wins with Toyota, Santander Bank and American Life.


•	Acxiom was granted six U.S. patents in fiscal 2018, representing the most patents granted in a single year in the Company’s history.

•

Acxiom repurchased 1.7 million shares for approximately $49 million during the fourth quarter. Since March 31, 2018, the Company repurchased an additional 1.9 million shares for approximately $46 million. Since the inception of its share repurchase program in August 2011, Acxiom has repurchased a total of 21.9 million shares for $420 million, with $80 million remaining under the current authorization.

Financial Outlook

Acxiom’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, restructuring charges and strategic evaluation support costs.

For fiscal 2019, Acxiom expects to report:


•	Total revenue of between $935 million and $955 million.


•	GAAP loss per share of between $0.23 and $0.18.


•	Non-GAAP diluted earnings per share of between $0.90 and $0.95.

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 nearly 50 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 our exploration of potential strategic alternatives for Acxiom Marketing Solutions does not have a successful outcome; 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 the European General Data Protection Regulation, which becomes effective May 25, 2018, will make it more difficult and/or costly for us to do business in the EU; 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, 2017, which was filed with the Securities and Exchange Commission on May 26, 2017.

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

Acxiom, LiveRamp, IdentityLink, InfoBase and all other Acxiom marks contained herein are trademarks or service marks of Acxiom Corporation. All other marks are the property of their respective owners.




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the Three Months Ended
	March 31,
					$		%
	2018		2017		Variance		Variance

Revenues	244,781		224,867		19,914		8.9	%

Cost of revenue	121,484		118,294		3,190		2.7	%
Gross profit	123,297		106,573		16,724		15.7	%
% Gross margin	50.4	%	47.4	%

Operating expenses:
Research and development	23,979		23,478		501		2.1	%
Sales and marketing	63,311		48,433		14,878		30.7	%
General and administrative	28,360		37,721		(9,361	)	(24.8	)%
Gains, losses and other items, net	2,852		5,650		(2,798	)	(49.5	)%
Total operating expenses	118,502		115,282		3,220		2.8	%

Income (loss) from operations	4,795		(8,709	)	13,504		155.1	%
% Margin	2.0	%	(3.9	)%
Other income (expense):
Interest expense	(2,699	)	(2,137	)	(562	)	(26.3	)%
Other, net	302		199		103		51.6	%
Total other expense	(2,397	)	(1,937	)	(460	)	(23.7	)%

Income (loss) before income taxes	2,398		(10,646	)	13,044		122.5	%

Income taxes	(2,777	)	(2,565	)	(212	)	(8.3	)%

Net earnings (loss)	5,175		(8,081	)	13,256		164.0	%

Basic earnings (loss) per share	0.07		(0.10	)	0.17		170.0	%

Diluted earnings (loss) per share	0.06		(0.10	)	0.16		160.0	%

Basic weighted average shares	78,614		78,012

Diluted weighted average shares	81,282		78,012




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)


	For the Twelve Months Ended
	March 31,
					$		%
	2018		2017		Variance		Variance

Revenues	917,406		880,247		37,159		4.2	%

Cost of revenue	466,436		477,686		(11,250	)	(2.4	)%
Gross profit	450,970		402,561		48,409		12.0	%
% Gross margin	49.2	%	45.7	%

Operating expenses:
Research and development	94,873		82,109		12,764		15.5	%
Sales and marketing	215,599		166,676		48,923		29.4	%
General and administrative	123,526		129,714		(6,188	)	(4.8	)%
Gains, losses and other items, net	6,373		8,373		(2,000	)	(23.9	)%
Total operating expenses	440,371		386,872		53,499		13.8	%

Income from operations	10,599		15,689		(5,090	)	(32.4	)%
% Margin	1.2	%	1.8	%
Other income (expense):
Interest expense	(10,131	)	(7,381	)	(2,750	)	(37.3	)%
Other, net	241		334		(93	)	(27.8	)%
Total other expense	(9,890	)	(7,047	)	(2,843	)	(40.3	)%

