ACXM Acxiom Holdngs (delisted)

Acxiom� Corporation (Nasdaq: ACXM) today reported full-year and fourth-quarter financial results for fiscal 2007 ended March 31, 2007, and also announced a new organizational alignment designed to increase focus on the company�s three core areas of business. The reported results, excluding unusual charges, met the Company�s expectations and consensus analysts� estimates of $.20 earnings per share for the quarter. Full 2007 fiscal-year results include revenue of $1.4 billion, income from operations of $158.8 million and diluted earnings per share of $.84. These results include the impact in the fourth quarter of unusual charges that reduced diluted EPS for the fourth quarter and full fiscal year by $.12. Fourth-quarter results include revenue of $357.3 million, income from operations of $29.3 million, diluted earnings per share of $.08, operating cash flow of $76.5 million and free cash flow available to equity of $15.4 million. Acxiom will hold a conference call at 6:45 p.m. CDT today to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. Acxiom�s new organizational structure reflects the unique characteristics within each area of the business and will facilitate the execution of operational strategies designed to maximize financial performance in each division. The re-segmentation took effect April 1, 2007, the first day of the company�s fiscal year 2008. �This change is all about bringing focus and dedicated management to each key area of our business,� Acxiom chairman and chief executive Charles D. Morgan said. �We believe this structure more closely aligns with our overall mission and therefore will lead to greater returns for our shareholders.� Acxiom is composed of, and will report financial results by, three divisions under a single company umbrella. Those divisions, chief executives, and business characteristics include: Acxiom Services Division � Lee Hodges, chief executive: The division develops, sells and delivers industry-tailored solutions globally through the integration of products, services and consulting. The primary target market is the Fortune 1000 and other large global firms. This division is responsible for Acxiom�s marketing database solutions, customer data integration (CDI) offerings, e-mail and internet search marketing services, consulting and professional services, and the Business Information Grid (BIG) non-hosted solutions that will be offered in fiscal 2008, utilizing a client-intimate engagement model characterized by long-term client relationships. Acxiom Information Products Division � Alex Dietz, chief executive: The division develops and sells all data and risk mitigation products, including InfoBase�, Personicx� and InsightIdentify in the U.S. as well as all Acxiom European Data Products. It focuses on product development, product lifecycle management, data content management and innovation. Its primary go-to-market channels are the Acxiom Services Division for Fortune 1000 clients, a direct sales force for the mid-tier and the broker and reseller market. Acxiom Infrastructure Management Division � Marty Sunde, chief executive: The division is fully responsible for developing and delivering Information Technology products and services that improve a company�s ability to manage its information technology deliver platform at lower costs and higher efficiencies. Such offerings include traditional IT outsourcing and transformational solutions such as the Acxiom data factory. The division primarily focuses on supporting an entire infrastructure for high growth, emerging companies, or specific components of larger enterprise IT organizations. Operational excellence and efficient asset and capital management practices characterize this division. �At this point in Acxiom�s evolution, re-segmenting our company into three autonomous but very tightly connected divisions creates a business that can be more effectively and efficiently managed,� Morgan said. �We�ll be able to make better-targeted investment and operational decisions in each area, and the added transparency into our financial performance will provide more clarity � internally and externally.� Acxiom also announced that it has hired Chris Wolf to become the company�s Chief Financial Officer. Wolf will begin working at Acxiom in a few weeks and will transition into the CFO role over the next few months. Wolf most recently has served as a senior advisor at Boulder Specialty Brands and previously was executive vice president and CFO at Catalina Marketing Corporation. Acxiom�s fiscal 2007 highlights include: Revenue of $1.40 billion, up 4.7 percent from $1.33 billion a year ago, an increase of $63 million in annual revenue. Income from operations of $158.8 million, an increase of 21.1 percent compared to $131.1 million in fiscal 2006. Diluted earnings per share of $.84, up 18 percent from $.71 the year before. Fiscal year results include the impact of pretax charges of $9.7 million and income tax expense of $3.8 million related to closing Acxiom�s business in Spain, cost of severance and retirement of debt in the U.S. and additional research tax credit reserves that reduced diluted EPS for the full fiscal year by $.12. Operating cash flow of $260.0 million and free cash flow available to equity of $55.2 million. The acquisition of Equitec, a business with strong marketing and merchandizing optimization expertise in the retail industry, based in Cleveland, Ohio. The acquisition of Harbinger Technologies Group, a McLean, Va.