[November 01, 2017] |
|
Acxiom Announces Second Quarter Results
Acxiom®
(Nasdaq: ACXM), the data foundation for the world's best marketers,
today announced financial results for its second quarter ended September
30, 2017.
This press release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20171101006541/en/
Financial Highlights
-
Revenue: Total revenue was $225 million, up 4% compared to the
second quarter of last year. Year-over-year revenue growth was
negatively impacted by $8 million associated with the fiscal year 2017
divestiture of Acxiom Impact.
-
Operating Income: GAAP operating income was break-even compared
to operating income of $7 million in the prior year. Non-GAAP
operating income grew 27% to approximately $31 million.
-
Earnings (Loss) per Share: GAAP loss per share was $0.04
compared to earnings per share of $0.09 in the prior year. Non-GAAP
diluted earnings per share were $0.22 compared to $0.18 a year ago.
-
Operating Cash Flow: Operating cash flow was $28 million, down
from $35 million in the prior year.
-
Free Cash Flow to Equity: Free cash flow to equity was $20
million, down from $30 million in the prior year. Prior year free cash
flow to equity includes proceeds of $17 million associated with the
divestiture of Acxiom Impact compared to $4 million in the current
quarter. For the trailing twelve-month period, free cash flow to
equity improved to $68 million, up from $39 million in the comparable
period.
Segment Results
$M
Connectivity
|
|
Q218
|
|
Q217
|
|
Y/Y ?
|
Revenue
|
|
$
|
52
|
|
$
|
33
|
|
58%
|
Gross Profit
|
|
$
|
35
|
|
$
|
20
|
|
78%
|
Gross Margin
|
|
|
67%
|
|
|
60%
|
|
740 bps
|
Segment Operating Income
|
|
$
|
6
|
|
$
|
2
|
|
244%
|
Segment Margin
|
|
|
11%
|
|
|
5%
|
|
590 bps
|
|
|
|
|
|
|
|
Audience Solutions
|
|
Q218
|
|
Q217
|
|
Y/Y ?
|
Revenue
|
|
$
|
79
|
|
$
|
79
|
|
0%
|
Gross Profit
|
|
$
|
48
|
|
$
|
48
|
|
1%
|
Gross Margin
|
|
|
61%
|
|
|
61%
|
|
20 bps
|
Segment Operating Income
|
|
$
|
29
|
|
$
|
30
|
|
(2%)
|
Segment Margin
|
|
|
37%
|
|
|
38%
|
|
(80 bps)
|
|
|
|
|
|
|
|
Marketing Services
|
|
Q218
|
|
Q217
|
|
Y/Y ?
|
Revenue
|
|
$
|
94
|
|
$
|
106
|
|
(11%)
|
Gross Profit
|
|
$
|
34
|
|
$
|
34
|
|
(0%)
|
Gross Margin
|
|
|
36%
|
|
|
33%
|
|
390 bps
|
Segment Operating Income
|
|
$
|
22
|
|
$
|
20
|
|
10%
|
Segment Margin
|
|
|
23%
|
|
|
19%
|
|
450 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.
"In the second quarter, we strengthened our position as the leader in
omnichannel identity and data connectivity," said Acxiom CEO Scott Howe.
"Our solid financial results are bolstered by continued innovation and
our commitment to clients. During the quarter, we launched IdentityLink
for Agencies, announced a groundbreaking new partnership with American
Express and were recognized by Citibank for our high levels of service
and performance."
Recent Business Highlights
-
LiveRamp® added approximately 25 new direct clients during the
quarter and added over 25 new partner integrations. Marketers can
now onboard and activate their data across a growing network of 550
publishers and marketing technology providers.
-
LiveRamp launched IdentityLink™ for Agencies. This solution
allows agencies to scale people-based marketing capabilities across
platforms and channels for their clients. The launch also marks the
completion of a multi-year initiative to provide all key participants
in the marketing ecosystem - brands, technology platforms, data
owners, publishers, and now agencies - with a universal, people-based
identifier.
-
Acxiom and Amex Advance announced the launch of a joint data-driven
offering to predict purchase intent across the broad U.S. consumer
population. By combining spending insights from American Express'
network with Acxiom's InfoBase® data and first-party customer data,
marketers can more effectively engage consumers with relevant offers
when they are most ready to buy.
-
Acxiom was recognized by Citibank with a Citi Supplier Award
for its high level of performance and service. Acxiom was the only
supplier to earn a Citi Supplier Award for two consecutive years.
-
Acxiom repurchased 860,000 shares for approximately $20 million
during the quarter. Since the inception of its share repurchase
program in August 2011, Acxiom has repurchased 17.7 million shares for
$306 million, with $94 million remaining under authorization.
Financial Outlook
Acxiom's non-GAAP guidance excludes the impact of non-cash stock
compensation, purchased intangible asset amortization, restructuring
charges and business separation costs.
For fiscal 2018, Acxiom expects to report:
-
Revenue of between $920 million and $930 million, an
increase of between 7% and 8% year-over-year after adjusting for the
Acxiom Impact divestiture
-
GAAP diluted loss per share of between $0.08 and $0.04
-
Non-GAAP diluted earnings per share of between $0.80 and $0.85, an
increase of between 13% and 20% 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
48 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,
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.
