Acxiom Improves Earnings And Revenues, Still Reports 1Q Losses As Company Restructures

One day after exiting the IT outsourcing business, Acxiom Corp. saw strong sales growth but still reported first quarter losses as the Little Rock data marketing giant undergoes an organization restructuring to improve the company’s operations and bottom line.

For the period end June 30, Acxiom reported net losses of $2.8 million or seven cents per share, a marked improvement over losses of $13 million, or 14 cents, in the prior year.

Revenues for the Little Rock tech company grew by 5.5% to $196.9 million in the first quarter, compared to $186.7 million in the same period a year ago. Wall Street had expected Acxiom to report first quarter earnings of five cents per share on revenues of $187 million, according to a survey of analysts by Thomson Reuters.

“The first quarter was a solid start to fiscal 2016,” said Acxiom CEO Scott Howe. “Our results this quarter demonstrate the continued strength of Connectivity. A growing list of customers and synergies from our combination with LiveRamp contributed to dramatically expanding revenue, gross margin and bottom-line performance.”

Howe continued: “We are also pleased to announce that the sale of our IT Infrastructure Management business was completed on July 31, 2015, leaving Acxiom with a portfolio of businesses that share a single vision and mission.”

Here are additional highlights of Acxiom’s first quarter results and operations:

• LiveRamp added 30 new customers during the quarter and added 10 new partner integrations. Marketers can now onboard and distribute their data to a growing network of over 200 marketing platforms and data providers.
• Acxiom relaunched its email and cross-channel marketing business, Acxiom Impact, an advanced marketing offering specifically designed to meet the unique needs of sophisticated enterprise marketers.
• Acxiom appointed Jeremy Allen as President of Marketing Services. Allen’s appointment completes Acxiom’s new divisional structure, which includes Travis May as President of Connectivity and Rick Erwin as President of Audience Solutions. Acxiom’s CFO, Warren Jenson, is heading the company’s international operations.
• Acxiom repurchased approximately 832,000 shares for $15 million during the quarter. Since inception of the share repurchase program in August 2011, the company has repurchased 13.7 million shares for $217 million.

On July 31, 2015, Acxiom completed the sale of its IT Infrastructure Management business to Charlesbank Capital Partners and co-investor M/C Partners.

On Tuesday, Acxiom closed its previously announced $190 million deal to sell off its IT outsourcing business to Boston-based private equity firms Capital Partners (Charlesbank) of Boston and M/C Partners as part of management’s three-year process to “tighten our strategic direction.”

Howe had previously stated that the Little Rock data marketing giant will use proceeds from the sale to pay down debt and to fund the expansion of its share repurchase program.

Under the terms of the deal with Charlesbank, total potential cash consideration is nearly $190 million, comprised of $140 million in cash at closing and up to $50 million in contingent payments subject to certain performance metrics. In addition, Acxiom will receive a 5% profit interest in the go-forward company.

The new company, called Acxiom ITO, appointed former CenturyLink executive Jeff VonDeylen as the CEO of the newly created company. At the close of business Wednesday, Acxiom’s shares were up 35 cents at $18.35 on the Nasdaq stock exchange. The company’s stock has traded in the range of $15.78 and $21.25 over the past year.