Acxiom's Second-Quarter Earnings Up 75 Percent; Revenue Increases 9 Percent; Free Cash Flow Strong.

Business Editors & High-Tech Writers

NOTE TO MEDIA: Multimedia assets available

LITTLE ROCK, Ark.--(BUSINESS WIRE)--Oct. 22, 2002

Acxiom(R) Corporation (Nasdaq:ACXM) today reported results for its second fiscal quarter ended September 30, 2002. Revenue and diluted earnings per share (EPS) of $235.4 million and $.17 ($.14 excluding a non-recurring item), respectively, met earlier guidance of $234 million to $237 million in revenue and EPS of $.14 to $.16. Free cash flow for the quarter of $45.3 million exceeded the Company's internal projection. Acxiom will hold a conference call at 8:00 a.m. CDT on October 23, 2002 to discuss this information further. Interested parties are invited to listen to the call, which will be broadcast via the Internet at www.acxiom.com.

"We are very encouraged by Acxiom's solid financial performance, especially in this continuing difficult economic climate," Company Leader Charles D. Morgan said. "The clearest evidence of the strength of our business is our free cash flow of $.45 per share this quarter and $1.81 per share over the last four quarters. Our free cash flow represents more than three times earnings over the last four quarters, which demonstrates the fundamental strength of our business."

Morgan added that "our core strategic services business remains strong - particularly in the financial services sector - while list sales and the other components of our business tied most directly to traditional direct marketing activity have shown weakness in this economy."

Highlights of Acxiom's second quarter performance include:

-- Revenue of $235.4 million, up 9 percent from $215.2 million in the second quarter a year ago. Excluding divested and acquired operations, revenue grew 11 percent.

-- Diluted earnings per share (EPS) of $.17, an increase of 113 percent compared to $.08 per share in the second quarter a year ago. Excluding a non-recurring item, diluted EPS was $.14, an increase of 75 percent over the same quarter a year ago.

-- The Company recorded a non-recurring gain of $4.1 million as a result of the reversal of a prior-year accrual for "over-attainment" bonuses.

-- Operating cash flow of $53.4 million and free cash flow of $45.3 million, (excluding net investments in joint ventures, acquisitions and dispositions) both strong for the fifth consecutive quarter. The free cash flow excludes $7.2 million used for net investments in joint ventures, acquisitions and dispositions.

-- As of September 30, the Company's line of credit balance was zero and the total cash and cash equivalents were $26.4 million.

-- New contracts with an annual value of $10 million, contract renewals that will contribute an additional $9 million in annual revenue, and committed new deals in the pipeline that will add $47 million in annual revenue.

-- Two government contracts to provide services in security-related and data-integration areas.

-- A year-over-year growth rate of 21 percent in the Company's highest-opportunity industries - financial services, retail, media & publishing, travel & entertainment, security & government and automotive.

"We have generated approximately $92 million in free cash flow in the first six months of the fiscal year and have used that cash to pay off our revolving line of credit," said Rodger S. Kline, Company Operations Leader. "As of today, we had over $25 million in invested cash and zero in draws against our lines of credit."

Since beginning its cash flow emphasis efforts five quarters ago, the Company has generated operating cash flow of more than $300 million and free cash flow of more than $220 million, excluding joint ventures, acquisitions and dispositions. Free cash flow was approximately $215 million including those investments and cash received from divestitures.

The company continued its growth in the automotive industry by winning new business with Volkswagen of America and Southeast Toyota Distributors, LLC, and by renewing agreements with The GM Card. Acxiom has also expanded or renewed its agreements with Unilever, Bank One, NA (Ohio), Ameritrade, Inc., and CDW Computer Centers, Inc.

Recognition

-- Bank Technology News in the second quarter named Acxiom as one

of 10 technology firms to watch, declaring that Acxiom was

among a small number of companies that are "not only nabbing

clients large and small, but drawing praise throughout the

industry" for finding better ways to tackle CRM, consumer

segmentations and other services.

-- Acxiom's InfoBase(R) Real-Time Enhancement product was

presented a "Smart Award" by Direct Response Magazine in the

United Kingdom for being "an innovative and creative use of

CRM, enabling access to multiple touch points in a real-time

environment."

Outlook

The financial projections stated today are based on the Company's current expectations. These projections are forward looking, and actual 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.

Our current assumption concerning general economic activity is that we expect some improvement during this fiscal year and our guidance is structured accordingly. Our guidance for the 2004 fiscal year, ending March 31, 2004, assumes no substantial change in the economy. Should the economy show substantial change, we would expect to update our guidance.