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 September 30,
|
|
|
2017
|
|
2016
|
|
$ Variance
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
225,240
|
|
|
217,267
|
|
|
7,973
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
115,072
|
|
|
120,105
|
|
|
(5,033
|
)
|
|
(4.2
|
%)
|
Gross profit
|
|
110,168
|
|
|
97,162
|
|
|
13,006
|
|
|
13.4
|
%
|
% Gross margin
|
|
48.9
|
%
|
|
44.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
|
24,013
|
|
|
19,029
|
|
|
4,984
|
|
|
26.2
|
%
|
Sales and marketing
|
|
50,118
|
|
|
37,847
|
|
|
12,271
|
|
|
32.4
|
%
|
General and administrative
|
|
31,924
|
|
|
32,866
|
|
|
(942
|
)
|
|
(2.9
|
%)
|
Gains, losses and other items, net
|
|
3,660
|
|
|
300
|
|
|
3,360
|
|
|
1120.0
|
%
|
Total operating expenses
|
|
109,715
|
|
|
90,042
|
|
|
19,673
|
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
453
|
|
|
7,120
|
|
|
(6,667
|
)
|
|
(93.6
|
%)
|
% Margin
|
|
0.2
|
%
|
|
3.3
|
%
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(2,524
|
)
|
|
(1,689
|
)
|
|
(835
|
)
|
|
(49.4
|
%)
|
Other, net
|
|
192
|
|
|
(207
|
)
|
|
399
|
|
|
192.8
|
%
|
Total other expense
|
|
(2,332
|
)
|
|
(1,896
|
)
|
|
(436
|
)
|
|
(23.0
|
%)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
(1,879
|
)
|
|
5,224
|
|
|
(7,103
|
)
|
|
(136.0
|
%)
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
1,457
|
|
|
(1,916
|
)
|
|
3,373
|
|
|
176.0
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
(3,336
|
)
|
|
7,140
|
|
|
(10,476
|
)
|
|
(146.7
|
%)
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
(0.04
|
)
|
|
0.09
|
|
|
(0.13
|
)
|
|
(145.7
|
%)
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
(0.04
|
)
|
|
0.09
|
|
|
(0.13
|
)
|
|
(146.7
|
%)
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
79,235
|
|
|
77,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
79,235
|
|
|
79,277
|
|
|
|
|
|
|
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (Dollars in thousands, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
$ Variance
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
437,754
|
|
|
432,068
|
|
|
5,686
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
229,032
|
|
|
242,924
|
|
|
(13,892
|
)
|
|
(5.7
|
%)
|
Gross profit
|
|
208,722
|
|
|
189,144
|
|
|
19,578
|
|
|
10.4
|
%
|
% Gross margin
|
|
47.7
|
%
|
|
43.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
|
47,576
|
|
|
37,681
|
|
|
9,895
|
|
|
26.3
|
%
|
Sales and marketing
|
|
98,558
|
|
|
75,195
|
|
|
23,363
|
|
|
31.1
|
%
|
General and administrative
|
|
64,280
|
|
|
60,372
|
|
|
3,908
|
|
|
6.5
|
%
|
Gains, losses and other items, net
|
|
3,562
|
|
|
614
|
|
|
2,948
|
|
|
480.1
|
%
|
Total operating expenses
|
|
213,976
|
|
|
173,862
|
|
|
40,114
|
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
(5,254
|
)
|
|
15,282
|
|
|
(20,536
|
)
|
|
(134.4
|
%)
|
% Margin
|
|
-1.2
|
%
|
|
3.5
|
%
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(4,866
|
)
|
|
(3,501
|
)
|
|
(1,365
|
)
|
|
(39.0
|
%)
|
Other, net
|
|
(480
|
)
|
|
100
|
|
|
(580
|
)
|
|
(580.0
|
%)
|
Total other expense
|
|
(5,346
|
)
|
|
(3,401
|
)
|
|
(1,945
|
)
|
|
(57.2
|
%)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
(10,600
|
)
|
|
11,881
|
|
|
(22,481
|
)
|
|
(189.2
|
%)
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
(5,964
|
)
|
|
765
|
|
|
(6,729
|
)
|
|
(879.6
|
%)
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
(4,636
|
)
|
|
11,116
|
|
|
(15,752
|
)
|
|
(141.7
|
%)
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
(0.06
|
)
|
|
0.14
|
|
|
(0.20
|
)
|
|
(140.9
|
%)
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
(0.06
|
)
|
|
0.14
|
|
|
(0.20
|
)
|
|
(141.9
|
%)
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
78,954
|
|
|
77,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
78,954
|
|
|
79,317
|
|
|
|
|
|
|
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 September 30,
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
(1,879
|
)
|
|
5,224
|
|
|
(10,600
|
)
|
|
11,881
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
1,457
|
|
|
(1,916
|
)
|
|
(5,964
|
)
|
|
765
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
(3,336
|
)
|
|
7,140
|
|
|
(4,636
|
)
|
|
11,116
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
(0.04
|
)
|
|
0.09
|
|
|
(0.06
|
)
|
|
0.14
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
(0.04
|
)
|
|
0.09
|
|
|
(0.06
|
)
|
|
0.14
|
|
|
|
|
|
|
|
|
|
Excluded items:
|
|
|
|
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
6,021
|
|
|
3,890
|
|
|
11,987
|
|
|
7,967
|
Non-cash stock compensation (cost of revenue and operating expenses)
|
|
15,757
|
|
|
11,938
|
|
|
30,788
|
|
|
20,528
|
Restructuring and merger charges (gains, losses, and other)
|
|
3,660
|
|
|
300
|
|
|
3,562
|
|
|
614
|
Separation and transformation costs (general and administrative)
|
|
5,442
|
|
|
1,455
|
|
|
12,561
|
|
|
1,455
|
|
|
|
|
|
|
|
|
|
Total excluded items
|
|
30,880
|
|
|
17,583
|
|
|
58,898
|
|
|
30,564
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and excluding items
|
|
29,001
|
|
|
22,807
|
|
|
48,298
|
|
|
42,445
|
|
|
|
|
|
|
|
|
|
Income taxes (2)
|
|
11,289
|
|
|
8,910
|
|
|
19,009
|
|
|
16,762
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
17,712
|
|
|
13,897
|
|
|
29,289
|
|
|
25,683
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.22
|
|
|
0.18
|
|
|
0.37
|
|
|
0.33
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
0.22
|
|
|
0.18
|
|
|
0.36
|
|
|
0.32
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
79,235
|
|
|
77,446
|
|
|
78,954
|
|
|
77,459
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
81,472
|
|
|
79,277
|
|
|
81,456
|
|
|
79,317
|
(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 38.9% and 39.1% in the second quarter of fiscal 2018 and 2017,
respectively, and 39.4% and 39.5% for the six months ended
September 30, 2017 and 2016, respectively. The difference between
our GAAP and non-GAAP tax rates were primarily due to the net tax
effects of the excluded items.