-based international consulting and technology firm that develops software tools and training programs for personnel involved in homeland defense, national security and the prevention of international terrorism. The acquisition of Kefta, the leading company for real-time, dynamic personalization solutions for the Internet, based in San Francisco. Acxiom�s fourth-quarter highlights include: Revenue of $357.3 million, a 4 percent increase over $344.3 million in the fourth quarter of fiscal 2006. Income from operations of $29.3 million, a 34 percent decrease from $44.6 million the year before. Diluted earnings per share of $.08, down 69 percent from $.26 in the same period a year ago. The quarter results include the impact of pretax charges of $9.7 million and income tax expense of $3.8 million related to closing Acxiom�s business in Spain, cost of severance and retirement of debt in the U.S. and additional research tax credit reserves that reduced diluted EPS for the fourth quarter by $.12. Operating cash flow of $76.5 million and free cash flow available to equity of $15.4 million. Free cash flow available to equity is a non-GAAP financial measure, and a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release. Fiscal 2007 Recognition In fiscal 2007, Acxiom: Was named as one of the top 30 providers of financial services in the �FinTech 100� listing of the top technology providers as complied by American Banker and the research firm Financial Insights. Saw its Acxiom Digital business ranked No. 17 by Advertising Age magazine on its list of top 50 interactive agencies based on annual U.S. revenues. Was included on Forbes magazine�s �Platinum 400� list of the best large publicly traded companies in America. Outlook Acxiom�s Board of Directors has approved a business plan for fiscal 2008 of $1.02 in earnings per share. The Company continues to focus on its initiatives to improve performance and is in the process of restructuring into the three new divisions previously explained. About Acxiom Acxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom�s innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and Europe, and in Australia, China and Canada. For more information, visit www.acxiom.com. This release and today�s conference call contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially. Such statements may include but are not necessarily limited to the following: that we expect that our emphasis on revenue growth will lead to increased rates of revenue growth, that we expect that continued focus on expense controls will lead to continued improvement in operating margins, that the projected revenue, operating margin, return on assets and return on invested capital, operating cash flow and free cash flow, borrowings, dividends and other metrics will be within the estimated ranges; that the estimations of revenue, earnings, cash flow, growth rates, restructuring charges and expense reductions will be within the estimated ranges; and that the business pipeline and our anticipated cost structure will allow us to continue to meet or exceed revenue, cash flow and other projections. The following are important factors, among others, that could cause actual results to differ materially from these forward-looking statements: The possibility that certain contracts may not be closed, or may not be closed within the anticipated time frames; the possibility that clients may attempt to reduce the amount of business they do with the Company; the possibility that in the event that a change of control of the Company was sought that certain of the clients of the Company would invoke certain provisions in their contracts resulting in a decline in the revenue and profit of the Company; the possibility that certain contracts may not generate the anticipated revenue or profitability; the possibility that negative changes in economic or other conditions might lead to a reduction in demand for our products and services; the possibility of an economic slowdown or that economic conditions in general will not be as expected; the possibility that the historical seasonality of our business may change; the possibility that significant customers may experience extreme, severe economic difficulty; the possibility that the integration of acquired businesses may not be as successful as planned; 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 sales cycles may lengthen; the possibility that we may not be able to attract and retain qualified technical and leadership associates, or that we may lose key associates to other organizations; the possibility that we won�t be able to properly motivate our sales force or other associates; the possibility that we won�t be able to achieve cost reductions and avoid unanticipated costs; the possibility that we won�t be able to continue to receive credit upon satisfactory terms and conditions; the possibility that competent, competitive products, technologies or services will be introduced into the marketplace by other companies; the