ACXM Acxiom Holdngs (delisted)

Acxiom(R) Corporation (NASDAQ: ACXM) today announced financial results for the second quarter of its 2009 fiscal year ended September 30, 2008. Acxiom will hold a conference call at 4:30 p.m. CDT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. Revenue for the second quarter of fiscal 2009 was $328.9 million, compared to $348.9 million in the second quarter of fiscal 2008. Income from operations for the quarter ended September 30, 2008 was $34.3 million, compared with $18.2 million for the period ended September 30, 2007. Earnings per diluted share for the quarter were $0.20, versus earnings of $0.11 per diluted share in the prior-year period. The current-year quarter included unusual gain items of $2.4 million. The prior-year quarter included unusual loss items of $14.8 million. If unusual items were excluded, earnings per diluted share would be $0.18 and $0.15 in the current quarter and prior-year quarter, respectively. For the six-month period ended September 30, 2008, revenue totaled $660.0 million, versus $683.5 million for the comparable prior-year period. Income from operations for the current six-month period was $59.9 million, compared to $18.8 million for the six months ended September 30, 2007. Earnings per diluted share were $.34 for the six months ended September 30, 2008 versus a loss of $.06 per diluted share in the prior-year six-month period. The current-year period includes unusual gain items of $4.0 million. The prior-year period includes the impact of $35.4 million in unusual expense items. Excluding unusual items, earnings per diluted share would be $.31 and $.21 in the current six-month period and prior-year six-month period, respectively. John Meyer, Acxiom Corporation's Chief Executive Officer and President, commented, "Overall, I am satisfied with our second quarter results. We have reduced our operating expenses and improved our operating cash flow in this difficult economic environment. We are focused on managing the business efficiently during these challenging times while we implement the strategies and measures in our global sales organization that we believe will lead to renewed revenue growth for Acxiom." Second Quarter 2009 Highlights: -- Revenue of $328.9 million compared to $348.9 million in the second quarter a year ago. -- Income from operations of $34.3 million compared to $18.2 million in the second quarter last year. Income from operations for the current year included unusual gain items of $2.4 million. The prior year quarter included $14.8 million of unusual expense items. -- Earnings per diluted share of $0.20 compared to earnings per diluted share of $0.11 in the second quarter of fiscal 2008. Excluding the impact of unusual items, earnings per diluted share would be $0.18 in the current period and $0.15 in the prior-year period. -- Operating cash flow of $86.8 million compared to $33.4 million in the second quarter a year ago. -- Free cash flow available to equity of $71.6 million compared to negative $11.3 million a year ago. Free cash flow available to equity in the current quarter includes the proceeds of $24.2 million from the sale of a building. Free cash flow available to equity is a non-GAAP financial measure; a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release. Operational Highlights: -- Information Services: This segment includes the company's global lines of business for Customer Data Integration (CDI) and Marketing Services, Digital Marketing Services, Information Technology Services, and Consulting Services. Revenue for the quarter was $233.6 million, compared to $245.0 million in the second quarter of the previous year. Operating income for the quarter was $40.6 million, compared to $35.9 million in the second quarter of fiscal 2008. Prior year amounts included $4.9 million of unusual charges. For the six months ended September 30, 2008, revenue totaled $470.3 million, compared to revenue for the prior-year six-month period of $485.4 million. Operating income for the current six-month period equaled $79.3 million versus $69.9 million for the six-month period ended September 30, 2007. The prior-year six-month period included unusual charges of $10.0 million. -- Information Products: This segment is comprised of the company's global Information Products lines of business and the U.S. Background Screening Products line of business. Revenue for the quarter was $95.3 million, compared with $103.8 million in the second quarter of the previous year. Operating income for the quarter was $8.5 million, compared to $11.7 million in the second quarter of the previous year. Revenue for the six months ended September 30, 2008 was $189.7 million compared to $198.1 million for the prior-year six-month period. Operating income for the current-year six-month period was $13.1 million compared to operating income of $13.8 million for the six-month period ended September 30, 2007. -- Corporate and Other Expenses: For the quarter ended September 30, 2008, corporate and other expenses totaled $14.8 million, compared to $29.3 million for the period ended September 30, 2007. The current quarter includes unusual gain items of $2.4 million. The prior period included unusual expense items of $9.9 million. For the six months ended September 30, 2008, corporate and other expenses totaled $32.5 million, compared to $64.9 million for the period ended September 30, 2007. The current period includes unusual gain items of $2.9 million. The prior period included unusual expense items of $25.3 million. Other Second Quarter Highlights -- During the quarter, the company completed the acquisition of the Database Marketing Solutions division of ChoicePoint Precision Marketing LLC, a subsidiary of ChoicePoint Inc. for a purchase price of $9.0 million. With the purchase, Acxiom added seven clients from multiple industries - including banking, insurance and media - who will benefit from Acxiom's data integration, analytics, data and multi-channel marketing capabilities worldwide. -- The company completed the acquisition of the direct marketing technology unit of Alvion, LLC for a purchase price of $3.6 million. With this acquisition, Acxiom obtained a proven online marketing list fulfillment platform that can be used by small and medium size businesses that need immediate access to marketing information through a software-as-a-service environment. The platform can also be used on an OEM basis by information product resellers and by larger Acxiom clients that have their own broker networks and rely on quality marketing information. Outlook The company provided its outlook for fiscal 2009 at an investor conference on June 17 and affirmed the guidance on July 30, 2008. Based on current results and future expectations, the company is revising its revenue and free cash flow to equity estimates for the current year. The expectation for earnings per diluted share remains