|
|
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION
OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
453
|
|
7,120
|
|
(5,254
|
)
|
|
15,282
|
|
|
|
|
|
|
|
|
|
Excluded items:
|
|
|
|
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
6,021
|
|
3,890
|
|
11,987
|
|
|
7,967
|
Non-cash stock compensation (cost of revenue and operating expenses)
|
|
15,757
|
|
11,938
|
|
30,788
|
|
|
20,528
|
Restructuring and merger charges (gains, losses, and other)
|
|
3,660
|
|
300
|
|
3,562
|
|
|
614
|
Separation and transformation costs (general and administrative)
|
|
5,442
|
|
1,455
|
|
12,561
|
|
|
1,455
|
|
|
|
|
|
|
|
|
|
Total excluded items
|
|
30,880
|
|
17,583
|
|
58,898
|
|
|
30,564
|
|
|
|
|
|
|
|
|
|
Income from operations before excluded items
|
|
31,333
|
|
24,703
|
|
53,644
|
|
|
45,846
|
(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.
|
|
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
$ Variance
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
94,042
|
|
|
105,679
|
|
|
(11,637
|
)
|
|
(11.0
|
%)
|
Audience Solutions
|
|
78,814
|
|
|
78,526
|
|
|
288
|
|
|
0.4
|
%
|
Connectivity
|
|
52,384
|
|
|
33,062
|
|
|
19,322
|
|
|
58.4
|
%
|
Total operating segment revenues
|
|
225,240
|
|
|
217,267
|
|
|
7,973
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
34,320
|
|
|
34,480
|
|
|
(160
|
)
|
|
(0.5
|
%)
|
Audience Solutions
|
|
48,321
|
|
|
47,998
|
|
|
323
|
|
|
0.7
|
%
|
Connectivity
|
|
35,292
|
|
|
19,843
|
|
|
15,449
|
|
|
77.9
|
%
|
Total operating segment gross profit
|
|
117,933
|
|
|
102,321
|
|
|
15,612
|
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
36.5
|
%
|
|
32.6
|
%
|
|
|
|
|
Audience Solutions
|
|
61.3
|
%
|
|
61.1
|
%
|
|
|
|
|
Connectivity
|
|
67.4
|
%
|
|
60.0
|
%
|
|
|
|
|
Total operating segment gross margin
|
|
52.4
|
%
|
|
47.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
21,874
|
|
|
19,837
|
|
|
2,037
|
|
|
10.3
|
%
|
Audience Solutions
|
|
29,497
|
|
|
29,972
|
|
|
(475
|
)
|
|
(1.6
|
%)
|
Connectivity
|
|
5,715
|
|
|
1,663
|
|
|
4,052
|
|
|
243.7
|
%
|
Total operating segment income from operations
|
|
57,086
|
|
|
51,472
|
|
|
5,614
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
Operating income margin %
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
23.3
|
%
|
|
18.8
|
%
|
|
|
|
|
Audience Solutions
|
|
37.4
|
%
|
|
38.2
|
%
|
|
|
|
|
Connectivity
|
|
10.9
|
%
|
|
5.0
|
%
|
|
|
|
|
Total operating segment operating margin
|
|
25.3
|
%
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Some totals may not add due to rounding.
|
|
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
$ Variance
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
185,636
|
|
|
215,394
|
|
|
(29,758
|
)
|
|
(13.8
|
%)
|
Audience Solutions
|
|
154,548
|
|
|
152,270
|
|
|
2,278
|
|
|
1.5
|
%
|
Connectivity
|
|
97,570
|
|
|
64,404
|
|
|
33,166
|
|
|
51.5
|
%
|
Total operating segment revenues
|
|
437,754
|
|
|
432,068
|
|
|
5,686
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
65,678
|
|
|
71,946
|
|
|
(6,268
|
)
|
|
(8.7
|
%)
|
Audience Solutions
|
|
95,531
|
|
|
89,910
|
|
|
5,621
|
|
|
6.3
|
%
|
Connectivity
|
|
62,817
|
|
|
37,418
|
|
|
25,399
|
|
|
67.9
|
%
|
Total operating segment gross profit
|
|
224,026
|
|
|
199,274
|
|
|
24,752
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
35.4
|
%
|
|
33.4
|
%
|
|
|
|
|
Audience Solutions
|
|
61.8
|
%
|
|
59.0
|
%
|
|
|
|
|
Connectivity
|
|
64.4
|
%
|
|
58.1
|
%
|
|
|
|
|
Total operating segment gross margin
|
|
51.2
|
%
|
|
46.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
41,658
|
|
|
39,982
|
|
|
1,676
|
|
|
4.2
|
%
|
Audience Solutions
|
|
58,039
|
|
|
55,068
|
|
|
2,971
|
|
|
5.4
|
%
|
Connectivity
|
|
5,667
|
|
|
1,954
|
|
|
3,713
|
|
|
190.0
|
%
|
Total operating segment income from operations
|
|
105,364
|
|
|
97,004
|
|
|
8,360
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
Operating income margin %
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
22.4
|
%
|
|
18.6
|
%
|
|
|
|
|
Audience Solutions
|
|
37.6
|
%
|
|
36.2
|
%
|
|
|
|
|
Connectivity
|
|
5.8
|
%
|
|
3.0
|
%
|
|
|
|
|
Total operating segment operating margin
|
|
24.1
|
%
|
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30,
|
|
For the Six Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Total operating segment gross profit
|
|
117,933
|
|
102,321
|
|
224,026
|
|
|
199,274
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Purchased intangible asset amortization
