ACXM Acxiom Holdngs (delisted)

Acxiom® Corporation (Nasdaq: ACXM), a global leader in interactive marketing, today announced financial results for the second quarter of fiscal year 2010 ended September 30, 2009. 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.

John Meyer, Acxiom’s chief executive officer and president, said, “The September quarter was another challenging period for us versus the prior-year quarter, but we are beginning to see signs of progress in the business. Our revenue and operating income results improved in the September quarter over the June quarter. In addition, several of our clients have indicated to us that they expect to increase their marketing spending during the second half of our fiscal year. This anticipated increase in client spending coupled with our continued emphasis on expense management gives us confidence that our second half operating income performance will improve over the first half of the fiscal year.”

Second Quarter 2010 Highlights:

• Earnings per diluted share of $0.12 in the second quarter of fiscal 2010, compared to earnings per diluted share of $0.18 in the second quarter of fiscal 2009, before the effect of unusual gain items. GAAP diluted earnings per share in the prior-year period were $0.20, which included $0.02 in unusual gain items.
• Income from operations of $21.2 million in the current year second quarter, compared to income from operations of $31.9 million in the second quarter last year, before the effect of unusual items. The prior year GAAP income from operations was $34.3 million, which included unusual gain items of $2.4 million.
• Revenue of $271.1 million in the current quarter, compared to $307.4 million, excluding an Information Products pass-through contract, in the second quarter a year ago. GAAP revenue in the prior period was $328.9 million, which included pass-through revenue from the Information Products contract of approximately $21.5 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract.
• Operating cash flow of $60.7 million compared to $86.8 million in the second quarter a year ago.
• Free cash flow available to equity of $29.4 million, compared to $71.6 million in the second quarter a year ago. The prior-year amount included $24.2 million of proceeds received from the sale of company-owned real estate. 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 news release.

Operational Highlights:

• Information Services: Revenue for the quarter was $210.2 million, compared to $233.6 million in the second quarter of the previous year. Income from operations for the quarter was $20.0 million, compared to $28.5 million in the second quarter of fiscal 2009.
• Information Products: Revenue for the quarter was $60.9 million, compared with $73.8 million, excluding the pass-through revenue from the Information Products contract referenced above, in the second quarter a year ago. GAAP revenue in the prior period was $95.3 million, which included revenue from the Information Products pass-through contract of approximately $21.5 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract. Income from operations for the quarter was $1.2 million, compared to income from operations of $3.4 million in the second quarter of the previous year.

Income from operations includes expenses that had previously been included in corporate and other expenses. The Company now allocates selling, general and administrative expenses previously included in corporate and other expenses to the two operating segments, Information Services and Information Products. Prior-year results have been reclassified to reflect the change.

Fiscal Year 2010 Year-To-Date Highlights:

• Earnings per diluted share of $0.17 for the current year six-month period compared to earnings per diluted share of $0.31 in the comparable six-month period last year, before the effect of unusual gain items. GAAP diluted earnings per share for the six-month period of fiscal 2009 were $0.34 which included $0.03 in unusual gain items.
• Income from operations of $33.7 million for the first six months of fiscal year 2010, compared to $56.9 million, before unusual gain items in the comparable six-month period of fiscal 2009. GAAP income from operations for the prior year of $59.9 million included $2.9 million of unusual gain items.
• Revenue of $527.1 million in the current six-month period, compared to $616.2 million, excluding an Information Products pass-through contract, in the first half of fiscal 2009. GAAP revenue in the prior period was $660.0 million, which included pass-through revenue from the Information Products contract of approximately $43.8 million. This contract was modified in the fourth quarter of fiscal 2009, and the company no longer recognizes pass-through revenue from this contract.
• Operating cash flow of $76.9 million in the current fiscal year six-month period compared to $115.3 million in the prior year six-month period.
• Free cash flow available to equity of $16.3 million for the six months ended September 30, 2009. For the six-month period ended September 30, 2008 free cash flow available to equity was $62.0 million. The prior-year amount included $26.8 million of unusual and one-time items, including $24.2 million in proceeds received from the sale of company-owned real estate. Free cash flow available to equity is a non-GAAP financial measure; reconciliation to the comparable GAAP measure, operating cash flow, is attached to this news release.