possibility that we may be subjected to pricing pressure due to market conditions and/or competitive 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 changes in accounting pronouncements may occur and may impact these projections; the possibility that we won�t be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there will be changes in the legislative, accounting, regulatory and consumer environments affecting our business, including but not limited to litigation, legislation, regulations and customs relating to our ability to collect, manage, aggregate and use data; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services; the possibility that we may enter into short-term contracts which would affect the predictability of our revenues; the possibility that the amount of ad hoc, volume-based and project work will not be as expected; the possibility that we may experience a loss of data center capacity or interruption of telecommunication links or power sources; the possibility that we may experience failures or breaches of our network and data security systems, leading to potential adverse publicity, negative customer reaction, or liability to third parties; the possibility that postal rates may increase, thereby leading to reduced volumes of business; the possibility that our clients may cancel or modify their agreements 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 we experience processing errors which result in credits to customers, re-performance of services or payment of damages to customers; the possibility that the services of the United States Postal Service, their global counterparts and other delivery systems may be disrupted; and the possibility that we may be affected by other competitive factors. With respect to the board-approved business plan, all of the above factors apply, along with the following which were assumptions made in creating the board-approved business plan: that the U.S. and global economies will continue to improve at a moderate pace; that global growth will continue to be strong and that globalization trends will continue to grow at an increasing pace; that Acxiom�s computer, communications and other equipment expenses will continue to fall as a percentage of revenue; that the Customer Information Infrastructure (CII) grid-based environment will continue to be implemented successfully over the next 3-4 years and that the new CII infrastructure will continue to provide increasing operational efficiencies; that the acquisitions of companies operating primarily outside of the United States will be successfully integrated and that significant efficiencies will be realized from this integration; relating to operating cash flow and free cash flow, that sufficient operating and capital lease arrangements will continue to be available to the Company to provide for the financing of most of its computer equipment and that software suppliers will continue to provide financing arrangements for most of the software purchases; relating to revolving credit line balance, that free cash flow will meet expectations and that the Company will use free cash flow to pay down bank debt, buy back stock and fund dividends; relating to annual dividends, that the board of directors will continue to approve quarterly dividends and will vote to increase dividends over time; relating to diluted shares, that the Company will meet its cash flow expectations and that potential dilution created through the issuance of equity instruments will be mitigated by continued stock repurchases in accordance with the Company�s stock repurchase program. 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. Other factors are detailed from time to time in our periodic reports and registration statements filed with the United States Securities and Exchange Commission. We believe that we have the product and technology offerings, facilities, associates and competitive and financial resources for continued business success, but future revenues, costs, margins and profits are all influenced by a number of factors, including those discussed above, all of which are inherently difficult to forecast. We undertake no obligation to update the information contained in this press release or any other forward-looking statement. Acxiom, InfoBase and Personicx are registered trademarks of Acxiom Corporation. � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � For the Three Months Ended March 31, 2007� 2006� $ Variance � % Variance � Revenue: Services 267,314� 257,591� 9,723� 3.8% Data 89,957� 86,752� 3,205� 3.7% Total revenue 357,271� 344,343� 12,928� 3.8% � Operating costs and expenses: Cost of revenue Services 209,830� 196,428� 13,402� 6.8% Data 52,991� 52,142� 849� 1.6% Total cost of revenue 262,821� 248,570� 14,251� 5.7% � Services gross margin 21.5% 23.7% Data gross margin 41.1% 39.9% Total gross margin 26.4% 27.8% � Selling, general and administrative 56,031� 51,642� 4,389� 8.5% Gains, losses and other items, net 9,122� (456) 9,578� 0.0% � Total operating costs and expenses 327,974� 299,756� 28,218� 9.4% � Income from operations 29,297� 44,587� (15,290) (34.3%) � Other income (expense): Interest expense (15,002) (7,531) (7,471) 99.2% Other, net 1,444� 135� 1,309� 969.6% � Total other