|
|
6,021
|
|
3,890
|
|
11,987
|
|
|
7,967
|
Non-cash stock compensation
|
|
1,744
|
|
1,269
|
|
3,317
|
|
|
2,163
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
110,168
|
|
97,162
|
|
208,722
|
|
|
189,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment income from operations
|
|
57,086
|
|
51,472
|
|
105,364
|
|
|
97,004
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Corporate expenses
|
|
25,753
|
|
26,769
|
|
51,720
|
|
|
51,158
|
Purchased intangible asset amortization
|
|
6,021
|
|
3,890
|
|
11,987
|
|
|
7,967
|
Non-cash stock compensation
|
|
15,757
|
|
11,938
|
|
30,788
|
|
|
20,528
|
Restructuring charges
|
|
3,660
|
|
300
|
|
3,562
|
|
|
614
|
Separation and transformation costs
|
|
5,442
|
|
1,455
|
|
12,561
|
|
|
1,455
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
453
|
|
7,120
|
|
(5,254
|
)
|
|
15,282
|
|
|
|
|
|
|
|
|
|
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 September 30,
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
(3,336
|
)
|
|
7,140
|
|
|
(4,636
|
)
|
|
11,116
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
1,457
|
|
|
(1,916
|
)
|
|
(5,964
|
)
|
|
765
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
(2,332
|
)
|
|
(1,896
|
)
|
|
(5,346
|
)
|
|
(3,401
|
)
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
453
|
|
|
7,120
|
|
|
(5,254
|
)
|
|
15,282
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
21,409
|
|
|
20,360
|
|
|
42,519
|
|
|
41,150
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
21,862
|
|
|
27,480
|
|
|
37,265
|
|
|
56,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other adjustments:
|
|
|
|
|
|
|
|
|
Non-cash stock compensation (cost of revenue and operating expenses)
|
|
15,757
|
|
|
11,938
|
|
|
30,788
|
|
|
20,528
|
|
Gains, losses, and other items, net
|
|
3,660
|
|
|
300
|
|
|
3,562
|
|
|
614
|
|
Separation and transformation costs (general and administrative)
|
|
5,442
|
|
|
1,455
|
|
|
12,561
|
|
|
1,455
|
|
|
|
|
|
|
|
|
|
|
Other adjustments
|
|
24,859
|
|
|
13,693
|
|
|
46,911
|
|
|
22,597
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
46,721
|
|
|
41,173
|
|
|
84,176
|
|
|
79,029
|
|
(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 (Unaudited) (Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
March 31, 2017
|
|
$ Variance
|
|
% Variance
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
169,507
|
|
|
170,343
|
|
|
(836
|
)
|
|
(0.5
|
%)
|
Trade accounts receivable, net
|
|
141,285
|
|
|
142,768
|
|
|
(1,483
|
)
|
|
(1.0
|
%)
|
Refundable income taxes
|
|
9,718
|
|
|
7,098
|
|
|
2,620
|
|
|
36.9
|
%
|
Other current assets
|
|
47,394
|
|
|
48,310
|
|
|
(916
|
)
|
|
(1.9
|
%)
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
367,904
|
|
|
368,519
|
|
|
(615
|
)
|
|
(0.2
|
%)
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
477,999
|
|
|
476,281
|
|
|
1,718
|
|
|
0.4
|
%
|
Less - accumulated depreciation and amortization
|
|
326,944
|
|
|
320,307
|
|
|
6,637
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
151,055
|
|
|
155,974
|
|
|
(4,919
|
)
|
|
(3.2
|
%)
|
|
|
|
|
|
|
|
|
|
Software, net of accumulated amortization
|
|
41,087
|
|
|
47,638
|
|
|
(6,551
|
)
|
|
(13.8
|
%)
|
Goodwill
|
|
592,845
|
|
|
592,731
|
|
|
114
|
|
|
0.0
|
%
|
Purchased software licenses, net of accumulated amortization
|
|
6,765
|
|
|
7,972
|
|
|
(1,207
|
)
|
|
(15.1
|
%)
|
Deferred income taxes
|
|
12,309
|
|
|
10,261
|
|
|
2,048
|
|
|
20.0
|
%
|
Other assets, net
|
|
44,807
|
|
|
51,443
|
|
|
(6,636
|
)
|
|
(12.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
1,216,772
|
|
|
1,234,538
|
|
|
(17,766
|
)
|
|
(1.4
|
%)
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current installments of long-term debt
|
|
2,089
|
|
|
39,819
|
|
|
(37,730
|
)
|
|
(94.8
|
%)
|
Trade accounts payable
|
|
46,966
|
|
|
40,208
|
|
|
6,758
|
|
|
16.8
|
%
|
Accrued payroll and related expenses
|
|
28,455
|
|
|
53,238
|
|
|
(24,783
|
)
|
|
(46.6
|
%)
|
Other accrued expenses
|
|
57,914
|
|
|
59,861
|
|
|
(1,947
|
)
|
|
(3.3
|
%)
|
Deferred revenue
|
|
29,411
|
|
|
37,087
|
|
|
(7,676
|
)
|
|
(20.7
|
%)
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
164,835
|
|
|
230,213
|
|
|
(65,378
|
)
|
|
(28.4
|
%)
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
228,045
|
|
|
189,241
|
|
|
38,804
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
54,256
|
|
|
58,374
|
|
|
(4,118
|
)
|
|
(7.1
|
%)
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
