EX-99.1 2 d68623exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(INFOGROUP LOGO)
5711 S 86TH CIRCLE • PO BOX 27347 • Omaha NE 68127-0347
Executive Office: (402) 596-8900 • Fax (402) 596-8902
Internet: www.infoGROUP.com
FOR IMMEDIATE RELEASE
August 3, 2009
CONTACT:
Lisa Olson — Senior Vice President, Corporate Relations
Phone: (402) 593-4541
E-Mail: lisa.olson@infogroup.com
Thomas Oberdorf — Chief Financial Officer
Phone: (402) 593-4690
infoGROUP Reports Second Quarter Results
  •   infoGROUP reports net income of $612 thousand from a net loss of $9.3 million in the first quarter of 2009
 
  •   Revenue of $122.2 million compared to $148.5 million last year
 
  •   EPS was $0.01 this year compared to $0.08 last year and non-GAAP adjusted EPS was $0.15 compared to $0.17 last year
 
  •   Debt reduced by $5.8 million during the second quarter of 2009
(OMAHA, NE) — infoGROUP (NASDAQ: IUSA), the leading provider of data driven and interactive resources for targeted sales, marketing and research solutions today reported preliminary unaudited financial results for the second quarter of 2009 ending on June 30, 2009.
“We are pleased with the progress we have made during the past several quarters on moving the business forward in spite of the economic headwinds,” said Bill Fairfield, infoGROUP’s Chief Executive Officer. “We continue to remain ahead of schedule on our cost savings plans and outpace our original expectations.” Fairfield added, “In addition, we continue to reduce debt and are beginning to invest back into the business with new products and services to help generate new revenue, which provides a solid foundation for future growth for the Company.”
SECOND QUARTER RESULTS
GAAP Results
During the second quarter of 2009, infoGROUP delivered revenue of $122.2 million, compared to $148.5 million for the same period in 2008, representing a decline of $26.3 million or 18%. Excluding the effect of foreign exchange, the decline was $22.5 million or 15%.

 

 

infoGROUP’s operating income for the second quarter of 2009 was $1.5 million, which included $12.5 million of restructuring, non-recurring and non-cash charges, compared to $8.1 million in the second quarter of 2008, which included $8.3 million of similar charges.
infoGROUP’s net income for the second quarter of 2009 was $0.6 million, or earnings per share of $0.01, compared to net income of $4.3 million, or earnings per share of $0.08 in 2008.
Non-GAAP Results
infoGROUP’s adjusted earnings per share for the second quarter of 2009, excluding the restructuring, non-recurring and non-cash charges, was $0.15, compared to $0.17 for the second quarter of 2008, a decline of $0.02.
In the second quarter of 2009, EBITDA was $8.6 million compared to $16.6 million in 2008. Adjusted EBITDA, which excludes certain restructuring, non-recurring and non-cash charges, was $21.1 million in 2009, compared to $24.9 million in 2008. As a result of the cost cutting initiatives that were started last year and continued through the second quarter, we were able to offset most of the revenue decline experienced in the quarter.
In total, the Company recorded $12.5 million in costs during the quarter for restructuring, non-recurring and non-cash charges. This included $1.9 million in legal and professional fees related to the SEC investigation, $6.9 million in restructuring costs for severance associated with headcount reductions and facility closures, $3.2 million for impairments and write-down of assets, $0.1 million in litigation settlement charges and $0.4 million in non-cash stock compensation expense. All of these charges were recorded in selling, general and administrative expenses within operating expenses.
“During the second quarter of 2009, the Company achieved an incremental $2.3 million of cost savings,” said Tom Oberdorf, infoGROUP’s Chief Financial Officer. “Year to date we have recognized $8.4 million of cost savings from both our first quarter and second quarter initiatives, which will continue through the year, as well as new initiatives in the third and fourth quarters, which will further compound our savings.”
Fairfield concluded, “We are seeing a slight positive attitude in the market place, which we haven’t seen in the past few quarters. It is probably too early to call a trend, but we are cautiously optimistic.”
NON-GAAP INFORMATION
In addition to disclosing results determined in accordance with generally accepted accounting principles, or GAAP, infoGROUP also discloses the following non-GAAP measures: (1) earnings before interest expense, income taxes and depreciation and amortization, or EBITDA, (2) adjusted EBITDA excluding the effects of the non-recurring charges related to the Derivative Litigation, the Stipulation of Settlement, and the SEC investigation, restructuring costs, impairments and write-down of assets, litigation settlement charges, and non-cash stock compensation expense and (3) adjusted earnings (loss) per share excluding the effects of the non-recurring charges related to the Derivative Litigation, the Stipulation of Settlement and the SEC investigation, restructuring costs, impairments and write-down of assets, litigation settlement charges, and non-cash stock compensation expense.
Management believes EBITDA provides useful supplemental information to management and investors because management uses this information internally for evaluating the aggregate performance of the Company’s operating businesses. In addition, EBITDA is commonly used as an analytical indicator