the same. Updated estimates for fiscal 2009 are as follows: -- Revenue is expected to be in the range of $1.3 billion to $1.34 billion. -- Earnings per diluted share, excluding unusual items, are expected to be in the range of $0.66 to $0.72. -- Free cash flow to equity, which is a non-GAAP measure, is expected to be in the range of $85 million to $95 million. Web Link to Financials http://www.acxiom.com/FY09_Q2_Financials is a link to the detailed financial information we typically attach to our earnings releases. About Acxiom Corporation The global leader in interactive marketing services, Acxiom connects clients with their customers through deep consumer insight, powering effective and profitable marketing initiatives and business decisions. Our consultative approach spans multiple industries and incorporates decades of experience in consumer data and analytics, information technology, data integration and consulting solutions for effective marketing across digital, Internet, email, mobile and direct mail channels. Founded in 1969, Acxiom is headquartered in Little Rock, Ark., and serves clients around the world from locations in the United States, Europe and Asia-Pacific. For more information about Acxiom, visit www.acxiom.com. Forward Looking Statement 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 the projected revenue, earnings per share and free cash flow to equity will be within the estimated ranges for fiscal year 2009. The following are 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 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 is a registered trademark of Acxiom Corporation. -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Three Months Ended September 30, ----------------------------------- $ % 2008 2007 Variance Variance -------- -------- ----------------- Revenue: Services 233,605 245,033 (11,428) (4.7%) Products 95,330 103,821 (8,491) (8.2%) -------- -------- Total revenue 328,935 348,854 (19,919) (5.7%) Operating costs and expenses: Cost of revenue Services 180,986 196,333 15,347 7.8% Products 77,038 81,802 4,764 5.8% -------- -------- Total cost of revenue 258,024 278,135 20,111 7.2% Services gross margin 22.5% 19.9% Products gross margin 19.2% 21.2% Total gross margin 21.6% 20.3% Selling, general and administrative 38,988 42,602 3,614 8.5% Gains, losses and other items, net (2,370) 9,932 12,302 123.9% -------- -------- Total operating costs and expenses 294,642 330,669 36,027 10.9% -------- -------- Income from operations 34,293 18,185 16,108 88.6% -------- -------- Other income (expense): Interest expense (8,591) (13,842) 5,251 37.9% Other, net 287 1,331 (1,044) (78.4%) -------- -------- Total other income (expense) (8,304) (12,511) 4,207 33.6% -------- -------- Earnings before income taxes 25,989 5,674 20,315 358.0% Income taxes 10,136 (3,521) (13,657) (387.9%) -------- -------- Net earnings 15,853 9,195 6,658 72.4% ======== ======== Earnings per share: Basic 0.20 0.11 0.09 81.8% ======== ======== Diluted 0.20 0.11 0.09 81.8% ======== ======== *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Six Months Ended September 30, ----------------------------------- $ % 2008 2007 Variance Variance -------- -------- ----------------- Revenue: Services 470,300 485,425 (15,125) (3.1%) Products 189,708 198,098 (8,390) (4.2%) -------- -------- Total revenue 660,008 683,523 (23,515) (3.4%) Operating costs and expenses: Cost of revenue Services 359,847 390,935 31,088 8.0% Products 154,755 163,805 9,050 5.5% -------- -------- Total cost of revenue 514,602 554,740 40,138 7.2% Services gross margin 23.5% 19.5% Products gross margin 18.4% 17.3% Total gross margin 22.0% 18.8% Selling, general and administrative 88,470 84,637 (3,833) (4.5%) Gains, losses and other items, net (2,915) 25,322 28,237 111.5% -------- -------- Total operating costs and expenses 600,157 664,699 64,542 9.7% -------- -------- Income from operations 59,851 18,824 41,027 218.0% -------- -------- Other income (expense): Interest expense (18,050) (27,417) 9,367 34.2% Other, net 1,646 1,514 132 8.7% -------- -------- Total other income (expense) (16,404) (25,903) 9,499 36.7% -------- -------- Earnings (loss) before income taxes 43,447 (7,079) 50,526 713.7% Income taxes 16,944 (2,584) (19,528) (755.7%) -------- -------- Net earnings (loss) 26,503 (4,495) 30,998 689.6% ======== ======== Earnings (loss) per share: Basic 0.34 (0.06) 0.40 666.7% ======== ======== Diluted 0.34 (0.06) 0.40 666.7% ======== ======== *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) For the Three Months Ended --------------------------- September 30, September 30, 2008 2007 ------------- ------------- Basic earnings per share: Numerator - net earnings (loss) 15,853 9,195 Denominator - weighted-average shares outstanding 77,716 80,646 ------------- ------------- Basic earnings (loss) per share 0.20 0.11 ============= ============= Diluted earnings per share: Numerator - net earnings (loss) 15,853 9,195 Denominator - weighted-average shares outstanding 77,716 80,646 Dilutive effect of common stock options, warrants and restricted stock 447 1,839 ------------- ------------- 78,163 82,485 ------------- ------------- Diluted earnings (loss) per share 0.20 0.11 ============= ============= *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) For the Six Months Ended --------------------------- September 30, September 30, 2008 2007 ------------- ------------- Basic earnings per share: Numerator - net earnings (loss) 26,503 (4,495) Denominator - weighted-average shares outstanding 77,559 79,993 ------------- ------------- Basic earnings (loss) per share 0.34 (0.06) ============= ============= Diluted earnings per share: Numerator - net earnings (loss) 26,503 (4,495) Denominator - weighted-average shares outstanding 77,559 79,993 Dilutive effect of common stock options, warrants and restricted stock 400 - ------------- ------------- 77,959 79,993 ------------- ------------- Diluted earnings (loss) per share 0.34 (0.06) ============= ============= *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) For the Three Months Ended --------------------------- September 30, September 30, Revenue: 2008 2007 ------------- ------------- Information services 233,605 245,033 Information products 95,330 103,821 ------------- ------------- Total revenue 328,935 348,854 ============= ============= Income from operations: Information services 40,649 35,859 Information products 8,485 11,674 Corporate & other (14,841) (29,348) ------------- ------------- Total income from operations 34,293 18,185 ============= ============= Margin: Information services 17.4% 14.6% Information products 8.9% 11.2% Total margin 10.4% 5.2% *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) For the Six Months Ended --------------------------- September 30, September 30, Revenue: 2008 2007 ------------- ------------- Information services 470,300 485,425 Information products 189,708 