Income before income taxes	709		8,642		(7,933	)	(91.8	)%

Income taxes	(22,771	)	4,534		(27,305	)	(602.2	)%

Net earnings	23,480		4,108		19,372		471.6	%

Basic earnings per share	0.30		0.05		0.25		500.0	%

Diluted earnings per share	0.29		0.05		0.24		480.0	%

Basic weighted average shares	78,891		77,609

Diluted weighted average shares	81,516		79,848




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,
	2018		2017		2018		2017

Earnings (loss) before income taxes	2,398		(10,646	)	709		8,642
Income taxes	(2,777	)	(2,565	)	(22,771	)	4,534
Net earnings (loss)	5,175		(8,081	)	23,480		4,108

Earnings (loss) per share:
Basic	0.07		(0.10	)	0.30		0.05

Diluted	0.06		(0.10	)	0.29		0.05

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,963		6,056		23,920		18,644
Non-cash stock compensation (cost of revenue and operating expenses)	16,527		15,190		63,234		49,145
Restructuring and merger charges (gains, losses, and other)	2,852		7,321		6,373		10,045
Gain on sale of assets (gains, losses, and other)	—		(1,671	)	—		(1,671	)
Separation and transformation costs (general and administrative)	3,070		3,066		20,846		8,639
Accelerated amortization (cost of revenue)	999		—		999		—
Total excluded items	29,411		29,962		115,372		84,802

Income before income taxes
and excluding items	31,809		19,315		116,081		93,444
Income taxes (2)	10,045		7,139		39,758		36,652
Non-GAAP net earnings	21,764		12,177		76,323		56,792

Non-GAAP earnings per share:

Basic	0.28		0.16		0.97		0.73

Diluted	0.27		0.15		0.94		0.71

Basic weighted average shares	78,614		78,012		78,891		77,609

Diluted weighted average shares	81,282		80,912		81,516		79,848

(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 31.6% and 37.0% in the fourth quarter of fiscal 2018 and 2017, respectively, and 34.3% and 39.2% for the twelve months ended March 31, 2018 and 2017, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the Tax Cuts and Jobs Act and net tax effects of the excluded items.




ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended			For the Twelve Months Ended
	March 31,			March 31,
	2018	2017		2018	2017


Income (loss) from operations	4,795	(8,709	)	10,599	15,689

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,963	6,056		23,920	18,644
Non-cash stock compensation (cost of revenue and operating expenses)	16,527	15,190		63,234	49,145
Restructuring and merger charges (gains, losses, and other)	2,852	7,321		6,373	10,045
Gain on sale of assets (gains, losses and other)	—	(1,671	)	—	(1,671	)
Separation and transformation costs (general and administrative)	3,070	3,066		20,846	8,639
Accelerated amortization (cost of revenue)	999	—		999	—

Total excluded items	29,411	29,962		115,372	84,802

Income from operations before excluded items	34,206	21,253		125,971	100,491




ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)


	For the Three Months Ended
	March 31,
					$		%
	2018		2017		Variance		Variance

Revenues
Marketing Services	98,954		94,269		4,685		5.0	%
Audience Solutions	88,374		86,396		1,978		2.3	%
Connectivity	57,453		44,203		13,251		30.0	%
Total operating segment revenues	244,781		224,867		19,914		8.9	%

Gross profit
Marketing Services	37,708		31,207		6,501		20.8	%
Audience Solutions	53,883		55,154		(1,271	)	(2.3	)%
Connectivity	40,155		27,742		12,413		44.7	%
Total operating segment gross profit	131,746		114,104		17,643		15.5	%

Gross margin %
Marketing Services	38.1	%	33.1	%
Audience Solutions	61.0	%	63.8	%
Connectivity	69.9	%	62.8	%
Total operating segment gross margin	53.8	%	50.7	%