 

 

within infoGROUP’s industry and is a component of the Company’s financial covenant calculations under its credit facilities, subject to certain adjustments. Additionally, management excludes the effects of the non-recurring charges related to the Derivative Litigation, the Stipulation of Settlement and the SEC investigation and the restructuring costs, impairments and write-down of assets, litigation settlement charges, and non-cash stock compensation expense because such items resulted from events that are non-recurring and are not part of on-going operations. Management believes that adjusted earnings per share and adjusted EBITDA provide useful supplemental information to management and investors because they better reflect the Company’s on-going performance and business operations during the periods presented and are more useful to investors for comparative purposes.
All companies do not calculate non-GAAP measures in the same manner and the non-GAAP financial measures presented in this press release may not be comparable to similar measures used by other companies. Non-GAAP measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP as measures of the Company’s profitability or liquidity.
See the tables in this press release for a reconciliation of net income to non-GAAP EBITDA and non-GAAP adjusted EBITDA, and earnings (loss) per share to non-GAAP adjusted earnings per share.
CONFERENCE CALL
The Company will host its second quarter conference call on August 4, 2009 at 8:30 a.m. Eastern time. To access the conference call, please dial 866-825-3308 (international 617-213-8062), passcode 43293737, approximately 10 minutes prior to the start of the call. A replay of the call will be available from 11:30 a.m. Eastern time, August 4, 2009 through midnight Eastern time, August 11, 2009. The replay number is 888-286-8010 (international 617-801-6888), passcode 75693548.
About infoGROUP
infoGROUP (NASDAQ: IUSA) is the leading provider of data and interactive resources that enables targeted sales, effective marketing and insightful research solutions. Our information powers innovative tools and insight for businesses to efficiently reach current and future customers through multiple channels, including the world’s most dominant and powerful Internet search engines and GPS navigation systems. infoGROUP headquarters are located at 5711 S. 86th Circle, Omaha, NE 68127. For more information, call (402) 593-4500 or visit www.infogroup.com.
Forward-looking Statements
Statements in this announcement other than historical data and information constitute forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology. The potential risks and uncertainties include, but are not limited to, recent changes in senior management, risks associated with litigation, the successful integration of recent and future acquisitions, fluctuations in operating results, failure to successfully carry out our Internet strategy or to grow our Internet revenue, effects of leverage, changes in technology and increased competition. More information about potential factors that could affect the company’s business and financial results is included in the company’s filings with the Securities and Exchange Commission.
(CONDENSED FINANCIAL STATEMENTS FOLLOW)

 

 

infoGROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
                                 
    FOR THE QUARTER ENDED     FOR THE SIX MONTHS ENDED  
    June 30, 2009     June 30, 2008     June 30, 2009     June 30, 2008  
    (unaudited)     (unaudited)  
Net sales
   $ 122,216     $ 148,489     $ 249,753     $ 301,781  
Costs and expenses
                                
Cost of goods and services
     45,908       52,099       92,897       103,289  
Selling, general and administrative
     66,973       79,706       137,109       161,966  
Depreciation and amortization of operating assets (1)
     5,000       5,308       9,759       10,516  
Amortization of intangible assets
     2,839       3,306       5,773       6,511  
 
                        
 
     120,720       140,419       245,538       282,282  
 
                        
Operating income
     1,496       8,070       4,215       19,499  
Other income (expense):
                                
Investment income (expense)
     1       (4 )     (1 )     1,355  
Other income (expense)
     (699 )     (44 )     (1,324 )     161  
Interest expense
     (2,160 )     (3,709 )     (5,406 )     (9,096 )
 
                        
 
                                
Income (loss) before income taxes
     (1,362 )     4,313       (2,516 )     11,919  
Income tax expense (benefit)
     (504 )     1,585       (931 )     4,475  
 
                        
 
                                
Net income (loss) from continuing operations
     (858 )     2,728       (1,585 )     7,444  
 
                                
Income (loss) from discontinued operations, net of tax
     1,470       1,609       (7,142 )     3,494  
 