198,098 ------------- ------------- Total revenue 660,008 683,523 ============= ============= Income from operations: Information services 79,275 69,929 Information products 13,063 13,838 Corporate & other (32,487) (64,943) ------------- ------------- Total income from operations 59,851 18,824 ============= ============= Margin: Information services 16.9% 14.4% Information products 6.9% 7.0% Total margin 9.1% 2.8% *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES PRODUCTS REVENUE AND COST OF PRODUCTS SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) For the Three Months Ended --------------------------------------------- September 30, September 30, $ % 2008 2007 Variance Variance ------------- ------------- ----------------- Products 73,782 83,982 (10,200) (12.1%) Passthrough data 21,548 19,839 1,709 8.6% ------------- ------------- Total products revenue 95,330 103,821 (8,491) (8.2%) ============= ============= Cost of products revenue: Products 55,490 61,963 6,473 10.4% Passthrough data 21,548 19,839 (1,709) (8.6%) ------------- ------------- Total cost of products 77,038 81,802 4,764 5.8% ============= ============= Margin: Products 24.8% 26.2% Passthrough data 0.0% 0.0% Total products 19.2% 21.2% *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES PRODUCTS REVENUE AND COST OF PRODUCTS SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) For the Six Months Ended --------------------------------------------- September 30, September 30, $ % 2008 2007 Variance Variance ------------- ------------- ----------------- Products 145,946 158,667 (12,721) (8.0%) Passthrough data 43,762 39,431 4,331 11.0% ------------- ------------- Total products revenue 189,708 198,098 (8,390) (4.2%) ============= ============= Cost of products revenue: Products 110,993 124,374 13,381 10.8% Passthrough data 43,762 39,431 (4,331) (11.0%) ------------- ------------- Total cost of products 154,755 163,805 9,050 5.5% ============= ============= Margin: Products 23.9% 21.6% Passthrough data 0.0% 0.0% Total products 18.4% 17.3% *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30, March 31, $ % 2008 2008 Variance Variance ------------- ---------- ----------------- Assets --------------------------- Current assets: Cash and cash equivalents 93,370 62,661 30,709 49.0% Trade accounts receivable, net 220,147 216,462 3,685 1.7% Refundable income taxes 1,031 16,080 (15,049) (93.6%) Deferred income taxes 47,366 44,211 3,155 7.1% Other current assets 51,294 45,645 5,649 12.4% ------------- ---------- Total current assets 413,208 385,059 28,149 7.3% ------------- ---------- Property and equipment 737,299 765,046 (27,747) (3.6%) Less - accumulated depreciation and amortization 513,244 498,777 14,467 2.9% ------------- ---------- Property and equipment, net 224,055 266,269 (42,214) (15.9%) ------------- ---------- Software, net of accumulated amortization 56,371 59,263 (2,892) (4.9%) Goodwill 473,867 484,796 (10,929) (2.3%) Purchased software licenses, net of accumulated amortization 88,530 111,574 (23,044) (20.7%) Deferred costs, net 80,369 90,707 (10,338) (11.4%) Data acquisition costs 42,385 51,566 (9,181) (17.8%) Other assets, net 23,757 22,621 1,136 5.0% ------------- ---------- 1,402,542 1,471,855 (69,313) (4.7%) ============= ========== Liabilities and Stockholders' Equity --------------------------- Current liabilities: Current installments of long-term debt 49,243 69,259 (20,016) (28.9%) Trade accounts payable 35,954 45,749 (9,795) (21.4%) Accrued payroll and related expenses 39,762 39,061 701 1.8% Other accrued expenses 95,976 121,441 (25,465) (21.0%) Deferred revenue 57,626 64,116 (6,490) (10.1%) ------------- ---------- Total current liabilities 278,561 339,626 (61,065) (18.0%) ------------- ---------- Long-term debt 542,970 575,308 (32,338) (5.6%) Deferred income taxes 62,353 51,429 10,924 21.2% Other liabilities 5,169 4,980 189 3.8% Stockholders' equity: Common stock 11,490 11,428 62 0.5% Additional paid-in capital 791,388 779,815 11,573 1.5% Retained earnings 430,949 413,758 17,191 4.2% Accumulated other comprehensive income 17,500 33,976 (16,476) (48.5%) Treasury stock, at cost (737,838) (738,465) 627 (0.1%) ------------- ---------- Total stockholders' equity 513,489 500,512 12,977 2.6% ------------- ---------- 1,402,542 1,471,855 (69,313) (4.7%) ============= ========== *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, ----------------- 2008 2007 ----------------- Cash flows from operating activities: Net earnings (loss) 15,853 9,195 Non-cash operating activities: Depreciation and amortization 50,727 60,819 Loss (gain) on disposal or impairment of assets, net (1,131) (384) Deferred income taxes 5,138 (1,185) Non-cash stock compensation expense 3,628 1,672 Changes in operating assets and liabilities: Accounts receivable 4,923 (15,666) Other assets 11,439 2,178 Deferred costs (1,452) (7,227) Accounts payable and other liabilities 3,968 (196) Deferred revenue (6,290) (15,790) -------- -------- Net cash provided by operating activities 86,803 33,416 -------- -------- Cash flows from investing activities: Sale of assets 24,174 - Capitalized software (4,118) (9,820) Capital expenditures (7,245) (5,291) Data acquisition costs (6,507) (4,403) Payments received from investments 102 1,799 Net cash paid in acquisitions (12,668) (2,791) -------- -------- Net cash used by investing activities (6,262) (20,506) -------- -------- Cash flows from financing activities: Payments of debt (36,197) (27,346) Dividends paid (4,662) - Sale of common stock 2,641 6,281 Tax benefit of stock options exercised 55 344 -------- -------- Net cash used by financing activities (38,163) (20,721) -------- -------- Effect of exchange rate changes on cash (807) 262 -------- -------- Net increase (decrease) in cash and cash equivalents 41,571 (7,549) Cash and cash equivalents at beginning of period 51,799 61,380 -------- -------- Cash and cash equivalents at end of period 93,370 53,831 ======== ======== Supplemental cash flow information: Cash paid (received) during the period for: Interest 7,067 13,850 Income taxes (5,929) 96 Payments on capital leases and installment payment arrangements 11,204 17,651 Payments on software and data license liabilities 8,420 7,279 Other debt payments, excluding line of credit 2,073 2,416 Prepayment of debt 14,500 - Noncash investing and financing activities: Acquisition of property and equipment under capital lease and installment payment arrangements 3,835 8,498 Software licenses and maintenance acquired under software obligation 1,546 493 Note payable issued in acquisition - 300 *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, ----------------- 2008 2007 ----------------- Cash flows from operating activities: Net earnings (loss) 26,503 (4,495) Non-cash operating activities: Depreciation and amortization 104,620 119,921 Loss (gain) on disposal or impairment of assets, net (3,242) (74) Deferred income taxes 7,853 (3,741) Non-cash stock compensation expense 6,232 3,030 Changes in operating assets and liabilities: Accounts receivable (11,335) (4,446) Other assets 20,815 1,386 Deferred costs (2,068) (12,772) Accounts payable and other liabilities (27,328) (3,293) Deferred revenue (6,774) (28,513) -------- -------- Net cash provided by operating activities 115,276 67,003 -------- -------- Cash flows from investing activities: Sale of assets 24,174 - Capitalized software (9,129) (18,267) Capital expenditures (12,951) (8,158) Cash collected from sale of software 2,000 - Data acquisition costs (15,129) (12,987) Payments received from investments 2,596 1,799 Net cash paid in acquisitions (12,703) (5,471) -------- -------- Net cash used by investing activities (21,142) (43,084) -------- -------- Cash flows from financing activities: Proceeds from debt - 2,127 Payments of debt (59,501) (58,629) Dividends paid (9,312) - Sale of common stock 5,915 42,101 Tax benefit of stock options exercised 115 5,968 -------- -------- Net cash used by financing activities (62,783) (8,433) -------- -------- Effect of exchange rate changes on cash (642) 569 -------- -------- Net increase (decrease) in cash and cash equivalents 30,709 16,055 Cash and cash equivalents at beginning of period 62,661 37,776 -------- -------- Cash and cash equivalents at end of period 93,370 53,831 ======== ======== Supplemental cash flow information: Cash paid (received) during the period for: Interest 16,421 27,738 Income taxes (5,887) 211 Payments on capital leases and installment payment arrangements 24,083 36,788 Payments on software and data license liabilities 16,788 13,772 Other debt payments, excluding line of credit 4,130 5,942 Prepayment of debt 14,500 - Revolving credit payments - 2,127 Noncash investing and financing activities: Acquisition of property and equipment under capital lease and installment payment arrangements 5,659 15,720 Construction and other financing - 5,351 Software licenses and maintenance acquired under software obligation 1,546 493 Note payable issued in acquisition - 300 *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands) -------------------------------------------- YTD 06/30/07 09/30/07 12/31/07 03/31/08 FY2008 -------------------------------------------- Net cash provided by operating activities 33,587 33,416 122,269 78,534 267,806 Plus: Sale of assets - - - - - Payments received from investments - 1,799 1,804 - 3,603 Disposition of operations - - 14,250 - 14,250 Less: Capitalized software (8,447) (9,820) (8,507) (6,571) (33,345) Capital expenditures (2,867) (5,291) (6,891) (6,551) (21,600) Data acquisition costs (8,623) (4,403) (9,634) (9,503) (32,163) Payments on capital leases and installment payment arrangements (19,137) (17,651) (17,542) (15,376) (69,706) Payments on software and data license liabilities (6,493) (7,279) (6,226) (11,821) (31,819) Other required debt payments (3,526) (2,416) (5,612) (13,492) (25,046) -------------------------------------------- Subtotal (15,506) (11,645) 83,911 15,220 71,980 Plus: Tax benefit of stock options and warrants 5,624 344 25 (480) 5,513 -------------------------------------------- Subtotal (9,882) (11,301) 83,936 14,740 77,493 Plus: Cash collected from sale of software - - - - - -------------------------------------------- Total (9,882) (11,301) 83,936 14,740 77,493 ============================================ -------------------------- YTD 06/30/08 09/30/08 FY2009 -------------------------- Net cash provided by operating activities 28,473 86,803 115,276 Plus: Sale of assets - 24,174 24,174 Payments received from investments 2,494 102 2,596 Disposition of operations - - - Less: Capitalized software (5,011) (4,118) (9,129) Capital expenditures (5,706) (7,245) (12,951) Data acquisition costs (8,622) (6,507) (15,129) Payments on capital leases and installment payment arrangements (12,879) (11,204) (24,083) Payments on software and data license liabilities (8,368) (8,420) (16,788) Other required debt payments (2,057) (2,073) (4,130) -------------------------- Subtotal (11,676) 71,512 59,836 Plus: Tax benefit of stock options and warrants 60 55 115 -------------------------- Subtotal (11,616) 71,567 59,951 Plus: Cash collected from sale of software 2,000 - 2,000 -------------------------- Total (9,616) 71,567 61,951 ========================== *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) ---------------------------------------------- 06/30/07 09/30/07 12/31/07 03/31/08 FY2008 ---------------------------------------------- Revenue: Services 240,392 245,033 244,646 239,700 969,771 Products 94,277 103,821 106,113 110,097 414,308 ---------------------------------------------- Total revenue 334,669 348,854 350,759 349,797 1,384,079 Operating costs and expenses: Cost of revenue Services 194,602 196,333 188,659 225,776 805,370 Products 82,003 81,802 82,091 78,964 324,860 ---------------------------------------------- Total cost of revenue 276,605 278,135 270,750 304,740 1,130,230 Selling, general and administrative 42,035 42,602 46,118 46,496 177,251 Gains, losses and other items, net 15,390 9,932 (63,489) 74,519 36,352 ---------------------------------------------- Total operating costs and expenses 334,030 330,669 253,379 425,755 1,343,833 Income from operations 639 18,185 97,380 (75,958) 40,246 % Margin 0.2% 5.2% 27.8% -21.7% 2.9% Other income (expense) Interest expense (13,575) (13,842) (12,797) (11,016) (51,230) Other, net 183 1,331 1,394 (1,685) 1,223 ---------------------------------------------- Total other income (expense) (13,392) (12,511) (11,403) (12,701) (50,007) Earnings (loss) before income taxes (12,753) 5,674 85,977 (88,659) (9,761) Income taxes 937 (3,521) 30,977 (30,374) (1,981) ---------------------------------------------- Net earnings (loss) (13,690) 9,195 55,000 (58,285) (7,780) ============================================== Diluted earnings (loss) per share (0.17) 0.11 0.69 (0.76) (0.10) ============================================== Q2 FY08 to Q2 FY09 ----------------- ---------------- 06/30/08 09/30/08 % $ ----------------- ---------------- Revenue: Services 236,695 233,605 -4.7% (11,428) Products 94,378 95,330 -8.2% (8,491) ----------------- ---------------- Total revenue 331,073 328,935 -5.7% (19,919) Operating costs and expenses: Cost of revenue Services 178,861 180,986 7.8% 15,347 Products 77,717 77,038 5.8% 4,764 ----------------- ---------------- Total cost of revenue 256,578 258,024 7.2% 20,111 Selling, general and administrative 49,482 38,988 8.5% 3,614 Gains, losses and other items, net (545) (2,370) 123.9% 12,302 ----------------- ---------------- Total operating costs and expenses 305,515 294,642 10.9% 36,027 Income from operations 25,558 34,293 88.6% 16,108 % Margin 7.7% 10.4% Other income (expense) Interest expense (9,459) (8,591) 37.9% 5,251 Other, net 1,359 287 -78.4% (1,044) ----------------- ---------------- Total other income (expense) (8,100) (8,304) 33.6% 