Income from operations
Marketing Services	19,583		19,513		70		0.4	%
Audience Solutions	33,041		33,598		(557	)	(1.7	)%
Connectivity	5,924		1,502		4,422		294.4	%
Total operating segment income from operations	58,548		54,613		3,935		7.2	%

Operating income margin %
Marketing Services	19.8	%	20.7	%
Audience Solutions	37.4	%	38.9	%
Connectivity	10.3	%	3.4	%
Total operating segment operating margin	23.9	%	24.3	%


Some totals may not add due to rounding.




ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)


	For the Twelve Months Ended
	March 31,
					$		%
	2018		2017		Variance		Variance

Revenues
Marketing Services	379,047		410,840		(31,793	)	(7.7	)%
Audience Solutions	327,358		322,065		5,293		1.6	%
Connectivity	211,001		147,342		63,659		43.2	%
Total operating segment revenues	917,406		880,247		37,159		4.2	%

Gross profit
Marketing Services	139,185		140,647		(1,462	)	(1.0	)%
Audience Solutions	202,235		198,185		4,050		2.0	%
Connectivity	140,885		88,251		52,634		59.6	%
Total operating segment gross profit	482,305		427,084		55,221		12.9	%

Gross margin %
Marketing Services	36.7	%	34.2	%
Audience Solutions	61.8	%	61.5	%
Connectivity	66.8	%	59.9	%
Total operating segment gross margin	52.6	%	48.5	%

Income from operations
Marketing Services	83,304		80,622		2,682		3.3	%
Audience Solutions	124,192		123,238		954		0.8	%
Connectivity	18,399		5,333		13,066		245.0	%
Total operating segment income from operations	225,895		209,193		16,702		8.0	%

Operating income margin %
Marketing Services	22.0	%	19.6	%
Audience Solutions	37.9	%	38.3	%
Connectivity	8.7	%	3.6	%
Total operating segment operating margin	24.6	%	23.8	%


Some totals may not add due to rounding.




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,

	2018	2017		2018	2017

Total operating segment gross profit	131,746	114,104		482,305	427,084

Less:
Purchased intangible asset amortization	5,963	6,056		23,920	18,644
Non-cash stock compensation	1,487	1,475		6,416	5,879
Accelerated amortization	999	—		999	—

Gross profit	123,297	106,573		450,970	402,561


Total operating segment income from operations	58,548	54,613		225,895	209,193

Less:
Corporate expenses	24,342	33,360		99,924	108,702
Purchased intangible asset amortization	5,963	6,056		23,920	18,644
Non-cash stock compensation	16,527	15,190		63,234	49,145
Restructuring charges	2,852	5,650		6,373	8,374
Separation and transformation costs	3,070	3,066		20,846	8,639
Accelerated amortization	999	—		999	—

Income (loss) from operations	4,795.0	(8,709.0	)	10,599.0	15,689.0


Some totals may not add due to rounding.




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,
	2018		2017		2018		2017


Net earnings (loss)	5,175		(8,081	)	23,480		4,108

Income taxes	(2,777	)	(2,565	)	(22,771	)	4,534

Other expense	(2,397	)	(1,937	)	(9,890	)	(7,047	)

Income (loss) from operations	4,795		(8,709	)	10,599		15,689

Depreciation and amortization	22,652		21,593		86,371		82,690

EBITDA	27,447		12,884		96,970		98,379


Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	16,527		15,190		63,234		49,145
Restructuring and merger charges (gains, losses, and other)	2,852		7,321		6,373		10,045
Gain on sale of assets (gains, losses, and other)	—		(1,671	)	—		(1,671	)
Separation and transformation costs (general and administrative)	3,070		3,066		20,846		8,639

Other adjustments	22,449		23,906		90,453		66,158

Adjusted EBITDA	49,896.0		36,790.0		187,423.0		164,537.0

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	March 31,		March 31,		$		%
	2018		2017		Variance		Variance