16,540
|
|
|
17,730
|
|
|
(1,190
|
)
|
|
(6.7
|
%)
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock
|
|
13,478
|
|
|
13,288
|
|
|
190
|
|
|
1.4
|
%
|
Additional paid-in capital
|
|
1,197,083
|
|
|
1,154,429
|
|
|
42,654
|
|
|
3.7
|
%
|
Retained earnings
|
|
600,215
|
|
|
602,609
|
|
|
(2,394
|
)
|
|
(0.4
|
%)
|
Accumulated other comprehensive income
|
|
9,410
|
|
|
7,999
|
|
|
1,411
|
|
|
17.6
|
%
|
Treasury stock, at cost
|
|
(1,067,090
|
)
|
|
(1,039,345
|
)
|
|
(27,745
|
)
|
|
(2.7
|
%)
|
Total stockholders' equity
|
|
753,096
|
|
|
738,980
|
|
|
14,116
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
1,216,772
|
|
|
1,234,538
|
|
|
(17,766
|
)
|
|
(1.4
|
%)
|
|
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) (Dollars in thousands)
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net earnings (loss)
|
|
(3,336
|
)
|
|
7,140
|
|
Non-cash operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
21,409
|
|
|
20,360
|
|
Loss (gain) on disposal or impairment of assets
|
|
2,248
|
|
|
(629
|
)
|
Deferred income taxes
|
|
(5,735
|
)
|
|
(5,861
|
)
|
Non-cash stock compensation expense
|
|
15,758
|
|
|
11,914
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(9,344
|
)
|
|
(11,051
|
)
|
Other assets
|
|
(171
|
)
|
|
(1,704
|
)
|
Accounts payable and other liabilities
|
|
10,231
|
|
|
19,241
|
|
Deferred revenue
|
|
(3,250
|
)
|
|
(3,928
|
)
|
Net cash provided by operating activities
|
|
27,810
|
|
|
35,482
|
|
Cash flows from investing activities:
|
|
|
|
|
Capitalized software
|
|
(3,756
|
)
|
|
(3,893
|
)
|
Capital expenditures
|
|
(7,630
|
)
|
|
(9,845
|
)
|
Data acquisition costs
|
|
(233
|
)
|
|
(247
|
)
|
Net cash received in disposition
|
|
4,000
|
|
|
16,988
|
|
Net cash provided by (used in) investing activities
|
|
(7,619
|
)
|
|
3,003
|
|
Cash flows from financing activities:
|
|
|
|
|
Payments of debt
|
|
(578
|
)
|
|
(8,058
|
)
|
Sale of common stock, net of stock acquired for withholding taxes
|
|
6,234
|
|
|
4,326
|
|
Excess tax benefits from share-based compensation
|
|
-
|
|
|
901
|
|
Acquisition of treasury stock
|
|
(19,776
|
)
|
|
(10,335
|
)
|
Net cash used in financing activities
|
|
(14,120
|
)
|
|
(13,166
|
)
|
Effect of exchange rate changes on cash
|
|
290
|
|
|
(70
|
)
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
6,361
|
|
|
25,249
|
|
Cash and cash equivalents at beginning of period
|
|
163,146
|
|
|
150,160
|
|
Cash and cash equivalents at end of period
|
|
169,507
|
|
|
175,409
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
Interest
|
|
2,387
|
|
|
1,704
|
|
Income taxes
|
|
470
|
|
|
273
|
|
|
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) (Dollars in thousands)
|
|
|
|
|
|
|
|
For the Six Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net earnings (loss)
|
|
(4,636
|
)
|
|
11,116
|
|
Non-cash operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
42,519
|
|
|
41,150
|
|
Loss (gain) on disposal or impairment of assets
|
|
2,411
|
|
|
(629
|
)
|
Accelerated deferred debt costs
|
|
720
|
|
|
-
|
|
Deferred income taxes
|
|
(3,238
|
)
|
|
(6,539
|
)
|
Non-cash stock compensation expense
|
|
30,796
|
|
|
20,504
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
2,616
|
|
|
(1,564
|
)
|
Other assets
|
|
(3,548
|
)
|
|
3,679
|
|
Accounts payable and other liabilities
|
|
(26,842
|
)
|
|
(21,780
|
)
|
Deferred revenue
|
|
(8,037
|
)
|
|
(9,705
|
)
|
Net cash provided by operating activities
|
|
32,761
|
|
|
36,232
|
|
Cash flows from investing activities:
|
|
|
|
|
Capitalized software
|
|
(7,144
|
)
|
|
(7,875
|
)
|
Capital expenditures
|
|
(14,518
|
)
|
|
(20,539
|
)
|
Data acquisition costs
|
|
(423
|
)
|
|
(267
|
)
|
Net cash received in disposition
|
|
4,000
|
|
|
16,988
|
|
Net cash used in investing activities
|
|
(18,085
|
)
|
|
(11,693
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from debt
|
|
230,000
|
|
|
-
|
|
Payments of debt
|
|
(226,150
|
)
|
|
(16,111
|
)
|
Fees for debt refinancing
|
|
(4,001
|
)
|
|
-
|
|
Sale of common stock, net of stock acquired for withholding taxes
|
|
3,695
|
|
|
7,300
|
|
Excess tax benefits from share-based compensation
|
|
-
|
|
|
1,415
|
|
Acquisition of treasury stock
|
|
(19,776
|
)
|
|
(30,542
|
)
|
Net cash used in financing activities
|
|
(16,232
|
)
|
|
(37,938
|
)
|
Effect of exchange rate changes on cash
|
|
720
|
|
|
(821
|
)
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
(836
|
)
|
|
(14,220
|
)
|