income (expense) (13,558) (7,396) (6,162) 83.3% � Earnings before income taxes 15,739� 37,191� (21,452) (57.7%) � Income taxes 9,468� 14,132� (4,664) (33.0%) � Net earnings 6,271� 23,059� (16,788) (72.8%) � Earnings per share: � Basic 0.08� 0.27� (0.19) (70.4%) � Diluted 0.08� 0.26� (0.18) (69.2%) � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � For the Twelve Months Ended March 31, 2007� 2006� $ Variance � % Variance � Revenue: Services 1,061,103� 1,012,549� 48,554� 4.8% Data 334,033� 320,019� 14,014� 4.4% Total revenue 1,395,136� 1,332,568� 62,568� 4.7% � Operating costs and expenses: Cost of revenue Services 806,991� 772,162� 34,829� 4.5% Data 206,629� 201,950� 4,679� 2.3% Total cost of revenue 1,013,620� 974,112� 39,508� 4.1% � Services gross margin 23.9% 23.7% Data gross margin 38.1% 36.9% Total gross margin 27.3% 26.9% � Selling, general and administrative 213,849� 217,869� (4,020) (1.8%) Gains, losses and other items, net 8,897� 9,504� (607) 0.0% � Total operating costs and expenses 1,236,366� 1,201,485� 34,881� 2.9% � Income from operations 158,770� 131,083� 27,687� 21.1% � Other income (expense): Interest expense (46,632) (28,744) (17,888) 62.2% Other, net 5,933� 2,005� 3,928� 195.9% � Total other income (expense) (40,699) (26,739) (13,960) 52.2% � Earnings before income taxes 118,071� 104,344� 13,727� 13.2% � Income taxes 47,331� 40,216� 7,115� 17.7% � Net earnings 70,740� 64,128� 6,612� 10.3% � Earnings per share: � Basic 0.86� 0.73� 0.13� 17.8% � Diluted 0.84� 0.71� 0.13� 18.3% � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � For the Three Months Ended March 31, 2007 December 31, 2006 $ Variance � % Variance � Revenue: Services 267,314� 265,798� 1,516� 0.6% Data 89,957� 87,043� 2,914� 3.3% Total revenue 357,271� 352,841� 4,430� 1.3% � Operating costs and expenses: Cost of revenue Services 209,830� 199,704� 10,126� 5.1% Data 52,991� 53,004� (13) (0.0%) Total cost of revenue 262,821� 252,708� 10,113� 4.0% � Services gross margin 21.5% 24.9% Data gross margin 41.1% 39.1% Total gross margin 26.4% 28.4% � Selling, general and administrative 56,031� 49,065� 6,966� 14.2% Gains, losses and other items, net 9,122� (225) 9,347� 0.0% � Total operating costs and expenses 327,974� 301,548� 26,426� 8.8% � Income from operations 29,297� 51,293� (21,996) (42.9%) � Other income (expense): Interest expense (15,002) (14,911) (91) 0.6% Other, net 1,444� 1,157� 287� 24.8% � Total other income (expense) (13,558) (13,754) 196� (1.4%) � Earnings before income taxes 15,739� 37,539� (21,800) (58.1%) � Income taxes 9,468� 12,594� (3,126) (24.8%) � Net earnings 6,271� 24,945� (18,674) (74.9%) � Earnings per share: � Basic 0.08� 0.32� (0.24) (75.0%) � Diluted 0.08� 0.31� (0.23) (74.2%) � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) � For the Three Months Ended March 31, 2007 March 31, 2006 December 31, 2006 � Basic earnings per share: � Numerator - net earnings 6,271� 23,059� 24,945� � Denominator - weighted-average shares outstanding 78,385� 86,981� 77,717� � Basic earnings per share 0.08� 0.27� 0.32� � Diluted earnings per share: � Numerator - net earnings � Net earnings 6,271� 23,059� 24,945� � Denominator: � Weighted-average shares outstanding 78,385� 86,981� 77,717� � Dilutive effect of common stock options, warrants and restricted stock 1,750� 2,855� 2,238� � 80,135� 89,836� 79,955� � Diluted earnings per share 0.08� 0.26� 0.31� � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) � For the Twelve Months Ended March 31, 2007� 2006� � Basic earnings per share: � Numerator - net earnings 70,740� 64,128� � Denominator - weighted-average shares outstanding 82,564� 87,557� � Basic earnings per share 0.86� 0.73� � Diluted earnings per share: � Numerator - net earnings � Net earnings 70,740� 64,128� � Denominator: � Weighted-average shares outstanding 82,564� 87,557� � Dilutive effect of common stock options, warrants and restricted stock 2,115� 2,732� � 84,679� 90,289� � Diluted earnings per share 0.84� 0.71� � ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � For the Three Months Ended Revenue: March 31, 2007 March 31, 2006 December 31, 2006 � US services & data 305,778� 295,795� 298,978� International services & data 51,493� 48,548� 53,863� � Total revenue 357,271� 344,343� 352,841� � US supplemental information: Services & data excluding IT mgmt 217,474� 206,853� 211,312� IT management services 88,304� 88,942� 87,666� 305,778� 295,795� 298,978� � International supplemental information: Services & data excluding IT mgmt 51,493� 48,548� 53,863� � � Income from operations: � US services & data 32,771� 40,712� 46,832� International services & data 5,648� 3,419� 4,236� Corporate & other (9,122) 456� 225� � Total income from operations 29,297� 44,587� 51,293� � Margin: � US services & data 10.7% 13.8% 15.7% International services & data 11.0% 7.0% 7.9% � Total margin 8.2% 12.9% 14.5% � ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � For the Twelve Months Ended March 31, Revenue: 2007� 2006� � US services & data 1,196,379� 1,147,641� International services & data 198,757� 184,927� � Total revenue 1,395,136� 1,332,568� � US supplemental information: Services & data excluding IT mgmt 841,476� 796,506� IT management services 354,903� 351,135� 1,196,379� 1,147,641� � International