Assets
Current assets:
Cash and cash equivalents	142,279		170,343		(28,064	)	(16.5	)%
Trade accounts receivable, net	167,188		142,768		24,420		17.1	%
Refundable income taxes	9,733		7,098		2,635		37.1	%
Other current assets	41,145		48,310		(7,165	)	(14.8	)%

Total current assets	360,345		368,519		(8,174	)	(2.2	)%

Property and equipment	491,266		476,281		14,985		3.1	%
Less - accumulated depreciation and amortization	334,733		320,307		14,426		4.5	%

Property and equipment, net	156,533		155,974		559		0.4	%

Software, net of accumulated amortization	34,984		47,638		(12,654	)	(26.6	)%
Goodwill	595,995		592,731		3,264		0.6	%
Purchased software licenses, net of accumulated amortization	7,703		7,972		(269	)	(3.4	)%
Deferred income taxes	12,225		10,261		1,964		19.1	%
Other assets, net	41,468		51,443		(9,975	)	(19.4	)%

	1,209,253		1,234,538		(25,285	)	(2.0	)%

Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt	1,583		39,819		(38,236	)	(96.0	)%
Trade accounts payable	46,688		40,208		6,480		16.1	%
Accrued payroll and related expenses	42,499		53,238		(10,739	)	(20.2	)%
Other accrued expenses	55,865		59,861		(3,996	)	(6.7	)%
Deferred revenue	31,720		37,087		(5,367	)	(14.5	)%

Total current liabilities	178,355		230,213		(51,858	)	(22.5	)%

Long-term debt	227,837		189,241		38,596		20.4	%

Deferred income taxes	40,243		58,374		(18,131	)	(31.1	)%

Other liabilities	13,723		17,730		(4,007	)	(22.6	)%

Stockholders' equity:
Common stock	13,609		13,288		321		2.4	%
Additional paid-in capital	1,235,679		1,154,429		81,250		7.0	%
Retained earnings	628,331		602,609		25,722		4.3	%
Accumulated other comprehensive income	10,767		7,999		2,768		34.6	%
Treasury stock, at cost	(1,139,291	)	(1,039,345	)	(99,946	)	(9.6	)%
Total stockholders' equity	749,095		738,980		10,115		1.4	%

	1,209,253		1,234,538		(25,285	)	(2.0	)%




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	March 31,
	2018		2017
Cash flows from operating activities:
Net earnings (loss)	5,175		(8,081	)
Non-cash operating activities:
Depreciation and amortization	22,652		21,593
Loss on disposal or impairment of assets	702		3,560
Deferred income taxes	356		(6,836	)
Non-cash stock compensation expense	16,527		15,201
Changes in operating assets and liabilities:
Accounts receivable	(10,568	)	(5,000	)
Other assets	(3,463	)	(8,825	)
Accounts payable and other liabilities	6,994		16,110
Deferred revenue	(2,613	)	2,943
Net cash provided by operating activities	35,762		30,665
Cash flows from investing activities:
Capitalized software	(3,407	)	(3,306	)
Capital expenditures	(17,247	)	(17,897	)
Data acquisition costs	(286	)	(418	)
Proceeds from sale of assets	—		25,494
Equity investments	—		(1,000	)
Net cash paid in acquisitions	(4,478	)	—
Net cash provided by (used in) investing activities	(25,418	)	2,873
Cash flows from financing activities:
Payments of debt	(588	)	(8,070	)
Sale of common stock, net of stock acquired for withholding taxes	3,558		6,039
Excess tax benefits from stock-based compensation	—		1,067
Acquisition of treasury stock	(49,443	)	—
Net cash used in financing activities	(46,473	)	(964	)
Effect of exchange rate changes on cash	601		(81	)