For the third quarter ending December 31, 2002, the Company expects revenue of $245 million to $250 million and earnings per share of $.17 to $.20. In the first quarter, the Company began phasing in salary reinstatements. During the first and second quarter, these reinstatements amounted to approximately $2.5 million and $3.5 million, respectively, and are expected to amount to approximately $5.0 million in the third quarter.

For the fiscal year ending March 31, 2003, the Company reconfirms that it expects revenue of approximately $970 million. This represents a revenue growth rate of 15 percent over fiscal 2002, adjusting for previously announced divestitures. Earnings per share are expected to be $.70, which takes into account approximately $16 million in phased reinstatement of salary reductions made in the 2002 fiscal year.

The Company projects free cash flow of approximately $150 million for fiscal 2003. The free cash flow contained in this release refers to free cash flow excluding the impact of investments in joint ventures or other business alliances and cash paid and/or received in divestiture activities. The Company has no way to forecast possible acquisitions, joint ventures and business alliances that are not currently contemplated, but which may subsequently present opportunities to advance the business.

For the fiscal year ending March 31, 2004, the Company expects an increase in revenue of 10 to 15 percent and earnings per share growth of 15 to 20 percent, assuming no substantial change in the economic environment.

About Acxiom Corporation

Acxiom Corporation (Nasdaq:ACXM) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration (CDI) technology, data content, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States, and in the United Kingdom, France and Australia.

This release and tomorrow'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 include but are not necessarily limited to the following: 1) that the business pipeline and that our current cost structure will allow the Company to continue to meet or exceed expectations; 2) that the revenue, earnings, cash flow, depreciation, amortization, EBITDA, capital expenditures, deferrals, capitalization of deferred expenses and software development costs, growth projections and phased reinstatement of salary reductions for future time periods will be within the indicated ranges; 3) that the Company will be able to continue to focus on all areas of cash flow including receivables collections, expense management and a rigorous capital expenditure process; 4) that the Company expects to generate positive free cash flow of approximately $150 million for fiscal year 2003; 5) that the Company expects to see continued improvement in revenues and earnings for fiscal 2003; 6) that AbiliTec(R) will continue to be a key differentiator of Acxiom solutions; 7) that the Company remains confident and optimistic about future performance; 8) that the Company has significant future opportunities related to providing data and data integration services to the public sector; 9) that the Company has significant future opportunities in security, fraud detection, risk management and privacy arenas; 10) that the company will be able to use certain tax loss carry forwards; 11) that the Company expects an increase in revenue for fiscal 2004 of 10 to 15 percent and in earnings per share of 15-20 percent; and 12) that the Company expects only some improvement in the general economic conditions for the remainder of fiscal 2003 and no substantial changes in general economic conditions for fiscal 2004. The following are important 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 closed within the anticipated time frames; the possibility that economic or other conditions might lead to a reduction in demand for the Company's products and services; the possibility that the current economic slowdown may worsen and/or persist for an unpredictable period of time; the possibility that economic conditions will not improve as rapidly as expected; the possibility that significant customers may experience extreme, severe economic difficulty; the possibility that sales cycles may lengthen; the continued ability to attract and retain qualified technical and leadership associates and the possible loss of associates to other organizations; the ability to properly motivate the sales force and other associates of the Company; the ability to achieve cost reductions and avoid unanticipated costs; the continued availability of credit upon satisfactory terms and conditions; the introduction of competent, competitive products, technologies or services by other companies; changes in consumer or business information industries and markets; the Company's ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; the difficulties encountered when entering new markets or industries; changes in the legislative, accounting, regulatory and consumer environments affecting the Company's business including but not limited to litigation, legislation, regulations and customs relating to the Company's ability to collect, manage, aggregate and use data; data suppliers might withdraw data from the Company, leading to the Company's inability to provide certain products and services; short-term contracts affect the predictability of the Company's revenues; the possibility that the amount of ad hoc project work will not be as expected; the potential loss of data center capacity or interruption of telecommunication links or power sources; postal rate increases that could lead to reduced volumes of business; customers that may cancel or modify their agreements with the Company; the potential disruption of the services of the United States Postal Service, their global counterparts and other delivery systems; the successful integration of any acquired businesses; and other competitive factors. With respect to the providing of products or services outside the Company's primary base of operations in the U.S., all of the above factors and the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations. Other factors are detailed from time to time in the Company's periodic reports and registration statements filed with the United States Securities and Exchange Commission. Acxiom believes that it has 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. Acxiom undertakes no obligation to update the information contained in this press release or any other forward-looking statement.

Acxiom, InfoBase and AbiliTec are registered trademarks of Acxiom Corporation.

Note: Financial statements are available at URL: http://www.businesswire.com/photowire/pw.102202/bb15.pdf