supplemental information: Services & data excluding IT mgmt 198,757� 184,927� � � Income from operations: � US services & data 155,643� 135,840� International services & data 12,024� 4,746� Corporate & other (8,897) (9,503) � Total income from operations 158,770� 131,083� � Margin: � US services & data 13.0% 11.8% International services & data 6.0% 2.6% � Total margin 11.4% 9.8% � ACXIOM CORPORATION AND SUBSIDIARIES DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) � For the Three Months Ended March 31, 2007 March 31, 2006 $ Variance � % Variance December 31, 2006 $ Variance � % Variance � Data 69,596� 65,876� 3,720� 5.6% 68,520� 1,076� 1.6% Passthrough data 20,361� 20,576� (215) (1.0%) 18,523� 1,838� 9.9% � Total data revenue 89,957� 86,452� 3,505� 4.1% 87,043� 2,914� 3.3% � � Cost of data revenue: Data 32,630� 31,566� 1,064� 3.4% 34,481� (1,851) (5.4%) Passthrough data 20,361� 20,576� (215) (1.0%) 18,523� 1,838� 9.9% � Total cost of data 52,991� 52,142� 849� 1.6% 53,004� (13) (0.0%) � Margin: � Data 53.1% 52.1% 49.7% Passthrough data 0.0% 0.0% 0.0% Total data 41.1% 39.7% 39.1% � ACXIOM CORPORATION AND SUBSIDIARIES DATA REVENUE AND COST OF DATA SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) � For the Twelve Months Ended March 31, 2007� 2006� $ Variance � % Variance � Data 255,299� 243,630� 11,669� 4.8% Passthrough data 78,734� 76,389� 2,345� 3.1% � Total data revenue 334,033� 320,019� 14,014� 4.4% � � Cost of data revenue: Data 127,895� 125,561� 2,334� 1.9% Passthrough data 78,734� 76,389� 2,345� 3.1% � Total cost of data 206,629� 201,950� 4,679� 2.3% � Margin: � Data 49.9% 48.5% Passthrough data 0.0% 0.0% Total data 38.1% 36.9% � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) � March 31, 2007 March 31, 2006 $ Variance � % Variance Assets Current assets: Cash and cash equivalents 37,776� 7,705� 30,071� 390.3% Trade accounts receivable, net 285,850� 261,624� 24,226� 9.3% Refundable income taxes 7,657� -� 7,657� 100.0% Deferred income taxes 22,341� 24,587� (2,246) (9.1%) Other current assets 59,252� 44,937� 14,315� 31.9% � Total current assets 412,876� 338,853� 74,023� 21.8% � Property and equipment 733,175� 662,948� 70,227� 10.6% Less - accumulated depreciation and amortization 420,883� 329,177� 91,706� 27.9% � Property and equipment, net 312,292� 333,771� (21,479) (6.4%) � Software, net of accumulated amortization 44,289� 45,509� (1,220) (2.7%) Goodwill 522,046� 472,401� 49,645� 10.5% Purchased software licenses, net of accumulated amortization 151,326� 155,518� (4,192) (2.7%) Unbilled and notes receivable, excluding current portions 16,742� 19,139� (2,397) (12.5%) Deferred costs, net 137,684� 112,817� 24,867� 22.0% Data acquisition costs 35,398� 40,828� (5,430) (13.3%) Other assets, net 23,251� 21,662� 1,589� 7.3% � 1,655,904� 1,540,498� 115,406� 7.5% � Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term obligations 106,921� 93,518� 13,403� 14.3% Trade accounts payable 54,808� 44,144� 10,664� 24.2% Accrued payroll and related expenses 33,663� 32,139� 1,524� 4.7% Other accrued expenses 79,078� 81,428� (2,350) (2.9%) Deferred revenue 113,318� 123,916� (10,598) (8.6%) Income taxes -� 4,845� (4,845) (100.0%) � Total current liabilities 387,788� 379,990� 7,798� 2.1% � Long-term obligations: Long-term debt and capital leases, net of current installments 631,184� 353,692� 277,492� 78.5% Software and data licenses, net of current installments 17,695� 22,723� (5,028) (22.1%) � Total long-term obligations 648,879� 376,415� 272,464� 72.4% � � Deferred income taxes 97,926� 77,916� 20,010� 25.7% � Commitments and contingencies � Stockholders' equity: Common stock 11,145� 10,946� 199� 1.8% Additional paid-in capital 718,336� 677,026� 41,310� 6.1% Unearned stock-based compensation -� (1,941) 1,941� (100.0%) Retained earnings 462,844� 410,278� 52,566� 12.8% Accumulated other comprehensive income 17,526� 2,205� 15,321� 694.8% Treasury stock, at cost (688,540) (392,337) (296,203) 75.5% � Total stockholders' equity 521,311� 706,177� (184,866) (26.2%) � 1,655,904� 1,540,498� 115,406� 7.5% � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) � For the Three Months Ended March 31, 2007� � 2006� � Cash flows from operating activities: Net earnings 6,271� 23,059� Non-cash operating activities: Depreciation and amortization 59,187� 58,787� Loss (gain) on disposal or impairment of assets, net (235) (346) Deferred income taxes 17,102� (2,403) Tax benefit of stock options and warrants -� 19,097� Non-cash stock compensation expense 1,124� 345� Changes in operating assets and liabilities: Accounts receivable (14,372) (7,324) Other assets (16,942) (4,450) Accounts payable and other liabilities 11,804� (9,043) Deferred revenue 12,595� (3,564) Net cash provided by operating activities 76,534� 74,158� Cash flows from investing activities: Capitalized software (8,000) (5,217) Capital expenditures (8,230) (493) Deferral of costs (17,092) (15,956) Payments received from investments 50� 905� Net cash paid in acquisitions (18,667) (117) Net cash used by investing activities (51,939) (20,878) Cash flows from financing activities: Proceeds from debt -� 14,746� Payments of debt (77,928) (91,079) Dividends paid (4,703) (4,338) Sale of common stock 7,663� 27,007� Acquisition of treasury stock -� (1,905) Tax benefit of stock options exercised 61� -� Net cash used by financing activities (74,907) (55,569) Effect of exchange rate changes on cash 74� 88� � Net increase (decrease) in cash and cash equivalents (50,238) (2,201) Cash and cash equivalents at beginning of period 88,014� 9,906� Cash and cash equivalents at end of period 37,776� 7,705� � Supplemental cash flow information: Cash paid (received) during the period for: Interest 15,270� 9,553� Income taxes 6,569� 4,561� Payments on capital leases and installment payment arrangements 18,579� 18,342� Payments on software and data license liabilities 5,746� 5,459� Prepayment of debt 50,000� -� Other debt payments, excluding line of credit 3,603� 3,796� Noncash investing and financing activities: Acquisition of property and equipment under capital lease and installment payment arrangements 14,474� 14,884� Construction and other financing 213� 3,572� Software licenses and maintenance acquired under software obligation 8,305� 6,570� Note payable issued in acquisition 1,300� -� � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) � For the Twelve Months Ended March 31, 2007� � 2006� � Cash flows from operating activities: Net earnings 70,740� 64,128� Non-cash operating activities: Depreciation and amortization 229,566� 231,137� Gain on disposal or impairment of assets, net (1,718) (1,797) Deferred income taxes 16,127� 9,998� Tax benefit of stock options and warrants -� 19,097� Non-cash stock compensation expense 3,823� 1,313� Changes in operating assets and liabilities: Accounts receivable (30,140) (21,162) Other assets (19,101) (26,197) Accounts payable and other liabilities 3,960� (6,253) Deferred revenue (13,305) 5,569� Net cash provided by operating activities 259,952� 275,833� Cash flows from investing activities: Disposition of operations -� 4,844� Sale of assets -� 5,123� Capitalized software (27,443) (21,903) Capital expenditures (14,225) (6,848) Cash collected from the sale and license of software 10,000� 20,000� Deferral of costs (66,687) (70,454) Payments received from investments 2,758� 3,760� Net cash paid in acquisitions (33,067) (144,626) Net cash used by investing activities (128,664) (210,104) Cash flows from financing activities: Proceeds from debt 649,756� 437,868� Payments of debt (471,670) (307,120) Dividends paid (18,174) (17,406) Sale of common stock 33,464� 58,616� Acquisition of treasury stock (299,301) (233,770) Tax benefit of stock options exercised 4,142� -� Net cash used by financing activities (101,783) (61,812) Effect of exchange rate changes on cash 566� (397) � Net increase in cash and cash equivalents 30,071� 3,520� Cash and cash equivalents at beginning of period 7,705� 4,185� Cash and cash equivalents at end of period 37,776� 7,705� � Supplemental cash flow information: Cash paid (received) during the period for: Interest 46,645� 27,958� Income taxes 37,596� 4,185� Payments on capital leases and installment payment arrangements 76,135� 72,232� Payments on software and data license liabilities 26,897� 29,069� Prepayment of debt 50,000� -� Other debt payments, excluding line of credit 10,235� 9,302� Noncash investing and financing activities: Issuance of options for acquisition -� 7,541� Acquisition of property and equipment under capital lease and installment payment arrangements 58,928� 85,261� Construction and other financing 18,380� 10,772� Software licenses and maintenance acquired under software obligation 23,571� 14,950� Issuance of common stock for acquisition 3,610� -� Note payable issued in acquisition 1,300� -� � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands) � � 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � YTD FY2007 � Net cash provided by operating activities 61,476� 44,785� 95,414� 74,158� 275,833� 56,350� 64,409� 62,659� 76,534� 259,952� Less: Tax benefit of stock options and warrants -� � -� � -� � (19,097) � (19,097) -� � -� � -� � -� � -� � Subtotal 61,476� 44,785� 95,414� 55,061� 256,736� 56,350� 64,409� 62,659� 76,534� 259,952� � Plus: Proceeds received from the disposition of operations -� 1,529� 3,315� -� 4,844� -� -� -� -� -� Proceeds received from the disposition of assets -� 3,613� 1,510� -� 5,123� -� -� -� -� -� Payments received from investments 721� 41� 2,093� 905� 3,760� 783� 1,925� -� 50� 2,758� Less: Capitalized software (5,673) (5,809) (5,204) (5,217) (21,903) (5,719) (6,926) (6,798) (8,000) (27,443) Capital expenditures (2,929) (3,025) (401) (493) (6,848) (217) (3,260) (2,518) (8,230) (14,225) Deferral of costs (16,192) (18,703) (19,603) (15,956) (70,454) (16,887) (16,559) (16,149) (17,092) (66,687) Payments on capital leases and installment payment arrangements (19,929) (15,967) (17,994) (18,342) (72,232) (18,905) (21,951) (16,700) (18,579) (76,135) Payments on software and data license liabilities (10,938) (5,328) (7,344) (5,459) (29,069) (7,847) (7,304) (6,000) (5,746) (26,897) Other required debt payments (1,357) � (2,434) � (1,715) � (3,796) � (9,302) (1,711) � (1,804) � (3,117) � (3,603) � (10,235) � Subtotal 5,179� (1,298) 50,071� 6,703� 60,655� 5,847� 8,530� 11,377� 15,334� 41,088� � Plus: Tax benefit of stock options and warrants -� � -� � -� � 19,097� � 19,097� 1,079� � 1,765� � 1,237� � 61� � 4,142� � Subtotal 5,179� (1,298) 50,071� 25,800� 