Net change in cash and cash equivalents	(35,528	)	32,493
Cash and cash equivalents at beginning of period	177,807		137,850
Cash and cash equivalents at end of period	142,279		170,343

Supplemental cash flow information:
Cash paid during the period for:
Interest	2,457		2,478
Income taxes	84		2,070




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Twelve Months Ended
	March 31,
	2018		2017
Cash flows from operating activities:
Net earnings	23,480		4,108
Non-cash operating activities:
Depreciation and amortization	86,371		82,690
Loss on disposal or impairment of assets	3,348		3,040
Write-off of debt issuance costs	720		—
Deferred income taxes	(20,095	)	(8,818	)
Non-cash stock compensation expense	63,234		49,145
Changes in operating assets and liabilities:
Accounts receivable	(22,000	)	(11,161	)
Other assets	(4,740	)	(172	)
Accounts payable and other liabilities	(11,238	)	4,302
Deferred revenue	(6,927	)	(7,304	)
Net cash provided by operating activities	112,153		115,830
Cash flows from investing activities:
Capitalized software	(13,739	)	(14,477	)
Capital expenditures	(44,197	)	(47,993	)
Data acquisition costs	(907	)	(881	)
Equity investments	(1,000	)	(1,000	)
Net cash received in disposition	4,000		16,988
Proceeds from sale of assets	—		25,494
Net cash paid in acquisitions	(4,478	)	(137,383	)
Net cash used in investing activities	(60,321	)	(159,252	)
Cash flows from financing activities:
Proceeds from debt	230,000		70,000
Payments of debt	(227,320	)	(32,243	)
Debt issuance costs	(4,001	)	—
Sale of common stock, net of stock acquired for withholding taxes	8,665		15,709
Excess tax benefits from stock-based compensation	—		2,852
Acquisition of treasury stock	(88,884	)	(30,542	)
Net cash provided by (used in) financing activities	(81,540	)	25,776
Effect of exchange rate changes on cash	1,644		(1,640	)

Net change in cash and cash equivalents	(28,064	)	(19,286	)
Cash and cash equivalents at beginning of period	170,343		189,629
Cash and cash equivalents at end of period	142,279		170,343

Supplemental cash flow information:
Cash paid during the period for:
Interest	9,169		7,779
Income taxes	1,236		6,866

Noncash investing and financing activities:
Leasehold improvements paid directly by lessor	978		—




ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)


		06/30/16		09/30/16		12/31/16		03/31/17		FY2017		06/30/17		09/30/17		12/31/17		03/31/18		FY2018

Net Cash Provided by Operating Activities		750		35,482		48,933		30,665		115,830		4,951		27,810		43,630		35,762		112,153

Less (plus):
	Capitalized software	(3,982	)	(3,893	)	(3,296	)	(3,306	)	(14,477	)	(3,388	)	(3,756	)	(3,188	)	(3,407	)	(13,739	)
	Capital expenditures	(10,694	)	(9,845	)	(9,557	)	(17,897	)	(47,993	)	(6,888	)	(7,630	)	(12,432	)	(17,247	)	(44,197	)
	Data acquisition costs	(20	)	(247	)	(196	)	(418	)	(881	)	(190	)	(233	)	(198	)	(286	)	(907	)
	Required debt payments	(8,053	)	(8,058	)	(8,062	)	(8,070	)	(32,243	)	(572	)	(578	)	(582	)	(588	)	(2,320	)
	Net cash received in disposition	—		16,988		—		—		16,988		—		4,000		—		—		4,000
	Proceeds from sales of assets	—		—		—		25,494		25,494		—		—		—		—		—

Free Cash Flow to Equity		(21,999	)	30,427		27,822		26,468		62,718		(6,087	)	19,613		27,230		14,234		54,990

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.




ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)

		06/30/16		09/30/16		12/31/16		03/31/17		FY2017		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		%		$
	Revenues	214,801		217,267		223,312		224,867		880,247		212,514		225,240		234,871		244,781		917,406		8.9	%	19,914

	Cost of revenue	122,819		120,105		116,468		118,294		477,686		113,960		115,072		115,920		121,484		466,436		2.7	%	3,190
	Gross profit	91,982		97,162		106,844		106,573		402,561		98,554		110,168		118,951		123,297		450,970		15.7	%	16,724
	% Gross margin	42.8	%	44.7	%	47.8	%	47.4	%	45.7	%	46.4	%	48.9	%	50.6	%	50.4	%	49.2	%

	Operating expenses
	Research and development	18,652		19,029		20,950		23,478		82,109		23,563		24,013		23,318		23,979		94,873		2.1	%	501
	Sales and marketing	37,348		37,847		43,048		48,433		166,676		48,440		50,118		53,730		63,311		215,599		30.7	%	14,878
	General and administrative	27,506		32,866		31,620		37,721		129,714		32,356		31,924		30,886		28,360		123,526		(24.8	)%	(9,361	)
	Gains, losses and other items, net	314		300		2,111		5,650		8,373		(98	)	3,660		(41	)	2,852		6,373		(49.5	)%	(2,798	)
	Total operating expenses	83,820		90,042		97,729		115,282		386,872		104,261		109,715		107,893		118,502		440,371		2.8	%	3,221

	Income (loss) from operations	8,162		7,120		9,115		(8,709	)	15,689		(5,707	)	453		11,058		4,795		10,599		155.1	%	13,504
	% Margin	3.8	%	3.3	%	4.1	%	(3.9	)%	1.8	%	(2.7	)%	0.2	%	4.7	%	2.0	%	1.2	%
	Other income (expense)
	Interest expense	(1,812	)	(1,689	)	(1,743	)	(2,137	)	(7,381	)	(2,342	)	(2,524	)	(2,566	)	(2,699	)	(10,131	)	(26.3	)%	(562	)
	Other, net	307		(207	)	35		199		334		(672	)	192		419		302		241		51.7	%	103
	Total other expense	(1,505	)	(1,896	)	(1,708	)	(1,937	)	(7,047	)	(3,014	)	(2,332	)	(2,147	)	(2,397	)	(9,890	)	(23.7	)%	(460	)

	Income (loss) before income taxes	6,657		5,224		7,407		(10,646	)	8,642		(8,721	)	(1,879	)	8,911		2,398		709		122.5	%	13,044
	Income taxes	2,681		(1,916	)	6,334		(2,565	)	4,534		(7,421	)	1,457		(14,030	)	(2,777	)	(22,771	)	(8.3	)%	(212	)

	Net earnings (loss)	3,976		7,140		1,073		(8,081	)	4,108		(1,300	)	(3,336	)	22,941		5,175		23,480		164.0	%	13,256

	Diluted earnings (loss) per share	0.05		0.09		0.01		(0.10	)	0.05		(0.02	)	(0.04	)	0.28		0.06		0.29		161.5	%	—

	Some earnings (loss) per share amounts may not add due to rounding.

	Basic shares	77,471		77,446		77,507		78,012		77,609		78,672		79,235		79,043		78,614		78,891
	Diluted shares	79,353		79,277		79,851		80,912		79,848		81,440		81,472		81,869		81,282		81,516




ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)

	06/30/16	09/30/16		12/31/16	03/31/17		FY2017		06/30/17		09/30/17		12/31/17		03/31/18		FY2018
Earnings (loss) before income taxes	6,657	5,224		7,407	(10,646	)	8,642		(8,721	)	(1,879	)	8,911		2,398		709
Income taxes	2,681	(1,916	)	6,334	(2,565	)	4,534		(7,421	)	1,457		(14,030	)	(2,777	)	(22,771	)
Net earnings (loss)	3,976	7,140		1,073	(8,081	)	4,108		(1,300	)	(3,336	)	22,941		5,175		23,480