Web Link to Financials

You may link to http://www.acxiom.com/FY10_Q2_Financials for the detailed financial information we typically attach to our earnings releases.

About Acxiom

A global leader in interactive marketing services and infrastructure management, Acxiom connects clients with their customers through deep customer 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. Our secure, high-performance technology services deliver consistent value and reliability. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, 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 Statements

This release and today’s conference call may contain forward-looking statements including, without limitation, statements regarding the anticipated increase in client spending during the second half of our fiscal year. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates to other organizations; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual report on Form 10-K, particularly the discussion under the caption “Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2009, which was filed with the Securities and Exchange Commission on May 29, 2009.

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

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

Acxiom is a registered trademark of Acxiom Corporation.

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ACXIOM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share)         For the Three Months Ended September 30, $ % 2009 2008 Variance   Variance   Revenue: Services 210,213 233,605 (23,392 ) (10.0 %) Products 60,892   95,330   (34,438 ) (36.1 %) Total revenue 271,105 328,935 (57,830 ) (17.6 %)   Operating costs and expenses: Cost of revenue Services 165,792 180,986 15,194 8.4 % Products 46,129   77,038   30,909 40.1 % Total cost of revenue 211,921 258,024 46,103 17.9 %   Services gross margin 21.1 % 22.5 % Products gross margin 24.2 % 19.2 % Total gross margin 21.8 % 21.6 %   Selling, general and administrative 37,964 38,988 1,024 2.6 % Gains, losses and other items, net (27 ) (2,370 ) (2,343 ) (98.9 %)   Total operating costs and expenses 249,858   294,642   44,784 15.2 %   Income from operations 21,247   34,293   (13,046 ) (38.0 %)   Other income (expense): Interest expense (5,423 ) (8,591 ) 3,168 36.9 % Other, net 223   287   (64 ) (22.3 %)   Total other income (expense) (5,200 ) (8,304 ) 3,104 37.4 %   Earnings before income taxes 16,047 25,989 (9,942 ) (38.3 %)   Income taxes 6,602   10,136   3,534 34.9 %   Net earnings 9,445   15,853   (6,408 ) (40.4 %)   Earnings per share:   Basic 0.12   0.20   (0.08 ) (40.0 %)   Diluted 0.12   0.20   (0.08 ) (40.0 %)   ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share)         For the Six Months Ended September 30, $ % 2009 2008 Variance   Variance   Revenue: Services 409,539 470,300 (60,761 ) (12.9 %) Products 117,547   189,708   (72,161 ) (38.0 %) Total revenue 527,086 660,008 (132,922 ) (20.1 %)   Operating costs and expenses: Cost of revenue Services 325,368 359,847 34,479 9.6 % Products 92,048   154,755   62,707 40.5 % Total cost of revenue 417,416 514,602 97,186 18.9 %   Services gross margin 20.6 % 23.5 % Products gross margin 21.7 % 18.4 % Total gross margin 20.8 % 22.0 %   Selling, general and administrative 75,607 88,470 12,863 14.5 % Gains, losses and other items, net 320   (2,915 ) (3,235 ) (111.0 %)   Total operating costs and expenses 493,343   600,157   106,814 17.8 %   Income from operations 33,743   59,851   (26,108 ) (43.6 %)   Other income (expense): Interest expense (10,928 ) (18,050 ) 7,122 39.5 % Other, net 105   1,646   (1,541 ) (93.6 %)   Total other income (expense) (10,823 ) (16,404 ) 5,581 34.0 %   Earnings before income taxes 22,920 43,447 (20,527 ) (47.2 %)   Income taxes 9,281   16,944   7,663 45.2 %   Net earnings 13,639   26,503   (12,864 ) (48.5 %)   Earnings per share:   Basic 0.17   0.34   (0.17 ) (50.0 %)   Diluted 0.17   0.34   (0.17 ) (50.0 %)   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, 2009 2008   Basic earnings per share:   Numerator - net