4,207 Earnings (loss) before income taxes 17,458 25,989 358.0% 20,315 Income taxes 6,808 10,136 -387.9% (13,657) ----------------- ---------------- Net earnings (loss) 10,650 15,853 72.4% 6,658 ================= ================ Diluted earnings (loss) per share 0.14 0.20 81.8% 0.09 ================= ================ *T -0- *T ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) --------------------------------------------- 06/30/07 09/30/07 12/31/07 03/31/08 FY2008 --------------------------------------------- Revenue: Services 240,392 245,033 244,646 239,700 969,771 Products 94,277 103,821 106,113 110,097 414,308 --------------------------------------------- Total revenue 334,669 348,854 350,759 349,797 1,384,079 ============================================= Income from Operations: Services 34,070 35,859 42,723 1,022 113,674 Products 2,164 11,674 12,047 19,858 45,743 Corporate & Other (35,595) (29,348) 42,610 (96,837) (119,170) --------------------------------------------- Total Income from Operations 639 18,185 97,380 (75,957) 40,247 ============================================= Margin: Services 14.2% 14.6% 17.5% 0.4% 11.7% Products 2.3% 11.2% 11.4% 18.0% 11.0% Total 0.2% 5.2% 27.8% -21.7% 2.9% Q2 FY08 to Q2 FY09 ----------------- --------------- 06/30/08 09/30/08 % $ ----------------- --------------- Revenue: Services 236,695 233,605 -4.7% (11,428) Products 94,378 95,330 -8.2% (8,491) ----------------- --------------- Total revenue 331,073 328,935 -5.7% (19,919) ================= =============== Income from Operations: Services 38,626 40,649 13.4% 4,790 Products 4,578 8,485 -27.3% (3,189) Corporate & Other (17,646) (14,841) -49.4% 14,507 ----------------- --------------- Total Income from Operations 25,558 34,293 88.6% 16,108 ================= =============== Margin: Services 16.3% 17.4% Products 4.9% 8.9% Total 7.7% 10.4% *T Acxiom� Corporation (NASDAQ: ACXM) today announced financial results for the second quarter of its 2009 fiscal year ended September 30, 2008. Acxiom will hold a conference call at 4:30 p.m. CDT today to further discuss this information. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com. Revenue for the second quarter of fiscal 2009 was $328.9 million, compared to $348.9 million in the second quarter of fiscal 2008. Income from operations for the quarter ended September 30, 2008 was $34.3 million, compared with $18.2 million for the period ended September 30, 2007. Earnings per diluted share for the quarter were $0.20, versus earnings of $0.11 per diluted share in the prior-year period. The current-year quarter included unusual gain items of $2.4 million. The prior-year quarter included unusual loss items of $14.8 million. If unusual items were excluded, earnings per diluted share would be $0.18 and $0.15 in the current quarter and prior-year quarter, respectively. For the six-month period ended September 30, 2008, revenue totaled $660.0 million, versus $683.5 million for the comparable prior-year period. Income from operations for the current six-month period was $59.9 million, compared to $18.8 million for the six months ended September 30, 2007. Earnings per diluted share were $.34 for the six months ended September 30, 2008 versus a loss of $.06 per diluted share in the prior-year six-month period. The current-year period includes unusual gain items of $4.0 million. The prior-year period includes the impact of $35.4 million in unusual expense items. Excluding unusual items, earnings per diluted share would be $.31 and $.21 in the current six-month period and prior-year six-month period, respectively. John Meyer, Acxiom Corporation�s Chief Executive Officer and President, commented, �Overall, I am satisfied with our second quarter results. We have reduced our operating expenses and improved our operating cash flow in this difficult economic environment. We are focused on managing the business efficiently during these challenging times while we implement the strategies and measures in our global sales organization that we believe will lead to renewed revenue growth for Acxiom.� Second Quarter 2009 Highlights: Revenue of $328.9 million compared to $348.9 million in the second quarter a year ago. Income from operations of $34.3 million compared to $18.2 million in the second quarter last year. Income from operations for the current year included unusual gain items of $2.4 million. The prior year quarter included $14.8 million of unusual expense items. Earnings per diluted share of $0.20 compared to earnings per diluted share of $0.11 in the second quarter of fiscal 2008. Excluding the impact of unusual items, earnings per diluted share would be $0.18 in the current period and $0.15 in the prior-year period. Operating cash flow of $86.8 million compared to $33.4 million in the second quarter a year ago. Free cash flow available to equity of $71.6 million compared to negative $11.3 million a year ago. Free cash flow available to equity in the current quarter includes the proceeds of $24.2 million from the sale of a building. Free cash flow available to equity is a non-GAAP financial measure; a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release. Operational Highlights: Information Services: This segment includes the company�s global lines of business for Customer Data Integration (CDI) and Marketing Services, Digital Marketing Services, Information Technology Services, and Consulting Services. Revenue for the quarter was $233.6 million, compared to $245.0 million in the second quarter of the previous year. Operating income for the quarter was $40.6 million, compared to $35.9 million in the second quarter of fiscal 2008. Prior year amounts included $4.9 million of unusual charges. For the six months ended September 30, 2008, revenue totaled $470.3 million, compared to revenue for the prior-year six-month period of $485.4 million. Operating income for the current six-month period equaled $79.3 million versus $69.9 million for the six-month period ended September 30, 2007. The prior-year six-month period included unusual charges of $10.0 million. Information Products: This segment is comprised of the company�s global Information Products lines of business and the U.S. Background Screening Products line of business. Revenue for the quarter was $95.3 million, compared with $103.8 million in the second quarter of the previous year. Operating income for the quarter was $8.5 million, compared to $11.7 million in the second quarter of the previous year. Revenue for the six months ended September 30, 2008 was $189.7 million compared to $198.1 million for the prior-year six-month period. Operating income for the current-year six-month period was $13.1 million compared to operating income of $13.8 million for the six-month period ended September 30, 2007. Corporate and Other Expenses: For the quarter ended September 30, 2008, corporate and other expenses totaled $14.8 million, compared to $29.3 