Earnings (loss) per share:
Basic	0.05	0.09		0.01	(0.10	)	0.05		(0.02	)	(0.04	)	0.29		0.07		0.30
Diluted	0.05	0.09		0.01	(0.10	)	0.05		(0.02	)	(0.04	)	0.28		0.06		0.29

Excluded items:
Purchased intangible asset amortization (cost of revenue)	4,077	3,890		4,621	6,056		18,644		5,966		6,021		5,971		5,963		23,920
Non-cash stock compensation (cost of revenue and operating expenses)	8,590	11,938		13,427	15,190		49,145		15,031		15,757		15,919		16,527		63,234
Restructuring and merger charges (gains, losses, and other)	314	300		2,111	7,321		10,045		(98	)	3,660		(41	)	2,852		6,373
Gain on sales of assets (gains, losses and other)	—	—		—	(1,671	)	(1,671	)	—		—		—		—		—
Separation and transformation costs (general and administrative)	—	1,455		4,118	3,066		8,639		7,119		5,442		5,214		3,070		20,846
Accelerated amortization (cost of revenue)	—	—		—	—		—		—		—		—		999		999
Total excluded items	12,981	17,583		24,277	29,962		84,802		28,018		30,880		27,063		29,411		115,372

Income before income taxes
and excluding items	19,638	22,807		31,683	19,315		93,444		19,297		29,001		35,974		31,809		116,081
Income taxes	7,852	8,910		12,751	7,139		36,652		7,720		11,289		10,704		10,045		39,758
Non-GAAP net earnings	11,786	13,897		18,932	12,177		56,792		11,577		17,712		25,270		21,764		76,323

Non-GAAP earnings per share:
Basic	0.15	0.18		0.24	0.16		0.73		0.15		0.22		0.32		0.28		0.97
Diluted	0.15	0.18		0.24	0.15		0.71		0.14		0.22		0.31		0.27		0.94

Basic weighted average shares	77,471	77,446		77,507	78,012		77,609		78,672		79,235		79,043		78,614		78,891
Diluted weighted average shares	79,353	79,277		79,851	80,912		79,848		81,440		81,472		81,869		81,282		81,516

Some totals may not add due to rounding



ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																						Q4 FY18 to Q4 FY17
		06/30/16		09/30/16		12/31/16		03/31/17		FY2017		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		%		$
Revenues:
	Marketing Services	109,715		105,679		101,177		94,269		410,840		91,594		94,042		94,457		98,954		379,047		5.0	%	4,685
	Audience Solutions	73,744		78,526		83,399		86,396		322,065		75,734		78,814		84,436		88,374		327,358		2.3	%	1,978
	Connectivity	31,342		33,062		38,736		44,203		147,342		45,186		52,384		55,978		57,453		211,001		30.0	%	13,250

	Total operating segment revenues	214,801		217,267		223,312		224,867		880,247		212,514		225,240		234,871		244,781		917,406		8.9	%	19,914

Gross profit:
	Marketing Services	37,466		34,480		37,494		31,207		140,647		31,358		34,320		35,798		37,708		139,185		20.8	%	6,501
	Audience Solutions	41,912		47,998		53,120		55,154		198,185		47,210		48,321		52,821		53,883		202,235		(2.3	)%	(1,271	)
	Connectivity	17,575		19,843		23,091		27,742		88,251		27,525		35,291		37,914		40,155		140,885		44.7	%	12,413

	Total operating segment gross profit	96,953		102,321		113,705		114,104		427,084		106,093		117,932		126,533		131,746		482,305		15.5	%	17,642

Gross margin %:
	Marketing Services	34.1	%	32.6	%	37.1	%	33.1	%	34.2	%	34.2	%	36.5	%	37.9	%	38.1	%	36.7	%
	Audience Solutions	56.8	%	61.1	%	63.7	%	63.8	%	61.5	%	62.3	%	61.3	%	62.6	%	61.0	%	61.8	%
	Connectivity	56.1	%	60.0	%	59.6	%	62.8	%	59.9	%	60.9	%	67.4	%	67.7	%	69.9	%	66.8	%