Cash and cash equivalents at beginning of period
|
|
170,343
|
|
|
189,629
|
|
Cash and cash equivalents at end of period
|
|
169,507
|
|
|
175,409
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
Interest
|
|
4,762
|
|
|
3,962
|
|
Income taxes
|
|
824
|
|
|
197
|
|
|
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
|
|
YTD FY2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
750
|
|
|
35,482
|
|
|
48,933
|
|
|
30,665
|
|
|
115,830
|
|
|
4,951
|
|
|
27,810
|
|
|
32,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less (plus):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized software
|
|
(3,982
|
)
|
|
(3,893
|
)
|
|
(3,296
|
)
|
|
(3,306
|
)
|
|
(14,477
|
)
|
|
(3,388
|
)
|
|
(3,756
|
)
|
|
(7,144
|
)
|
Capital expenditures
|
|
(10,694
|
)
|
|
(9,845
|
)
|
|
(9,557
|
)
|
|
(17,897
|
)
|
|
(47,993
|
)
|
|
(6,888
|
)
|
|
(7,630
|
)
|
|
(14,518
|
)
|
Data acquisition costs
|
|
(20
|
)
|
|
(247
|
)
|
|
(196
|
)
|
|
(418
|
)
|
|
(881
|
)
|
|
(190
|
)
|
|
(233
|
)
|
|
(423
|
)
|
Required debt payments
|
|
(8,053
|
)
|
|
(8,058
|
)
|
|
(8,062
|
)
|
|
(8,070
|
)
|
|
(32,243
|
)
|
|
(572
|
)
|
|
(578
|
)
|
|
(1,150
|
)
|
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
|
|
|
13,526
|
|
(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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY18 to Q2 FY17
|
|
|
06/30/16
|
|
09/30/16
|
|
12/31/16
|
|
03/31/17
|
|
FY2017
|
|
06/30/17
|
|
09/30/17
|
|
YTD FY2018
|
|
%
|
|
$
|
Revenues
|
|
214,801
|
|
|
217,267
|
|
|
223,312
|
|
|
224,867
|
|
|
880,247
|
|
|
212,514
|
|
|
225,240
|
|
|
437,754
|
|
|
3.7
|
%
|
|
7,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
122,819
|
|
|
120,105
|
|
|
116,468
|
|
|
118,294
|
|
|
477,686
|
|
|
113,960
|
|
|
115,072
|
|
|
229,032
|
|
|
(4.2
|
%)
|
|
(5,033
|
)
|
Gross profit
|
|
91,982
|
|
|
97,162
|
|
|
106,844
|
|
|
106,573
|
|
|
402,561
|
|
|
98,554
|
|
|
110,168
|
|
|
208,722
|
|
|
13.4
|
%
|
|
13,006
|
|
% Gross margin
|
|
42.8
|
%
|
|
44.7
|
%
|
|
47.8
|
%
|
|
47.4
|
%
|
|
45.7
|
%
|
|
46.4
|
%
|
|
48.9
|
%
|
|
47.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
18,652
|
|
|
19,029
|
|
|
20,950
|
|
|
23,478
|
|
|
82,109
|
|
|
23,563
|
|
|
24,013
|
|
|
47,576
|
|
|
26.2
|
%
|
|
4,984
|
|
Sales and marketing
|
|
37,348
|
|
|
37,847
|
|
|
43,048
|
|
|
48,433
|
|
|
166,676
|
|
|
48,440
|
|
|
50,118
|
|
|
98,558
|
|
|
32.4
|
%
|
|
12,271
|
|
General and administrative
|
|
27,506
|
|
|
32,866
|
|
|
31,620
|
|
|
37,721
|
|
|
129,714
|
|
|
32,356
|
|
|
31,924
|
|
|
64,280
|
|
|
-2.9
|
%
|
|
(942
|
)
|
Gains, losses and other items, net
|
|
314
|
|
|
300
|
|
|
2,111
|
|
|
5,650
|
|
|
8,373
|
|
|
(98
|
)
|
|
3,660
|
|
|
3,562
|
|
|
1121.6
|
%
|
|
3,360
|
|
Total operating expenses
|
|
83,820
|
|
|
90,042
|
|
|
97,729
|
|
|
115,282
|
|
|
386,872
|
|
|
104,261
|
|
|
109,715
|
|
|
213,976
|
|
|
21.8
|
%
|
|
19,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
8,162
|
|
|
7,120
|
|
|
9,115
|
|
|
(8,709
|
)
|
|
15,689
|
|
|
(5,707
|
)
|
|
453
|
|
|
(5,254
|
)
|
|
(93.6
|
%)
|
|
(6,667
|
)
|
% Margin
|
|
3.8
|
%
|
|
3.3
|
%
|
|
4.1
|
%
|
|
-3.9
|
%
|
|
1.8
|
%
|
|
-2.7
|
%
|
|
0.2
|
%
|
|
-1.2
|
%
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(1,812
|
)
|
|
(1,689
|
)
|
|
(1,743
|
)
|
|
(2,137
|
)
|
|
(7,381
|
)
|
|
(2,342
|
)
|
|
(2,524
|
)
|
|
(4,866
|
)
|
|
(49.4
|
%)
|
|
(835
|
)
|
Other, net
|
|
307
|
|
|
(207
|
)
|
|
35
|
|
|
199
|
|
|
334
|
|
|
(672
|
)
|
|
192
|
|
|
(480
|
)
|
|
192.8
|
%
|
|
399
|
|
Total other expense
|
|
(1,505
|
)
|
|
(1,896
|
)
|
|
(1,708
|
)
|
|
(1,937
|
)
|
|
(7,047
|
)
|
|
(3,014
|
)
|
|
(2,332
|
)
|
|
(5,346
|
)
|
|
(23.0
|
%)
|
|
(436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
6,657
|
|
|
5,224
|
|
|
7,407
|
|
|
(10,646
|
)
|
|
8,642
|
|
|
(8,721
|
)
|
|
(1,879
|
)
|
|
(10,600
|
)
|
|
(136.0
|
%)
|
|
(7,103
|
)
|
Income taxes
|
|
2,681
|
|
|
(1,916
|
)
|
|
6,334
|
|
|
(2,565
|
)
|
|
4,534
|
|
|
(7,421
|
)
|
|
1,457
|
|
|
(5,964
|
)
|
|
176.0
|
%
|
|
3,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
3,976
|
|
|
7,140
|
|
|
1,073
|
|
|
(8,081
|
)
|
|
4,108
|
|
|
(1,300
|
)
|
|
(3,336
|
)
|
|
(4,636
|
)
|
|
(146.7
|
%)
|
|
(10,476
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
0.05
|
|
|
0.09
|
|
|
0.01
|
|
|
(0.10
|
)
|
|
0.05
|
|
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.06
|
)
|
|
(146.7
|
%)
|
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Some earnings (loss) per share amounts may not add due to rounding.