million for the period ended September 30, 2007. The current quarter includes unusual gain items of $2.4 million. The prior period included unusual expense items of $9.9 million. For the six months ended September 30, 2008, corporate and other expenses totaled $32.5 million, compared to $64.9 million for the period ended September 30, 2007. The current period includes unusual gain items of $2.9 million. The prior period included unusual expense items of $25.3 million. Other Second Quarter Highlights During the quarter, the company completed the acquisition of the Database Marketing Solutions division of ChoicePoint Precision Marketing LLC, a subsidiary of ChoicePoint Inc. for a purchase price of $9.0 million. With the purchase, Acxiom added seven clients from multiple industries � including banking, insurance and media � who will benefit from Acxiom�s data integration, analytics, data and multi-channel marketing capabilities worldwide. The company completed the acquisition of the direct marketing technology unit of Alvion, LLC for a purchase price of $3.6 million. With this acquisition, Acxiom obtained a proven online marketing list fulfillment platform that can be used by small and medium size businesses that need immediate access to marketing information through a software-as-a-service environment. The platform can also be used on an OEM basis by information product resellers and by larger Acxiom clients that have their own broker networks and rely on quality marketing information. Outlook The company provided its outlook for fiscal 2009 at an investor conference on June 17 and affirmed the guidance on July 30, 2008. Based on current results and future expectations, the company is revising its revenue and free cash flow to equity estimates for the current year. The expectation for earnings per diluted share remains the same. Updated estimates for fiscal 2009 are as follows: Revenue is expected to be in the range of $1.3 billion to $1.34 billion. Earnings per diluted share, excluding unusual items, are expected to be in the range of $0.66 to $0.72. Free cash flow to equity, which is a non-GAAP measure, is expected to be in the range of $85 million to $95 million. Web Link to Financials http://www.acxiom.com/FY09_Q2_Financials is a link to the detailed financial information we typically attach to our earnings releases. About Acxiom Corporation The global leader in interactive marketing services, Acxiom connects clients with their customers through deep consumer insight, powering effective and profitable marketing initiatives and business decisions. Our consultative approach spans multiple industries and incorporates decades of experience in consumer data and analytics, information technology, data integration and consulting solutions for effective marketing across digital, Internet, email, mobile and direct mail channels. Founded in 1969, Acxiom is headquartered in Little Rock, Ark., and serves clients around the world from locations in the United States, Europe and Asia-Pacific. For more information about Acxiom, visit www.acxiom.com. Forward Looking Statement 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 the projected revenue, earnings per share and free cash flow to equity will be within the estimated ranges for fiscal year 2009. The following are 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 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 is a registered trademark of Acxiom Corporation. � � � � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � � For the Three Months Ended September 30, $ % 2008 � 2007 � Variance � Variance � Revenue: Services 233,605 245,033 (11,428 ) (4.7 %) Products 95,330 � 103,821 � (8,491 ) (8.2 %) Total revenue 328,935 348,854 (19,919 ) (5.7 %) � Operating costs and expenses: Cost of revenue Services 180,986 196,333 15,347 7.8 % Products 77,038 � 81,802 � 4,764 5.8 % Total cost of revenue 258,024 278,135 20,111 7.2 % � Services gross margin 22.5 % 19.9 % Products gross margin 19.2 % 21.2 % Total gross margin 21.6 % 20.3 % � Selling, general and administrative 38,988 42,602 3,614 8.5 % Gains, losses and other items, net (2,370 ) 9,932 � 12,302 123.9 % � Total operating costs and expenses 294,642 � 330,669 � 36,027 10.9 % � Income from operations 34,293 � 18,185 � 16,108 88.6 % � Other income (expense): Interest expense (8,591 ) (13,842 ) 5,251 37.9 % Other, net 287 � 1,331 � (1,044 ) (78.4 %) � Total other income (expense) (8,304 ) (12,511 ) 4,207 33.6 % � Earnings before income taxes 25,989 5,674 20,315 358.0 % � Income taxes 10,136 � (3,521 ) (13,657 ) (387.9 %) � Net earnings 15,853 � 9,195 � 6,658 72.4 % � Earnings per share: � Basic 0.20 � 0.11 � 0.09 81.8 % � Diluted 0.20 � 0.11 � 0.09 81.8 % � � � � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � � For the Six Months Ended September 30, $ % 2008 2007 Variance � Variance � Revenue: Services 470,300 485,425 (15,125 ) (3.1 %) Products 189,708 � 198,098 � (8,390 ) (4.2 %) Total revenue 660,008 683,523 (23,515 ) (3.4 %) � Operating costs and expenses: Cost of revenue Services 359,847 390,935 31,088 8.0 % Products 154,755 � 163,805 � 9,050 5.5 % Total cost of revenue 514,602 554,740 40,138 7.2 % � Services gross margin 23.5 % 19.5 % Products gross margin 18.4 % 17.3 % Total gross margin 22.0 % 18.8 % � Selling, general and administrative 88,470 84,637 (3,833 ) (4.5 %) Gains, losses and other items, net (2,915 ) 25,322 � 28,237 111.5 % � Total operating costs and expenses 600,157 � 664,699 � 64,542 9.7 % � Income from operations 59,851 � 18,824 � 41,027 218.0 % � Other income (expense): Interest expense (18,050 ) (27,417 ) 9,367 34.2 % Other, net 1,646 � 1,514 � 132 8.7 % � Total other income (expense) (16,404 ) (25,903 ) 9,499 36.7 % � Earnings (loss) before income taxes 43,447 (7,079 ) 50,526 713.7 % � Income taxes 16,944 � (2,584 ) (19,528 ) (755.7 %) � Net earnings (loss) 26,503 � (4,495 ) 30,998 689.6 % � Earnings (loss) per share: � Basic 0.34 � (0.06 ) 0.40 666.7 % � Diluted 0.34 � (0.06 ) 0.40 666.7 % � � � � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) � � For the Three Months Ended � September 30, September 30, 2008 2007 � Basic earnings per share: � Numerator - net earnings (loss) 15,853 9,195 � Denominator - weighted-average shares outstanding 77,716 80,646 � Basic earnings (loss) per share 0.20 0.11 � Diluted earnings per share: � Numerator - net earnings (loss) 15,853 9,195 � Denominator - weighted-average shares outstanding 77,716 80,646 � Dilutive effect of common stock options, warrants and restricted stock 447 1,839 � 78,163 82,485 � Diluted earnings (loss) per share 0.20 0.11 � � � � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except earnings per share) � � For the Six Months Ended � September 30, September 30, 2008 2007 � Basic earnings per share: � Numerator - net earnings (loss) 26,503 (4,495 ) � Denominator - weighted-average shares outstanding 77,559 79,993 � � Basic earnings (loss) per share 0.34 (0.06 ) � Diluted earnings per share: � Numerator - net earnings (loss) 26,503 (4,495 ) � Denominator - weighted-average shares outstanding 77,559 79,993 � Dilutive effect of common stock options, warrants and restricted stock 400 - � � 77,959 79,993 � � Diluted earnings (loss) per share 0.34 (0.06 ) � � ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � � For the Three Months Ended � September 30, September 30, Revenue: 2008 2007 � Information services 233,605 245,033 Information products 95,330 � 103,821 � � Total revenue 328,935 � 348,854 � � � Income from operations: � Information services 40,649 35,859 Information products 8,485 11,674 Corporate & other (14,841 ) (29,348 ) � Total income from operations 34,293 � 18,185 � � Margin: � Information services 17.4 % 14.6 % Information products 8.9 % 11.2 % � Total margin 10.4 % 5.2 % � � ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � � For the Six Months Ended � September 30, September 30, Revenue: 2008 2007 � Information services 470,300 485,425 Information products 189,708 � 198,098 � � Total revenue 660,008 � 683,523 � � � Income from operations: � Information services 79,275 69,929 Information products 13,063 13,838 Corporate & other (32,487 ) (64,943 ) � Total income from operations 59,851 � 18,824 � � Margin: � Information services 16.9 % 14.4 % Information products 6.9 % 7.0 % � Total margin 9.1 % 2.8 % � � � � ACXIOM CORPORATION AND SUBSIDIARIES PRODUCTS REVENUE AND COST OF PRODUCTS SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) � � For the Three Months Ended � September 30, September 30, $ % 2008 2007 Variance � Variance � Products 73,782 83,982 (10,200 ) (12.1 %) Passthrough data 21,548 � 19,839 � 1,709 8.6 % � Total products revenue 95,330 � 103,821 � (8,491 ) (8.2 %) � � Cost of products revenue: Products 55,490 61,963 6,473 10.4 % Passthrough data 21,548 � 19,839 � (1,709 ) (8.6 %) � Total cost of products 77,038 � 81,802 � 4,764 5.8 % � Margin: � Products 24.8 % 26.2 % Passthrough data 0.0 % 0.0 % Total products 19.2 % 21.2 % � � � � ACXIOM CORPORATION AND SUBSIDIARIES PRODUCTS REVENUE AND COST OF PRODUCTS SUPPLEMENTAL SCHEDULE (Unaudited) (Dollars in thousands) � � For the Six Months Ended � September 30, September 30, $ % 2008 2007 Variance � Variance � Products 145,946 158,667 (12,721 ) (8.0 %) Passthrough data 43,762 � 39,431 � 4,331 11.0 % � Total products revenue 189,708 � 198,098 � (8,390 ) (4.2 %) � � Cost of products revenue: Products 110,993 124,374 13,381 10.8 % Passthrough data 43,762 � 39,431 � (4,331 ) (11.0 %) � Total cost of products 154,755 � 163,805 � 9,050 5.5 % � Margin: � Products 23.9 % 21.6 % Passthrough data 0.0 % 0.0 % Total products 18.4 % 17.3 % � � � � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) � September 30, March 31, $ % 2008 2008 Variance � Variance Assets Current assets: Cash and cash equivalents 93,370 62,661 30,709 49.0 % Trade accounts receivable, net 220,147 216,462 3,685 1.7 % Refundable income taxes 1,031 16,080 (15,049 ) (93.6 %) Deferred income taxes 47,366 44,211 3,155 7.1 % Other current assets 51,294 � 45,645 � 5,649 12.4 % � Total current assets 413,208 � 385,059 � 28,149 7.3 % � Property and equipment 737,299 765,046 (27,747 ) (3.6 %) Less - accumulated depreciation and amortization 513,244 � 498,777 � 14,467 2.9 % � Property and equipment, net 224,055 � 266,269 � (42,214 ) (15.9 %) � Software, net of accumulated amortization 56,371 59,263 (2,892 ) (4.9 %) Goodwill 473,867 484,796 (10,929 ) (2.3 %) Purchased software licenses, net of accumulated amortization 88,530 111,574 (23,044 ) (20.7 %) Deferred costs, net 80,369 90,707 (10,338 ) (11.4 %) Data acquisition costs 42,385 51,566 (9,181 ) (17.8 %) Other assets, net 23,757 � 22,621 � 1,136 5.0 % � 1,402,542 � 1,471,855 � (69,313 ) (4.7 %) � Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term debt 49,243 69,259 (20,016 ) (28.9 %) Trade accounts payable 35,954 45,749 (9,795 ) (21.4 %) Accrued payroll and related expenses 39,762 39,061 701 1.8 % Other accrued expenses 95,976 121,441 (25,465 ) (21.0 %) Deferred revenue 57,626 � 64,116 � (6,490 ) (10.1 %) � Total current liabilities 278,561 � 339,626 � (61,065 ) (18.0 %) � Long-term debt 542,970 575,308 (32,338 ) (5.6 %) � Deferred income taxes 62,353 51,429 10,924 21.2 % � Other liabilities 5,169 4,980 189 3.8 % � Stockholders' equity: Common stock 11,490 11,428 62 0.5 % Additional paid-in capital 791,388 779,815 11,573 1.5 % Retained earnings 430,949 413,758 17,191 4.2 % Accumulated other comprehensive income 17,500 33,976 (16,476 ) (48.5 %) Treasury stock, at cost (737,838 ) (738,465 ) 627 (0.1 %) � Total stockholders' equity 513,489 � 500,512 � 12,977 2.6 % � 1,402,542 � 1,471,855 � (69,313 ) (4.7 %) � � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) � For the Three Months Ended � September 30, � � � 2008 � 2007 � Cash flows from operating activities: Net earnings (loss) 15,853 9,195 Non-cash operating activities: Depreciation and amortization 50,727 60,819 Loss (gain) on disposal or impairment of assets, net (1,131 ) (384 ) Deferred income taxes 5,138 (1,185 ) Non-cash stock compensation expense 3,628 1,672 Changes in operating assets and liabilities: Accounts receivable 4,923 (15,666 ) Other assets 11,439 2,178 Deferred costs (1,452 ) (7,227 ) Accounts payable and other liabilities 3,968 (196 ) Deferred revenue (6,290 ) (15,790 ) Net cash provided by operating activities 86,803 � 33,416 � Cash flows from investing activities: Sale of assets 24,174 - Capitalized software (4,118 ) (9,820 ) Capital expenditures (7,245 ) (5,291 ) Data acquisition costs (6,507 ) (4,403 ) Payments received from investments 102 1,799 Net cash paid in acquisitions (12,668 ) (2,791 ) Net cash used by investing activities (6,262 ) (20,506 ) Cash flows from financing activities: Payments of debt (36,197 ) (27,346 ) Dividends paid (4,662 ) - Sale of common stock 2,641 6,281 Tax benefit of stock options exercised 55 � 344 � Net cash used by financing activities (38,163 ) (20,721 ) Effect of exchange rate changes on cash (807 ) 262 � � Net increase (decrease) in cash and cash equivalents 41,571 (7,549 ) Cash and cash equivalents at beginning of period 51,799 � 61,380 � Cash and cash equivalents at end of period 93,370 � 53,831 � � Supplemental cash flow information: Cash paid (received) during the period for: Interest 7,067 13,850 Income taxes (5,929 ) 96 Payments on capital leases and installment payment arrangements 11,204 17,651 Payments on software and data license liabilities 8,420 7,279 Other debt payments, excluding line of credit 2,073 2,416 Prepayment of debt 14,500 - Noncash investing and financing activities: Acquisition of property and equipment under capital lease and installment payment arrangements 3,835 8,498 Software licenses and maintenance acquired under software obligation 1,546 493 Note payable issued in acquisition - 300 � � ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) � For