79,752� 6,926� 10,295� 12,614� 15,395� 45,230� � Plus: Cash collected from sale of software -� � -� � 20,000� � -� � 20,000� 5,000� 5,000� -� -� 10,000� � Total 5,179� � (1,298) � 70,071� � 25,800� � 99,752� 11,926� � 15,295� � 12,614� � 15,395� � 55,230� � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � � � Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � FY2007 % � $ % � $ Revenue: Services 238,499� 253,193� 263,266� 257,591� 1,012,549� 261,892� 266,099� 265,798� 267,314� 1,061,103� 3.8% 9,723� 4.8% 48,554� Data 71,772� � 77,330� � 84,165� � 86,752� � 320,019� 74,813� � 82,220� � 87,043� � 89,957� � 334,033� 3.7% � 3,205� 4.4% � 14,014� Total revenue 310,271� 330,523� 347,431� 344,343� 1,332,568� 336,705� 348,319� 352,841� 357,271� 1,395,136� 3.8% 12,928� 4.7% 62,568� � Operating costs and expenses: Cost of revenue Services 194,349� 191,883� 189,502� 196,428� 772,162� 196,073� 201,384� 199,704� 209,830� 806,991� 6.8% 13,402� 4.5% 34,829� Data 48,885� � 52,124� � 48,799� � 52,142� � 201,950� 49,572� � 51,062� � 53,004� � 52,991� � 206,629� 1.6% � 849� 2.3% � 4,679� Total cost of revenue 243,234� 244,007� 238,301� 248,570� 974,112� 245,645� 252,446� 252,708� 262,821� 1,013,620� 5.7% 14,251� 4.1% 39,508� � � Selling, general and administrative 53,700� 54,902� 57,625� 51,642� 217,869� 54,745� 54,008� 49,065� 56,031� 213,849� 8.5% 4,389� -1.8% (4,020) Gains, losses and other items, net (1,637) � 12,799� � (1,202) � (456) � 9,504� 0� � 0� � (225) � 9,122� � 8,897� -2100.4% � 9,578� -6.4% � (607) � Total operating costs and expenses 295,297� 311,708� 294,724� 299,756� 1,201,485� 300,390� 306,454� 301,548� 327,974� 1,236,366� 9.4% 28,218� 2.9% 34,881� � Income from operations 14,974� 18,815� 52,707� 44,587� 131,083� 36,315� 41,865� 51,293� 29,297� 158,770� -34.3% (15,290) 21.1% 27,687� % Margin 4.8% 5.7% 15.2% 12.9% 9.8% 10.8% 12.0% 14.5% 8.2% 11.4% Other income (expense) Interest expense (5,162) (7,416) (8,635) (7,531) (28,744) (7,769) (8,950) (14,911) (15,002) (46,632) 99.2% (7,471) 62.2% (17,888) Other, net 891� � 1,050� � (71) � 135� � 2,005� 647� � 2,685� � 1,157� � 1,444� � 5,933� 969.6% � 1,309� 195.9% � 3,928� Total other income (expense) (4,271) (6,366) (8,706) (7,396) (26,739) (7,122) (6,265) (13,754) (13,558) (40,699) 83.3% (6,162) 52.2% (13,960) � Earnings before income taxes 10,703� 12,449� 44,001� 37,191� 104,344� 29,193� 35,600� 37,539� 15,739� 118,071� -57.7% (21,452) 13.2% 13,727� Income taxes 4,064� � 5,300� � 16,720� � 14,132� � 40,216� 11,385� � 13,884� � 12,594� � 9,468� � 47,331� -33.0% � (4,664) 17.7% � 7,115� � Net earnings 6,639� � 7,149� � 27,281� � 23,059� � 64,128� 17,808� � 21,716� � 24,945� � 6,271� � 70,740� -72.8% � (16,788) 10.3% � 6,612� � � Diluted earnings (loss) per share 0.07� � 0.08� � 0.31� � 0.26� � 0.71� 0.20� � 0.25� � 0.31� � 0.08� � 0.84� -69.2% � (0.18) 18.3% � 0.13� � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - INTERNAL FORMAT (Unaudited) (Dollars in thousands, except earnings per share) � � � Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � FY2007 % � $ % � $ � Revenue 310,271� 330,523� 347,431� 344,343� 1,332,568� 336,705� 348,319� 352,841� 357,271� 1,395,136� 3.8% 12,928� 4.7% 62,568� � Operating costs and expenses: � Salaries and benefits 126,264� 127,325� 129,888� 132,579� 516,056� 135,917� 139,557� 139,724� 154,801� 569,999� 16.8% 22,222� 10.5% 53,943� � Computer, communications and other equipment 77,647� 76,250� 73,614� 71,730� 299,241� 73,119� 72,685� 71,132� 73,409� 290,345� 2.3% 1,679� -3.0% (8,896) � Data costs 41,831� 44,752� 42,021� 44,593� 173,197� 43,372� 44,196� 43,761� 42,569� 173,898� -4.5% (2,024) 0.4% 701� � Other operating costs and expenses 51,192� 50,582� 50,403� 51,310� 203,487� 47,982� 50,016� 47,156� 48,071� 193,225� -6.3% (3,239) -5.0% (10,262) � Gains, losses and other items, net (1,637) � 12,799� � (1,202) � (456) � 9,504� -� � -� � (225) � 9,122� � 8,897� -2100.4% � 9,578� -6.4% � (607) � Total operating costs and expenses 295,297� � 311,708� � 294,724� � 299,756� � 1,201,485� 300,390� � 306,454� � 301,548� � 327,972� � 1,236,364� 9.4% � 28,216� 2.9% � 34,879� � Income (loss) from operations 14,974� � 18,815� � 52,707� � 44,587� � 131,083� 36,315� � 41,865� � 51,293� � 29,299� � 158,772� -34.3% � (15,288) 21.1% � 27,689� Operating Margin 4.8% 5.7% 15.2% 12.9% 9.8% 10.8% 12.0% 14.5% 8.2% 11.4% Other income (expense): Interest expense (5,162) (7,416) (8,635) (7,531) (28,744) (7,769) (8,950) (14,911) (15,002) (46,632) 99.2% (7,471) 62.2% (17,888) Other, net 891� � 1,050� � (71) � 135� � 2,005� 647� � 2,685� � 1,157� � 1,444� � 5,933� 969.6% � 1,309� 195.9% � 3,928� � (4,271) � (6,366) � (8,706) � (7,396) � (26,739) (7,122) � (6,265) � (13,754) � (13,558) � (40,699) 83.3% � (6,162) 52.2% � (13,960) � Earnings (loss) before income taxes 10,703� � 12,449� � 44,001� � 37,191� � 104,344� 29,193� � 35,600� � 37,539� � 15,741� � 118,073� -57.7% � (21,450) 13.2% � 13,729� � Income taxes 4,064� � 5,300� � 16,720� � 14,132� � 40,216� 11,385� � 13,884� � 12,594� � 9,468� � 47,331� -33.0% � (4,664) 17.7% � 7,115� � Net earnings (loss) 6,639� � 7,149� � 27,281� � 23,059� � 64,128� 17,808� � 21,716� � 24,945� � 6,273� � 70,742� -72.8% � (16,786) 10.3% � 6,614� � Diluted earnings (loss) per share 0.07� � 0.08� � 