	Total operating segment gross margin	45.1	%	47.1	%	50.9	%	50.7	%	48.5	%	49.9	%	52.4	%	53.9	%	53.8	%	52.6	%

Income (loss) from operations:
	Marketing Services	20,145		19,837		21,127		19,513		80,622		19,784		21,874		22,063		19,583		83,304		0.4	%	70
	Audience Solutions	25,096		29,972		34,572		33,598		123,238		28,542		29,497		33,112		33,041		124,192		(1.7	)%	(557	)
	Connectivity	291		1,663		1,877		1,502		5,333		(48	)	5,715		6,808		5,924		18,399		294.4	%	4,422

	Total operating segment income from operations	45,532		51,472		57,576		54,613		209,193		48,277		57,086		61,983		58,548		225,895		7.2	%	3,935



ACXIOM CORPORATION AND SUBSIDIARIES
RESULTS BY SEGMENT
(Unaudited)
(Dollars in thousands)
																						Q4 FY18 to Q4 FY17
		06/30/16		09/30/16		12/31/16		03/31/17		FY2017		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		%	$
Operating income (loss) margin %:
	Marketing Services	18.4	%	18.8	%	20.9	%	20.7	%	19.6	%	21.6	%	23.3	%	23.4	%	19.8	%	22.0	%
	Audience Solutions	34.0	%	38.2	%	41.5	%	38.9	%	38.3	%	37.7	%	37.4	%	39.2	%	37.4	%	37.9	%
	Connectivity	0.9	%	5.0	%	4.8	%	3.4	%	3.6	%	(0.1	)%	10.9	%	12.2	%	10.3	%	8.7	%

	Total operating segment operating margin	21.2	%	23.7	%	25.8	%	24.3	%	23.8	%	22.7	%	25.3	%	26.4	%	23.9	%	24.6	%

Some totals may not add due to rounding.




ACXIOM CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS GUIDANCE (1)
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the year ending
	March 31, 2019
	Low Range			High Range

Loss before income taxes	(15,500		)	(10,000		)

Income taxes	3,000			4,500

Net loss	(18,500		)	(14,500		)

Diluted loss per share	$	(0.23	)	$	(0.18	)

Excluded items:
Purchased intangible asset amortization	16,000			16,000
Non-cash stock compensation	84,000			84,000
Gains, losses and other items, net	3,000			3,000
Separation and related costs	16,000			16,000

Total excluded items	119,000			119,000

Income before income taxes and excluding items	103,500			109,000

Income taxes (2)	29,000			30,500

Non-GAAP net earnings	74,500			78,500

Non-GAAP diluted earnings per share	$	0.90		$	0.95

Basic weighted average shares	81,000			81,000

Diluted weighted average shares	83,000			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 approximately 28.0%. The difference between our GAAP and Non-GAAP tax rates was due to the effect of excluded items.

APPENDIX A

ACXIOM CORPORATION

Q4 FISCAL 2018 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, income from operations 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 and publisher 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. 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.

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Separation and transformation costs: In previous 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 prior and 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 substantially completed these projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, we incurred transaction analysis and support expenses related to the Company's announced evaluation of strategic options for its Marketing Solutions business. Our criteria for excluding these transaction related costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

Our non-GAAP financial schedules are:


•	Non-GAAP EPS and Non-GAAP Income from Operations: Our non-GAAP earnings per share and Non-GAAP income from operations reflect adjustments as described above, as well as the related tax effects where applicable.

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Adjusted EBITDA: Adjusted EBITDA is defined as net income 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.

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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.

LiveRamp Holdings, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 ACXM 2018 Q4 - May 16, 2018

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LiveRamp Holdings, Inc. Reports