|
|
ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO
NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06/30/16
|
|
09/30/16
|
|
12/31/16
|
|
03/31/17
|
|
FY2017
|
|
06/30/17
|
|
09/30/17
|
|
YTD FY2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
6,657
|
|
5,224
|
|
|
7,407
|
|
(10,646
|
)
|
|
8,642
|
|
|
(8,721
|
)
|
|
(1,879
|
)
|
|
(10,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
2,681
|
|
(1,916
|
)
|
|
6,334
|
|
(2,565
|
)
|
|
4,534
|
|
|
(7,421
|
)
|
|
1,457
|
|
|
(5,964
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
3,976
|
|
7,140
|
|
|
1,073
|
|
(8,081
|
)
|
|
4,108
|
|
|
(1,300
|
)
|
|
(3,336
|
)
|
|
(4,636
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.05
|
|
0.09
|
|
|
0.01
|
|
(0.10
|
)
|
|
0.05
|
|
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
0.05
|
|
0.09
|
|
|
0.01
|
|
(0.10
|
)
|
|
0.05
|
|
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluded items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased intangible asset amortization (cost of revenue)
|
|
4,077
|
|
3,890
|
|
|
4,621
|
|
6,056
|
|
|
18,644
|
|
|
5,966
|
|
|
6,021
|
|
|
11,987
|
|
Non-cash stock compensation (cost of revenue and operating expenses)
|
|
8,590
|
|
11,938
|
|
|
13,427
|
|
15,190
|
|
|
49,145
|
|
|
15,031
|
|
|
15,757
|
|
|
30,788
|
|
Restructuring and merger charges (gains, losses, and other)
|
|
314
|
|
300
|
|
|
2,111
|
|
7,321
|
|
|
10,045
|
|
|
(98
|
)
|
|
3,660
|
|
|
3,562
|
|
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
|
|
|
12,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluded items
|
|
12,981
|
|
17,583
|
|
|
24,277
|
|
29,962
|
|
|
84,803
|
|
|
28,018
|
|
|
30,880
|
|
|
58,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and excluding items
|
|
19,638
|
|
22,807
|
|
|
31,684
|
|
19,315
|
|
|
93,444
|
|
|
19,297
|
|
|
29,001
|
|
|
48,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
7,852
|
|
8,910
|
|
|
12,751
|
|
7,139
|
|
|
36,652
|
|
|
7,720
|
|
|
11,289
|
|
|
19,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
11,786
|
|
13,897
|
|
|
18,933
|
|
12,177
|
|
|
56,792
|
|
|
11,577
|
|
|
17,712
|
|
|
29,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.15
|
|
0.18
|
|
|
0.24
|
|
0.16
|
|
|
0.73
|
|
|
0.15
|
|
|
0.22
|
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
0.15
|
|
0.18
|
|
|
0.24
|
|
0.15
|
|
|
0.71
|
|
|
0.14
|
|
|
0.22
|
|
|
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
77,471
|
|
77,446
|
|
|
77,507
|
|
78,012
|
|
|
77,609
|
|
|
78,672
|
|
|
79,235
|
|
|
78,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
79,353
|
|
79,277
|
|
|
79,851
|
|
80,912
|
|
|
79,848
|
|
|
81,440
|
|
|
81,472
|
|
|
81,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY18 to Q2 FY17
|
|
|
06/30/16
|
|
09/30/16
|
|
12/31/16
|
|
03/31/17
|
|
FY2017
|
|
06/30/17
|
|
09/30/17
|
|
YTD FY2018
|
|
%
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
109,715
|
|
|
105,679
|
|
|
101,177
|
|
|
94,269
|
|
|
410,840
|
|
|
91,594
|
|
|
94,042
|
|
|
185,636
|
|
|
(11.0
|
%)
|
|
(11,637
|
)
|
Audience Solutions
|
|
73,744
|
|
|
78,526
|
|
|
83,399
|
|
|
86,396
|
|
|
322,065
|
|
|
75,734
|
|
|
78,814
|
|
|
154,548
|
|
|
0.4
|
%
|
|
288
|
|
Connectivity
|
|
31,342
|
|
|
33,062
|
|
|
38,736
|
|
|
44,203
|
|
|
147,342
|
|
|
45,186
|
|
|
52,384
|
|
|
97,570
|
|
|
58.4
|
%
|
|
19,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment revenues
|
|
214,801
|
|
|
217,267
|
|
|
223,312
|
|
|
224,867
|
|
|
880,247
|
|
|
212,514
|
|
|
225,240
|
|
|
437,754
|
|
|
3.7
|
%
|
|
7,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
37,466
|
|
|
34,480
|
|
|
37,494
|
|
|
31,207
|
|
|
140,647
|
|
|
31,358
|
|
|
34,320
|
|
|
65,678
|
|
|
(0.5
|
%)
|
|
(160
|
)
|
Audience Solutions
|
|
41,912
|
|
|
47,998
|
|
|
53,120
|
|
|
55,154
|
|
|
198,185
|
|
|
47,210
|
|
|
48,321
|
|
|
95,531
|
|
|
0.7
|
%
|
|
323
|
|
Connectivity
|
|
17,575
|
|
|
19,843
|
|
|
