Acxiom's Earnings Rise Sharply in Fiscal Q2

Acxiom® Corporation announced financial results for the second quarter of fiscal 2007 ended September 30, 2006.

Year over year, second-quarter earnings per diluted share increased 213 percent to $.25. Consolidated net earnings for the quarter increased 204 percent to $21.7 million. Gross margin increased to 27.5 percent from 26.2 percent in the same quarter a year ago. Second-quarter revenue totaled $348.3 million, an increase of 5.4 percent over the same quarter last year.

"We are pleased that Acxiom delivered another solid performance in the second quarter and remains on track to meet the fiscal 2007 targets we communicated at our Sept. 27 analysts' meeting in New York," Company Leader Charles D. Morgan said. "We continue to execute the fundamentals of our business and are delivering the results that we expected. I believe we are well positioned for a successful second half of the fiscal year."

Highlights of Acxiom's second-quarter performance include:

• Revenue of $348.3 million, up 5.4 percent from $330.5 million in the second quarter a year ago.
• Income from operations of $41.9 million, a 123 percent increase compared to $18.8 million in the second quarter last year. Last year's second-quarter results included the impact of net pretax charges of $15.8 million associated with restructuring, the sale of non-strategic operations and other unusual items. Excluding the impact of those charges, income from operations would have been up 21 percent. A reconciliation of the adjusted prior-year information is attached to this press release.
• Diluted earnings per share of $.25, a 213 percent increase compared to $.08 in the second quarter of fiscal 2006. The impact of the net charges described above reduced diluted EPS by $.12 for the second quarter last year. Excluding this impact, diluted earnings per share increased 25 percent.
• Operating cash flow of $64.4 million and free cash flow available to equity of $15.3 million. Free cash flow available to equity is a non-GAAP financial measure, and a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this press release.
• Gross margin of 27.5 percent compared to 26.2 percent in the same quarter last year.
• Computer, communications and other equipment expense equaling 20.9 percent of revenue compared to 23.1 percent of revenue in the second quarter of fiscal 2006.

"The improvement in our earnings and margins - assisted by reduced computer expense as a percentage of revenue - shows the increasing strength of our business and the results of our initiatives to improve operational efficiencies," Morgan said.

Morgan also noted that Acxiom recently completed new contracts with Procter & Gamble Co., E*TRADE FINANCIAL Corporation, D&B and Safety-Kleen Systems, Inc.

Outlook

The Company's expectations are communicated in the Financial Road Map, which includes a chart summarizing the one-year and long-term goals as well as an explanation of the assumptions and definitions that accompany these goals. Acxiom's current Financial Road Map reflects the Company's current expectations for fiscal year 2007, and the long-term goals reflect expected performance in fiscal 2010.

Detailed information from our analysts' day September 27 in New York is also posted on www.acxiom.com.

These financial projections are based on the assumptions and limitations set forth in the Financial Road Map. These projections are forward looking, and actual results may differ materially. These projections may be impacted by mergers, acquisitions, divestitures or other business combinations that may be completed in the future as well as the other factors set forth below.

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