earnings 9,445 15,853   Denominator - weighted-average shares outstanding 78,915 77,716   Basic earnings per share 0.12 0.20   Diluted earnings per share:   Numerator - net earnings 9,445 15,853   Denominator - weighted-average shares outstanding 78,915 77,716   Dilutive effect of common stock options, warrants and restricted stock 464 447   79,379 78,163   Diluted earnings per share 0.12 0.20   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, 2009 2008   Basic earnings per share:   Numerator - net earnings 13,639 26,503   Denominator - weighted-average shares outstanding 78,791 77,559   Basic earnings per share 0.17 0.34   Diluted earnings per share:   Numerator - net earnings 13,639 26,503   Denominator - weighted-average shares outstanding 78,791 77,559   Dilutive effect of common stock options, warrants and restricted stock 404 400   79,195 77,959   Diluted earnings per share 0.17 0.34   ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)     For the Three Months Ended   September 30, September 30, Revenue: 2009 2008   Information services 210,213 233,605 Information products 60,892   95,330     Total revenue 271,105   328,935       Income from operations:   Information services 19,971 28,527 Information products 1,249 3,396 Other 27   2,370     Total income from operations 21,247   34,293     Margin:   Information services 9.5 % 12.2 % Information products 2.1 % 3.6 %   Total margin 7.8 % 10.4 %   ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)     For the Six Months Ended   September 30, September 30, Revenue: 2009 2008   Information services 409,539 470,300 Information products 117,547   189,708     Total revenue 527,086   660,008       Income from operations:   Information services 35,809 54,166 Information products (1,746 ) 2,770 Other (320 ) 2,915     Total income from operations 33,743   59,851     Margin:   Information services 8.7 % 11.5 % Information products -1.5 % 1.5 %   Total margin 6.4 % 9.1 %   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, $ % 2009 2008 Variance   Variance   Products 60,892 73,782 (12,890 ) (17.5 %) Passthrough data -   21,548   (21,548 ) (100.0 %)   Total products revenue 60,892   95,330   (34,438 ) (36.1 %)     Cost of products revenue: Products 46,129 55,490 9,361 16.9 % Passthrough data -   21,548   21,548 100.0 %   Total cost of products 46,129   77,038   30,909 40.1 %   Margin:   Products 24.2 % 24.8 % Passthrough data - 0.0 % Total products 24.2 % 19.2 %   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, $ % 2009 2008 Variance   Variance   Products 117,547 145,946 (28,399 ) (19.5 %) Passthrough data -   43,762   (43,762 ) (100.0 %)   Total products revenue 117,547   189,708   (72,161 ) (38.0 %)     Cost of products revenue: Products 92,048 110,993 18,945 17.1 % Passthrough data -   43,762   43,762 100.0 %   Total cost of products 92,048   154,755   62,707 40.5 %   Margin:   Products 21.7 % 23.9 % Passthrough data - 0.0 % Total products 21.7 % 18.4 %   ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)         September 30, March 31, $ % 2009 2009 Variance   Variance

Assets

Current assets: Cash and cash equivalents 167,634 177,166 (9,532 ) (5.4 %) Trade accounts receivable, net 182,612 184,814 (2,202 ) (1.2 %) Refundable income taxes - 4,579 (4,579 ) (100.0 %) Deferred income taxes 45,503 45,641 (138 ) (0.3 %) Other current assets 52,002   46,873   5,129 10.9 %   Total current assets 447,751   459,073   (11,322 ) (2.5 %)   Property and equipment 778,697 745,999 32,698 4.4 % Less - accumulated depreciation and amortization 559,891   531,410   28,481 5.4 %   Property and equipment, net 218,806   214,589   4,217 2.0 %   Software, net of accumulated amortization 45,819 52,798 (6,979 ) (13.2 %) Goodwill 470,621 454,944 15,677 3.4 % Purchased software licenses, net of accumulated amortization 55,564 65,341 (9,777 ) (15.0 %) Deferred costs, net 64,699 70,343 (5,644 ) (8.0 %) Data acquisition costs 26,624 31,317 (4,693 ) (15.0 %) Other assets, net 17,578   18,938   (1,360 ) (7.2 %)   1,347,462   1,367,343   (19,881 ) (1.5 %)  