23,091
|
|
|
27,742
|
|
|
88,251
|
|
|
27,525
|
|
|
35,292
|
|
|
62,817
|
|
|
77.9
|
%
|
|
15,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment gross profit
|
|
96,953
|
|
|
102,321
|
|
|
113,705
|
|
|
114,104
|
|
|
427,084
|
|
|
106,093
|
|
|
117,933
|
|
|
224,026
|
|
|
15.3
|
%
|
|
15,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin %:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
34.1
|
%
|
|
32.6
|
%
|
|
37.1
|
%
|
|
33.1
|
%
|
|
34.2
|
%
|
|
34.2
|
%
|
|
36.5
|
%
|
|
35.4
|
%
|
|
|
|
|
Audience Solutions
|
|
56.8
|
%
|
|
61.1
|
%
|
|
63.7
|
%
|
|
63.8
|
%
|
|
61.5
|
%
|
|
62.3
|
%
|
|
61.3
|
%
|
|
61.8
|
%
|
|
|
|
|
Connectivity
|
|
56.1
|
%
|
|
60.0
|
%
|
|
59.6
|
%
|
|
62.8
|
%
|
|
59.9
|
%
|
|
60.9
|
%
|
|
67.4
|
%
|
|
64.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment gross margin
|
|
45.1
|
%
|
|
47.1
|
%
|
|
50.9
|
%
|
|
50.7
|
%
|
|
48.5
|
%
|
|
49.9
|
%
|
|
52.4
|
%
|
|
51.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
20,145
|
|
|
19,837
|
|
|
21,127
|
|
|
19,513
|
|
|
80,622
|
|
|
19,784
|
|
|
21,874
|
|
|
41,657
|
|
|
10.3
|
%
|
|
2,037
|
|
Audience Solutions
|
|
25,096
|
|
|
29,972
|
|
|
34,572
|
|
|
33,598
|
|
|
123,238
|
|
|
28,542
|
|
|
29,497
|
|
|
58,039
|
|
|
(1.6
|
%)
|
|
(475
|
)
|
Connectivity
|
|
291
|
|
|
1,663
|
|
|
1,877
|
|
|
1,502
|
|
|
5,333
|
|
|
(48
|
)
|
|
5,715
|
|
|
5,667
|
|
|
243.7
|
%
|
|
4,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment income from operations
|
|
45,532
|
|
|
51,472
|
|
|
57,576
|
|
|
54,613
|
|
|
209,193
|
|
|
48,277
|
|
|
57,086
|
|
|
105,364
|
|
|
10.9
|
%
|
|
5,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) margin %:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Services
|
|
18.4
|
%
|
|
18.8
|
%
|
|
20.9
|
%
|
|
20.7
|
%
|
|
19.6
|
%
|
|
21.6
|
%
|
|
23.3
|
%
|
|
22.4
|
%
|
|
|
|
|
Audience Solutions
|
|
34.0
|
%
|
|
38.2
|
%
|
|
41.5
|
%
|
|
38.9
|
%
|
|
38.3
|
%
|
|
37.7
|
%
|
|
37.4
|
%
|
|
37.6
|
%
|
|
|
|
|
Connectivity
|
|
0.9
|
%
|
|
5.0
|
%
|
|
4.8
|
%
|
|
3.4
|
%
|
|
3.6
|
%
|
|
-0.1
|
%
|
|
10.9
|
%
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating segment operating margin
|
|
21.2
|
%
|
|
23.7
|
%
|
|
25.8
|
%
|
|
24.3
|
%
|
|
23.8
|
%
|
|
22.7
|
%
|
|
25.3
|
%
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018
|
|
|
|
|
|
|
|
Low Range
|
|
High Range
|
|
|
|
|
|
Earnings (loss) before income taxes
|
|
|
(500
|
)
|
|
|
5,000
|
|
|
|
|
|
|
Income taxes
|
|
|
6,000
|
|
|
|
8,500
|
|
|
|
|
|
|
Net loss
|
|
|
(6,500
|
)
|
|
|
(3,500
|
)
|
|
|
|
|
|
Diluted loss per share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
Excluded items:
|
|
|
|
|
Purchased intangible asset amortization
|
|
|
24,000
|
|
|
|
24,000
|
|
Non-cash stock compensation
|
|
|
65,000
|
|
|
|
65,000
|
|
Gains, losses and other items, net
|
|
|
4,000
|
|
|
|
4,000
|
|
Separation and transformation costs
|
|
|
17,500
|
|
|
|
17,500
|
|
|
|
|
|
|
Total excluded items
|
|
|
110,500
|
|
|
|
110,500
|
|
|
|
|
|
|
Earnings before income taxes and excluding items
|
|
|
110,000
|
|
|
|
115,500
|
|
|
|
|
|
|
Income taxes (2)
|
|
|
44,000
|
|
|
|
45,600
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
|
66,000
|
|
|
|
69,900
|
|
|
|
|
|
|
Non-GAAP diluted earnings per share
|
|
$
|
0.80
|
|
|
$
|
0.85
|
|
|
|
|
|
|
Basic weighted average shares
|
|
|
79,500
|
|
|
|
79,500
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
|
82,500
|
|
|
|
82,500
|
|
(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 39.5% to 40.0%. The difference between our GAAP and Non-GAAP
tax rates was due to the effect of excluded items.
|
APPENDIX A
|
ACXIOM CORPORATION Q2 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.
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 expect to complete these current
projects in this 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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