Release

For more information, contact: Robert S. Bloom Financial Relations Leader Acxiom Corporation (501) 342-1321 EACXM Acxiomae Announces Third-Quarter Financial Results Record Cash Flow Among HighlightsLITTLE ROCK, Ark. - January 21, 2004 - Acxiomae Corporation (Nasdaq: ACXM) today announced revenue and earnings results for thethird quarter ended December 31, 2003. Revenue and diluted earnings per share were $255.2 million and $.22, respectively. Operatingcash flow of $79.3 million and free cash flow of $59.9 million for the quarter represent record cash flow performances for theCompany. Acxiom will hold a conference call at 4:30 p.m. CST today to discuss this information further. Interested parties areinvited to listen to the call, which will be broadcast via the Internet at www.acxiom.com."Our third-quarter revenue, earnings, cash flow and new-business results are all strong," Company Leader Charles D. Morgan said."And with the building momentum of our new Customer Information Infrastructure (CII) grid-based solution architecture we areestablishing a solid foundation for fiscal 2005."Highlights of Acxiom's third-quarter performance include:o Revenue of $255.2 million and diluted earnings per share of $.22, which includes a $3 million distribution from the Montgomery Ward bankruptcy and a loss of $1.4 million related to investments.o Operating cash flow of $79.3 million and free cash flow of $59.9 million, which are quarterly records for the Company and the 10th consecutive quarter of strong cash flow performance. Free cash flow is a non-GAAP financial measure and a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this release.o New contracts that will deliver $49 million in annual revenue and renewals that total $14 million in annual revenue.o Committed new deals in the pipeline that are expected to generate $44 million in annual revenue.o The acquisition of Claritas Europe was completed effective January 1, 2004.o The completion of a long-term, multi-faceted strategic alliance with Accenture that is expected to drive new revenue and improve the efficiency of Acxiom's services delivery model."Our increased presence in Europe and our new partnership with Accenture represent landmark deals that will help define the futureof Acxiom," Morgan said. "Bringing Claritas Europe's data assets together with Acxiom's proven services expertise creates anattractive value proposition for the European marketplace. Similarly, Accenture's strengths and Acxiom's strengths are verycomplementary, and combining those strengths should improve bottom-line results for both companies."Morgan noted that Acxiom expanded its services agreement with JPMorgan Chase in the quarter to include the financial institution'scredit card customer database. Other contracts were completed with blue-chip clients including Equifax in the United Kingdom andAutoNation Inc., Bank One Corporation, IMS Health, Marriott Vacation Club International and Microsoft Corporation in the U.S.OutlookThe financial projections stated today are based on the Company's current expectations. These projections are forward looking, andactual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions,divestitures or other business combinations that may be completed in the future.For the fourth quarter of the 2004 fiscal year, the Company expects:o Revenue of $265 million to $270 million, which includes the Claritas Europe operations.o Earnings per share of $.16 to $.18, which includes the previously announced expected loss of $.02 a share from the Claritas Europe operations.o Operating cash flow in excess of $40 million and free cash flow in excess of $25 million, which increases the Company's fiscal 2004 projection for operating cash flow to more than $220 million and free cash flow to more than $155 million.For the fiscal year ending March 31, 2005, the Company estimates revenue of $1.14 billion to $1.19 billion and diluted earnings pershare of $.68 to $.70. The Company estimates that it will generate operating cash flow in excess of $200 million and free cash flowin excess of $135 million.About AcxiomAcxiom Corporation (Nasdaq: ACXM) integrates data, services and technology to create and deliver customer and information managementsolutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions areCustomer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacyleadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States andEurope, and in Australia and Japan.This release and the scheduled conference call include a discussion of free cash flow, a non-GAAP financial measure. There is areconciliation of this measure to the comparable GAAP measure, operating cash flow, attached to this press release.This release and today's conference call contain forward-looking statements that are subject to certain risks and uncertainties thatcould cause actual results to differ materially. Such statements include but are not necessarily limited to the following: 1) thatthe projected revenue, earnings, earnings per share, operating cash flow and free cash flow referred to under the caption "Outlook"above will meet or exceed the estimated amount; 2) that the business pipeline and that our current cost structure will allow us tocontinue to meet or exceed revenue, earnings and cash flow projections; 3) that new contracts and contract renewals will generate theindicated amounts of revenue; 4) that we have committed new deals in the pipeline that are expected to deliver the indicatedamounts; 5) that we are well positioned for success going forward; 6) that future results will be within the indicated ranges; 7)that new products and services will produce the expected