the Six Months Ended � September 30, � � � 2008 � 2007 � Cash flows from operating activities: Net earnings (loss) 26,503 (4,495 ) Non-cash operating activities: Depreciation and amortization 104,620 119,921 Loss (gain) on disposal or impairment of assets, net (3,242 ) (74 ) Deferred income taxes 7,853 (3,741 ) Non-cash stock compensation expense 6,232 3,030 Changes in operating assets and liabilities: Accounts receivable (11,335 ) (4,446 ) Other assets 20,815 1,386 Deferred costs (2,068 ) (12,772 ) Accounts payable and other liabilities (27,328 ) (3,293 ) Deferred revenue (6,774 ) (28,513 ) Net cash provided by operating activities 115,276 � 67,003 � Cash flows from investing activities: Sale of assets 24,174 - Capitalized software (9,129 ) (18,267 ) Capital expenditures (12,951 ) (8,158 ) Cash collected from sale of software 2,000 - Data acquisition costs (15,129 ) (12,987 ) Payments received from investments 2,596 1,799 Net cash paid in acquisitions (12,703 ) (5,471 ) Net cash used by investing activities (21,142 ) (43,084 ) Cash flows from financing activities: Proceeds from debt - 2,127 Payments of debt (59,501 ) (58,629 ) Dividends paid (9,312 ) - Sale of common stock 5,915 42,101 Tax benefit of stock options exercised 115 � 5,968 � Net cash used by financing activities (62,783 ) (8,433 ) Effect of exchange rate changes on cash (642 ) 569 � � Net increase (decrease) in cash and cash equivalents 30,709 16,055 Cash and cash equivalents at beginning of period 62,661 � 37,776 � Cash and cash equivalents at end of period 93,370 � 53,831 � � Supplemental cash flow information: Cash paid (received) during the period for: Interest 16,421 27,738 Income taxes (5,887 ) 211 Payments on capital leases and installment payment arrangements 24,083 36,788 Payments on software and data license liabilities 16,788 13,772 Other debt payments, excluding line of credit 4,130 5,942 Prepayment of debt 14,500 - Revolving credit payments - 2,127 Noncash investing and financing activities: Acquisition of property and equipment under capital lease and installment payment arrangements 5,659 15,720 Construction and other financing - 5,351 Software licenses and maintenance acquired under software obligation 1,546 493 Note payable issued in acquisition - 300 � � � � � � � � � ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands) � � � � � � � � � � � � � � 06/30/07 � 09/30/07 � 12/31/07 � 03/31/08 � YTD FY2008 06/30/08 � 09/30/08 � YTD FY2009 � Net cash provided by operating activities 33,587 33,416 122,269 78,534 267,806 28,473 86,803 115,276 � Plus: Sale of assets - - - - - - 24,174 24,174 Payments received from investments - 1,799 1,804 - 3,603 2,494 102 2,596 Disposition of operations - - 14,250 - 14,250 - - - � Less: Capitalized software (8,447 ) (9,820 ) (8,507 ) (6,571 ) (33,345 ) (5,011 ) (4,118 ) (9,129 ) Capital expenditures (2,867 ) (5,291 ) (6,891 ) (6,551 ) (21,600 ) (5,706 ) (7,245 ) (12,951 ) Data acquisition costs (8,623 ) (4,403 ) (9,634 ) (9,503 ) (32,163 ) (8,622 ) (6,507 ) (15,129 ) Payments on capital leases and installment payment arrangements (19,137 ) (17,651 ) (17,542 ) (15,376 ) (69,706 ) (12,879 ) (11,204 ) (24,083 ) Payments on software and data license liabilities (6,493 ) (7,279 ) (6,226 ) (11,821 ) (31,819 ) (8,368 ) (8,420 ) (16,788 ) Other required debt payments (3,526 ) � (2,416 ) � (5,612 ) � (13,492 ) � (25,046 ) (2,057 ) � (2,073 ) � (4,130 ) � Subtotal (15,506 ) (11,645 ) 83,911 15,220 71,980 (11,676 ) 71,512 59,836 � Plus: Tax benefit of stock options and warrants 5,624 � � 344 � � 25 � � (480 ) � 5,513 � 60 � � 55 � � 115 � � Subtotal (9,882 ) (11,301 ) 83,936 14,740 77,493 (11,616 ) 71,567 59,951 � Plus: Cash collected from sale of software - � � - � � - � � - � � - � 2,000 � � - � � 2,000 � � Total (9,882 ) � (11,301 ) � 83,936 � � 14,740 � � 77,493 � (9,616 ) � 71,567 � � 61,951 � � ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) � � � � � � � � � � � � � � � � � � � � � � Q2 FY08 to Q2 FY09 06/30/07 � 09/30/07 � 12/31/07 � 03/31/08 � FY2008 06/30/08 � 09/30/08 % � $ Revenue: Services 240,392 245,033 244,646 239,700 969,771 236,695 233,605 -4.7 % (11,428 ) Products 94,277 � � 103,821 � � 106,113 � � 110,097 � � 414,308 � 94,378 � � 95,330 � -8.2 % � (8,491 ) Total revenue 334,669 348,854 350,759 349,797 1,384,079 331,073 328,935 -5.7 % (19,919 ) � Operating costs and expenses: Cost of revenue Services 194,602 196,333 188,659 225,776 805,370 178,861 180,986 7.8 % 15,347 Products 82,003 � � 81,802 � � 82,091 � � 78,964 � � 324,860 � 77,717 � � 77,038 � 5.8 % � 4,764 � Total cost of revenue 276,605 278,135 270,750 304,740 1,130,230 256,578 258,024 7.2 % 20,111 � � Selling, general and administrative 42,035 42,602 46,118 46,496 177,251 49,482 38,988 8.5 % 3,614 Gains, losses and other items, net 15,390 � � 9,932 � � (63,489 ) � 74,519 � � 36,352 � (545 ) � (2,370 ) 123.9 % � 12,302 � � Total operating costs and expenses 334,030 330,669 253,379 425,755 1,343,833 305,515 294,642 10.9 % 36,027 � Income from operations 639 18,185 97,380 (75,958 ) 40,246 25,558 34,293 88.6 % 16,108 % Margin 0.2 % 5.2 % 27.8 % -21.7 % 2.9 % 7.7 % 10.4 % Other income (expense) Interest expense (13,575 ) (13,842 ) (12,797 ) (11,016 ) (51,230 ) (9,459 ) (8,591 ) 37.9 % 5,251 Other, net 183 � � 1,331 � � 1,394 � � (1,685 ) � 1,223 � 1,359 � � 287 � -78.4 % � (1,044 ) Total other income (expense) (13,392 ) (12,511 ) (11,403 ) (12,701 ) (50,007 ) (8,100 ) (8,304 ) 33.6 % 4,207 � Earnings (loss) before income taxes (12,753 ) 5,674 85,977 (88,659 ) (9,761 ) 17,458 25,989 358.0 % 20,315 Income taxes 937 � � (3,521 ) � 30,977 � � (30,374 ) � (1,981 ) 6,808 � � 10,136 � -387.9 % � (13,657 ) � Net earnings (loss) (13,690 ) � 9,195 � � 55,000 � � (58,285 ) � (7,780 ) 10,650 � � 15,853 � 72.4 % � 6,658 � � � Diluted earnings (loss) per share (0.17 ) � 0.11 � � 0.69 � � (0.76 ) � (0.10 ) 0.14 � � 0.20 � 81.8 % � 0.09 � � ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands) � � � � � � � � � � � � � � � � � � � � � Q2 FY08 to Q2 FY09 06/30/07 � 09/30/07 � 12/31/07 � 03/31/08 � FY2008 06/30/08 � 09/30/08 % � $ Revenue: � Services 240,392 245,033 244,646 239,700 969,771 236,695 233,605 -4.7% (11,428) Products 94,277 � 103,821 � 106,113 � 110,097 � 414,308 94,378 � 95,330 -8.2% � (8,491) � Total revenue 334,669 � 348,854 � 350,759 � 349,797 � 1,384,079 331,073 � 328,935 -5.7% � (19,919) � Income from Operations: � Services 34,070 35,859 42,723 1,022 113,674 38,626 40,649 13.4% 4,790 Products 2,164 11,674 12,047 19,858 45,743 4,578 8,485 -27.3% (3,189) Corporate & Other (35,595) � (29,348) � 42,610 � (96,837) � (119,170) (17,646) � (14,841) -49.4% � 14,507 � Total Income from Operations 639 � 18,185 � 97,380 � (75,957) � 40,247 25,558 � 34,293 88.6% � 16,108 � Margin: � Services 14.2% 14.6% 17.5% 0.4% 11.7% 16.3% 17.4% Products 2.3% 11.2% 11.4% 18.0% 11.0% 4.9% 8.9% � Total 0.2% 5.2% 27.8% -21.7% 2.9% 7.7% 10.4%