0.31� � 0.26� � 0.71� 0.20� � 0.25� � 0.31� � 0.08� � 0.84� -69.2% � (0.18) 18.3% � 0.13� � ACXIOM CORPORATION AND SUBSIDIARIES MARGIN ANALYSIS (Unaudited) � � � Q4 FY06 to Q4 FY07 FY06 to FY07 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � FY2007 % � $ % � $ � Gross profit 67,037� 86,516� 109,130� 95,773� 358,456� 91,060� 95,873� 100,133� 94,450� 381,516� -1.4% (1,323) 6.4% 23,060� Gross margin 21.6% 26.2% 31.4% 27.8% 26.9% 27.0% 27.5% 28.4% 26.4% 27.3% � Operating margin 4.8% 5.7% 15.2% 12.9% 9.8% 10.8% 12.0% 14.5% 8.2% 11.4% � Services gross profit 44,150� 61,310� 73,764� 61,163� 240,387� 65,819� 64,715� 66,094� 57,484� 254,112� -6.0% (3,679) 5.7% 13,725� Services gross margin 18.5% 24.2% 28.0% 23.7% 23.7% 25.1% 24.3% 24.9% 21.5% 23.9% � Data gross profit 22,887� 25,206� 35,366� 34,610� 118,069� 25,241� 31,158� 34,039� 36,966� 127,404� 6.8% 2,356� 7.9% 9,335� Data gross margin 31.9% 32.6% 42.0% 39.9% 36.9% 33.7% 37.9% 39.1% 41.1% 38.1% � ACXIOM CORPORATION AND SUBSIDIARIES EXPENSE TREND ANALYSIS (Unaudited) � � � � � 06/30/05� � 09/30/05� � 12/31/05� � 03/31/06� � FY2006 06/30/06� � 09/30/06� � 12/31/06� � 03/31/07� � FY2007 � Salaries and benefits % of revenue 40.7% 38.5% 37.4% 38.5% 38.7% 40.4% 40.1% 39.6% 43.3% 40.9% � Computer, communications and other equipment % of revenue 25.0% 23.1% 21.2% 20.8% 22.5% 21.7% 20.9% 20.2% 20.5% 20.8% � Data costs % of revenue 13.5% 13.5% 12.1% 13.0% 13.0% 12.9% 12.7% 12.4% 11.9% 12.5% � Other operating costs and expenses % of revenue 16.5% 15.3% 14.5% 14.9% 15.3% 14.3% 14.4% 13.4% 13.5% 13.8% � Total operating costs and expenses % of revenue 95.2% 94.3% 84.8% 87.1% 90.2% 89.2% 88.0% 85.5% 91.8% 88.6% � SG&A % of revenue 17.3% 16.6% 16.6% 15.0% 16.3% 16.3% 15.5% 13.9% 15.7% 15.3% � ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON GAAP MEASURES (Unaudited) (Dollars in thousands, except earnings per share) � For the Three Months Ended March 31, 2007 GAAP Earnings Unusual Charges (1) Unusual Tax Adj (2) Earnings on Operations Excluding Unusual � Earnings before income taxes 15,739� 9,672� 0� 25,411� � Income taxes 9,468� 3,579� (3) (3,755) 9,292� � Net earnings 6,271� 6,093� 3,755� 16,119� � Diluted earnings per share $0.078� $0.076� $0.047� $0.201� � Tax rate 60% 37% 37% � (1) The unusual charges are $9.7 million in pretax charges, consisting of $6.6 million related to closing down Spain, $2.5 million in U.S. severance and $0.6 million in non cash write off of deferred cost associated with the $50 million pay down on the term loan. � (2) Unusual tax items net, primarily due to the non-deductibility of the majority of the Spain losses and the adjustment in the R&D tax credit reserve. � (3) Nominal tax rate of 37%. � � For the Twelve Months Ended March 31, 2007 GAAP Earnings Unusual Charges (1) Unusual Tax Adj (2) Earnings on Operations Excluding Unusual � Earnings before income taxes 118,071� 9,672� 0� 127,743� � Income taxes 47,331� 3,579� (3) (3,755) 47,155� � Net earnings 70,740� 6,093� 3,755� 80,588� � Diluted earnings per share $0.835� $0.072� $0.044� $0.952� � Tax rate 40% 37% 37% � (1) The unusual charges are $9.7 million in pretax charges, consisting of $6.6 million related to closing down Spain, $2.5 million in U.S. severance and $0.6 million in non cash write off of deferred cost associated with the $50 million pay down on the term loan. � (2) Unusual tax items net, primarily due to the non-deductibility of the majority of the Spain losses and the adjustment in the R&D tax credit reserve. � (3) Nominal tax rate of 37%. � ACXIOM CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON GAAP MEASURES USING 37% NOMINAL TAX RATE (Unaudited) (Dollars in thousands, except earnings per share) � For the Three Months Ended March 31, 2007 (A) GAAP Earnings (B) GAAP Pretax at Nominal Tax Rate (C) Unusual Charges (1) (B) + (C) Earnings on Operations Excluding Unusual � Earnings before income taxes 15,739� 15,739� 9,672� 25,411� � Income taxes 9,468� 5,823� 3,579� (3) 9,402� � Net earnings 6,271� 9,916� 6,093� 16,009� � Diluted earnings per share $0.078� $0.124� $0.076� $0.200� (2) � Tax rate 60% 37% 37% 37% � (1) The unusual charges are $9.7 million in pretax charges, consisting of $6.6 million related to closing down Spain, $2.5 million in U.S. severance and $0.6 million in non cash write off of deferred cost associated with the $50 million pay down on the term loan. � (2) Calculated using $16,009 in net income and 80,135,000 shares. � (3) Nominal tax rate of 37%. � � For the Twelve Months Ended March 31, 2007 (A) GAAP Earnings (B) GAAP Pretax at Nominal Tax Rate (C) Unusual Charges (1) (B) + (C) Earnings on Operations Excluding Unusual � Earnings before income taxes 118,071� 118,071� 9,672� 127,743� � Income taxes 47,331� 43,686� 3,579� (3) 47,265� � Net earnings 70,740� 74,385� 6,093� 80,478� � Diluted earnings per share $0.835� $0.878� $0.072� $0.950� (2) � Tax rate 40% 37% 37% 37% � (1) The unusual charges are $9.7 million in pretax charges, consisting of $6.6 million related to closing down Spain, $2.5 million in U.S. severance and $0.6 million in non cash write off of deferred cost associated with the $50 million pay down on the term loan. � (2) Calculated using $80,478 in net income and 84,649,000 shares. � (3) Nominal tax rate of 37%.