results.The following are important factors, among others, that could cause actual results to differ materially from these forward-lookingstatements: The possibility that certain contracts may not be closed, or may not be closed within the anticipated time frames; thepossibility that certain contracts may not generate the anticipated revenue or profitability; the possibility that negative changesin economic or other conditions might lead to a reduction in demand for our products and services; the possibility that the recoveryfrom the previous three years' economic slowdown may take longer than expected or that economic conditions in general will not be asexpected; the possibility that significant customers may experience extreme, severe economic difficulty; the possibility that thefair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; thepossibility that sales cycles may lengthen; the possibility that we may not be able to attract and retain qualified technical andleadership associates, or that we may lose key associates to other organizations; the possibility that we won't be able to properlymotivate our sales force or other associates; the possibility that we won't be able to achieve cost reductions and avoidunanticipated costs; the possibility that we won't be able to continue to receive credit upon satisfactory terms and conditions; thepossibility that competent, competitive products, technologies or services will be introduced into the marketplace by othercompanies; the possibility that we may be subjected to pricing pressure due to market conditions and/or competitive products andservices; the possibility that there will be changes in consumer or business information industries and markets; the possibilitythat we won't be able to protect proprietary information and technology or to obtain necessary licenses on commercially reasonableterms; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that there willbe changes in the legislative, accounting, regulatory and consumer environments affecting our business, including but not limited tolitigation, legislation, regulations and customs relating to our ability to collect, manage, aggregate and use data; the possibilitythat data suppliers might withdraw data from us, leading to our inability to provide certain products and services; the possibilitythat we may enter into short-term contracts which would affect the predictability of our revenues; the possibility that the amountof ad hoc, volume-based and project work will not be as expected; the possibility that we may experience a loss of data centercapacity or interruption of telecommunication links or power sources; the possibility that postal rates may increase, therebyleading to reduced volumes of business; the possibility that our clients may cancel or modify their agreements with us; thepossibility that the services of the United States Postal Service, their global counterparts and other delivery systems may bedisrupted; the possibility that the integration of our recently acquired businesses may not be successful; and the possibility thatwe may be affected by other competitive factors.With respect to the provision of products or services outside our primary base of operations in the U.S., all of the above factorsapply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws andregulations. Other factors are detailed from time to time in our periodic reports and registration statements filed with the UnitedStates Securities and Exchange Commission. We believe that we have the product and technology offerings, facilities, associates andcompetitive and financial resources for continued business success, but future revenues, costs, margins and profits are allinfluenced by a number of factors, including those discussed above, all of which are inherently difficult to forecast. We undertakeno 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 December 31, ----------------------------------------- 2003 2002 -----------------------------------------Revenue 255,207 257,961Operating costs and expenses: Salaries and benefits 82,452 80,474 Computer, communications and other equipment 66,863 69,066 Data costs 32,642 28,748 Other operating costs and expenses 38,915 48,457 Gains, losses and nonrecurring items, net (3,000) (521) -------------- --------------- Total operating costs and expenses 217,872 226,224 -------------- ---------------Income from operations 37,335 31,737 -------------- ---------------Other income (expense): Interest expense (4,702) (5,088) Other, net (456) 1,064 -------------- --------------- (5,158) (4,024) -------------- ---------------Earnings before income taxes 32,177 27,713Income taxes 12,233 8,176 -------------- ---------------Net earnings 19,944 19,537 ============== ===============Earnings per share: Basic 0.23 0.22 ============== =============== Diluted 0.22 0.20 ============== =============== ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except earnings per share) For the Nine Months Ended December 31, -------------------------------------------- 2003 2002 --------------------------------------------Revenue 732,985 718,763Operating costs and expenses: Salaries and benefits 251,721 230,316 Computer, communications and other equipment 197,255 195,921 Data costs 95,113 87,478 Other operating costs and expenses 121,620 129,067 Gains, losses and nonrecurring items, net (4,008) (5,081) ------------------ ------------------- Total operating costs and expenses 661,701 637,701 ------------------ -------------------Income from operations 71,284 81,062 ------------------ -------------------Other income (expense): Interest expense (14,356) (15,485) Other, net 430 2,607 ...