Liabilities and Stockholders' Equity

Current liabilities: Current installments of long-term debt 43,636 40,967 2,669 6.5 % Trade accounts payable 32,242 27,701 4,541 16.4 % Accrued payroll and related expenses 24,379 44,823 (20,444 ) (45.6 %) Other accrued expenses 85,713 86,072 (359 ) (0.4 %) Deferred revenue 50,118 54,991 (4,873 ) (8.9 %) Income taxes 171   -   171 -   Total current liabilities 236,259   254,554   (18,295 ) (7.2 %)   Long-term debt 490,608 537,272 (46,664 ) (8.7 %)   Deferred income taxes 65,586 58,526 7,060 12.1 %   Other liabilities 9,156 9,321 (165 ) (1.8 %)   Stockholders' equity: Common stock 11,620 11,576 44 0.4 % Additional paid-in capital 807,251 800,094 7,157 0.9 % Retained earnings 455,589 441,950 13,639 3.1 % Accumulated other comprehensive income 9,994 (6,238 ) 16,232 (260.2 %) Treasury stock, at cost (738,601 ) (739,712 ) 1,111 (0.2 %)   Total stockholders' equity 545,853   507,670   38,183 7.5 %   1,347,462   1,367,343   (19,881 ) (1.5 %)   ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)     For the Three Months Ended September 30, 2009   2008   Cash flows from operating activities: Net earnings 9,445 15,853 Non-cash operating activities: Depreciation and amortization 41,147 50,727 Loss on disposal or impairment of assets, net 9 (1,131 ) Deferred income taxes 6,223 5,138 Non-cash stock compensation expense 3,261 3,628 Changes in operating assets and liabilities: Accounts receivable 2,526 4,923 Other assets (1,190 ) 11,439 Deferred costs (2,438 ) (1,452 ) Accounts payable and other liabilities 6,911 3,968 Deferred revenue (5,191 ) (6,290 ) Net cash provided by operating activities 60,703   86,803   Cash flows from investing activities: Sale of assets - 24,174 Capitalized software (2,431 ) (4,118 ) Capital expenditures (14,462 ) (7,245 ) Data acquisition costs (3,004 ) (6,507 ) Payments received from investments - 102 Net cash paid in acquisitions 357   (12,668 ) Net cash used by investing activities (19,540 ) (6,262 ) Cash flows from financing activities: Payments of debt (41,402 ) (36,197 ) Dividends paid - (4,662 ) Sale of common stock 236 2,641 Tax benefit of stock options exercised -   55   Net cash used by financing activities (41,166 ) (38,163 ) Effect of exchange rate changes on cash (33 ) (807 )   Net increase (decrease) in cash and cash equivalents (36 ) 41,571 Cash and cash equivalents at beginning of period 167,670   51,799   Cash and cash equivalents at end of period 167,634   93,370     Supplemental cash flow information: Cash paid (received) during the period for: Interest 5,328 7,067 Income taxes 792 (5,929 ) Payments on capital leases and installment payment arrangements 7,504 11,204 Payments on software and data license liabilities 1,840 8,420 Other debt payments, excluding line of credit 2,058 2,073 Prepayment of debt 30,000 14,500 Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

6,564 3,835

Software licenses and maintenance acquired under software obligation

611 1,546   ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)     For the Six Months Ended September 30, 2009   2008   Cash flows from operating activities: Net earnings 13,639 26,503 Non-cash operating activities: Depreciation and amortization 81,742 104,620 Loss on disposal or impairment of assets, net 7 (3,242 ) Deferred income taxes 8,719 7,853 Non-cash stock compensation expense 5,650 6,232 Changes in operating assets and liabilities: Accounts receivable (1,809 ) (11,335 ) Other assets 3,461 20,815 Deferred costs (3,344 ) (2,068 ) Accounts payable and other liabilities (25,105 ) (27,328 ) Deferred revenue (6,091 ) (6,774 ) Net cash provided by operating activities 76,869   115,276   Cash flows from investing activities: Sale of assets - 24,174 Capitalized software (4,815 ) (9,129 ) Capital expenditures (21,893 ) (12,951 ) Cash collected from sale and license of software - 2,000 Data acquisition costs (8,781 ) (15,129 ) Payments received from investments - 2,596 Net cash paid in acquisitions 357   (12,703 ) Net cash used by investing activities (35,132 ) (21,142 ) Cash flows from financing activities: Payments of debt (55,126 ) (59,501 ) Dividends paid - (9,312 ) Sale of common stock 2,663 5,915 Tax benefit of stock options exercised - 115 Acquisition of treasury stock (307 ) -   Net cash used by financing activities (52,770 ) (62,783 ) Effect of exchange rate changes on cash 1,501   (642 )   Net increase (decrease) in cash and cash equivalents (9,532 ) 30,709 Cash and cash equivalents at beginning of period 177,166   62,661   Cash and cash equivalents at end of period 167,634   93,370     Supplemental cash flow information: Cash paid (received) during the period for: Interest 10,586 16,421 Income taxes (4,260 ) (5,887 ) Payments on capital leases and installment payment arrangements 15,298 24,083 Payments on software and data license liabilities 5,718 16,788 Other debt payments, excluding line of credit 4,110 4,130 Prepayment of debt 30,000 14,500 Noncash investing and financing activities:

Acquisition of property and equipment under capital lease and installment payment arrangements

10,387 5,659 Software licenses and maintenance acquired under software obligation 611 1,546   ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW (Unaudited) (Dollars in thousands)                                                 06/30/08   09/30/08   12/31/08   03/31/09   FY2009 06/30/09   09/30/09   FY2010   Net cash provided by operating activities 28,473 86,803 78,913 74,652 268,841 16,166 60,703 76,869   Plus: Sale of assets - 24,174 - - 24,174 - - - Payments received from investments 2,494 102 - 3 2,599 - - - Disposition of operations - - - - - - - -   Less: Capitalized software (5,011 ) (4,118 ) (3,872 ) (3,238 ) (16,239 ) (2,384 ) (2,431 ) (4,815 ) Capital expenditures (5,706 ) (7,245 ) (6,232 ) (12,266 ) (31,449 ) (7,431 ) (14,462 ) (21,893 ) Data acquisition costs (8,622 ) (6,507 ) (7,825 ) (7,607 ) (30,561 ) (5,777 ) (3,004 ) (8,781 ) Payments on capital leases and installment payment arrangements (12,879 ) (11,204 ) (9,033 ) (7,673 ) (40,789 ) (7,794 ) (7,504 ) (15,298 ) Payments on software and data license liabilities (8,368 ) (8,420 ) (3,099 ) (3,330 ) (23,217 ) (3,878 ) (1,840 ) (5,718 ) Other required debt payments (2,057 )   (2,073 )   (2,061 )   (2,073 )   (8,264 ) (2,052 )   (2,058 )   (4,110 )   Subtotal (11,676 ) 71,512 46,791 38,468 145,095 (13,150 ) 29,404 16,254   Plus: Tax benefit of stock options and warrants 60     55     -     (81 )   34   -    

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    -     Subtotal (11,616 ) 71,567 46,791 38,387 145,129 (13,150 ) 29,404 16,254   Plus: Cash collected from sale of software 2,000     -     -     -     2,000   -    

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    -     Total (9,616 )   71,567     46,791     38,387     147,129   (13,150 )   29,404     16,254       ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share)                                                 Q2 FY09 to Q2 FY10 06/30/08   09/30/08   12/31/08   03/31/09   FY2009 06/30/09   09/30/09   FY2010 %   $ Revenue: Services 236,695 233,605 231,077 218,885 920,262 199,326 210,213 409,539 -10.0 % (23,392 ) Products 94,378     95,330     89,979     76,624     356,311   56,655     60,892     117,547   -36.1 %   (34,438 ) Total revenue 331,073 328,935 321,056 295,509 1,276,573 255,981 271,105 527,086 -17.6 % (57,830 )   Operating costs and expenses: Cost of revenue Services 178,861 180,986 173,433 161,060 694,340 159,576 165,792 325,368 8.4 % 15,194 Products 77,717     77,038     70,487     55,604     280,846   45,919     46,129     92,048   40.1 %   30,909   Total cost of revenue 256,578 258,024 243,920 216,664 975,186 205,495 211,921 417,416 17.9 % 46,103     Selling, general and administrative 49,482 38,988 42,560 38,930 169,960 37,643 37,964 75,607 2.6 % 1,024 Gains, losses and other items, net (545 )   (2,370 )   43,175     (1,694 )   38,566   347     (27 )   320   -98.9 %   (2,343 )   Total operating costs and expenses 305,515 294,642 329,655 253,900 1,183,712 243,485 249,858 493,343 15.2 % 44,784   Income (loss) from operations 25,558 34,293 (8,599 ) 41,609 92,861 12,496 21,247 33,743 -38.0 % (13,046 ) % Margin 7.7 % 10.4 % -2.7 % 14.1 % 7.3 % 4.9 % 7.8 % 6.4 % Other income (expense) Interest expense (9,459 ) (8,591 ) (8,105 ) (6,441 ) (32,596 ) (5,505 ) (5,423 ) (10,928 ) 36.9 % 3,168 Other, net 1,359     287     140     163     1,949   (118 )   223     105   -22.3 %   (64 ) Total other income (expense) (8,100 ) (8,304 ) (7,965 ) (6,278 ) (30,647 ) (5,623 ) (5,200 ) (10,823 ) 37.4 % 3,104   Earnings (loss) before income taxes 17,458 25,989 (16,564 ) 35,331 62,214 6,873 16,047 22,920 -38.3 % (9,942 ) Income taxes 6,808     10,136     (5,115 )   12,881     24,710   2,679     6,602     9,281   34.9 %   3,534     Net earnings (loss) 10,650     15,853     (11,449 )   22,450     37,504   4,194     9,445     13,639   -40.4 %   (6,408 )     Diluted earnings (loss) per share 0.14     0.20     (0.15 )   0.29     0.48   0.05     0.12     0.17   -40.0 %   (0.08 )   ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)                                                   Q2 FY09 to Q2 FY10 06/30/08   09/30/08   12/31/08   03/31/09   FY2009 06/30/09   09/30/09   FY2010 %   $ Revenue:   Services 236,695 233,605 231,077 218,885 920,262 199,326 210,213 409,539 -10.0 % (23,392 ) Products 94,378     95,330     89,979     76,624     356,311   56,655     60,892     117,547   -36.1 %   (34,438 )   Total revenue 331,073     328,935     321,056     295,509     1,276,573   255,981     271,105     527,086   -17.6 %   (57,830 )   Income from operations:   Services 25,639 28,527 30,358 32,873 117,397 15,838 19,971 35,809 -30.0 % (8,556 ) Products (626 ) 3,396 4,218 7,042 14,030 (2,995 ) 1,249 (1,746 ) -63.2 % (2,147 ) Other 545     2,370     (43,175 )   1,694     (38,566 ) (347 )   27     (320 ) -98.9 %   (2,343 )   Total income (loss) from operations 25,558     34,293     (8,599 )   41,609     92,861   12,496     21,247     33,743   -38.0 %   (13,046 )   Margin:   Services 10.8 % 12.2 % 13.1 % 15.0 % 12.8 % 7.9 % 9.5 % 8.7 % Products -0.7 % 3.6 % 4.7 % 9.2 % 3.9 % -5.3 % 2.1 % -1.5 %   Total 7.7 % 10.4 % -2.7 % 14.1 % 7.3 % 4.9 % 7.8 % 6.4 %