                        
Net income (loss)
   $ 612     $ 4,337     $ (8,727 )   $ 10,938  
 
                        
 
                                
BASIC EARNINGS (LOSS) PER SHARE:
                                
Income (loss) from continuing operations
     ($0.01 )   $ 0.05       ($0.03 )   $ 0.13  
Income (loss) from discontinued operations
   $ 0.02     $ 0.03       ($0.12 )   $ 0.06  
 
                        
Net income (loss)
   $ 0.01     $ 0.08       ($0.15 )   $ 0.19  
 
                        
Basic weighted average shares outstanding
     57,570       56,798       57,220       56,632  
 
                        
 
                                
DILUTED EARNINGS (LOSS) PER SHARE:
                                
Income (loss) from continuing operations
     ($0.01 )   $ 0.05       ($0.03 )   $ 0.13  
Income (loss) from discontinued operations
   $ 0.02     $ 0.03       ($0.12 )   $ 0.06  
 
                        
Net income (loss)
   $ 0.01     $ 0.08       ($0.15 )   $ 0.19  
 
                        
Diluted weighted average shares outstanding
     57,570       56,799       57,220       56,636  
 
                        
 
(1)   Depreciation of tangible assets and amortization of capitalized software.

 

 

The following provides a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP adjusted EBITDA:
                                 
    FOR THE QUARTER ENDED     FOR THE SIX MONTHS ENDED  
    June 30, 2009     June 30, 2008     June 30, 2009     June 30, 2008  
    (unaudited)     (unaudited)  
GAAP net income (loss)
   $ 612     $ 4,337     $ (8,727 )   $ 10,938  
(Income) loss from discontinued operations
     (1,470 )     (1,609 )     7,142       (3,494 )
Interest expense
     2,160       3,709       5,406       9,096  
Income tax expense (benefit)
     (504 )     1,585       (931 )     4,475  
Depreciation and amortization of operating assets
     5,000       5,308       9,759       10,516  
Amortization of intangible assets
     2,839       3,306       5,773       6,511  
 
                        
Non-GAAP EBITDA
   $ 8,637     $ 16,636     $ 18,422     $ 38,042  
 
                        
Adjustments:
                                
SEC investigation / shareholder litigation expenses
   $ 1,868     $ 5,977     $ 5,701     $ 9,664  
Restructuring costs
     6,908       2,160       9,546       2,946  
Impairments and write-down of assets
     3,201       —       5,383       —  
Litigation settlement charges
     114       41       372       52  
Non-cash stock compensation expense
     395       103       822       265  
 
                        
Non-GAAP adjusted EBITDA
   $ 21,123     $ 24,917     $ 40,246     $ 50,969  
 
                        
The following provides a reconciliation of GAAP basic earnings (loss) per share to non-GAAP adjusted basic earnings per share:
                                 
    FOR THE QUARTER ENDED     FOR THE SIX MONTHS ENDED  
    June 30, 2009     June 30, 2008     June 30, 2009     June 30, 2008  
    (unaudited)     (unaudited)  
GAAP basic earnings (loss) per share from continuing operations
     ($0.01 )   $ 0.05       ($0.03 )   $ 0.13  
Effect of adjustments (see below)
   $ 0.14     $ 0.09     $ 0.24     $ 0.14  
 
                        
Non-GAAP adjusted basic earnings per share from continuing operations
   $ 0.13     $ 0.14     $ 0.21     $ 0.27  
 
                        
 
                                
GAAP basic earnings (loss) per share
   $ 0.01     $ 0.08       ($0.15 )   $ 0.19  
Effect of adjustments (see below)
   $ 0.14     $ 0.09     $ 0.24     $ 0.14  
 
                        
Non-GAAP adjusted basic earnings per share
   $ 0.15     $ 0.17     $ 0.09     $ 0.33  
 
                        
 
                                
Adjustments (detail in above table)
   $ 12,486     $ 8,281     $ 21,824     $ 12,927  
Income tax effect of adjustments
     4,620       3,105       8,075       4,848  
 
                        
Impact of adjustments on net income
   $ 7,866     $ 5,176     $ 13,749     $ 8,079  
 
                        
Basic weighted average shares outstanding
     57,570       56,798       57,220       56,632  
 
                        
Effect of adjustments on basic earnings (loss) per share from continuing operations and basic earnings (loss) per share
   $ 0.14     $ 0.09     $ 0.24     $ 0.14  
 
                        

 

 

infoGROUP INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
                 
    June 30,     December 31,  
    2009     2008  
    (unaudited)          
Assets
                
Cash and cash equivalents
   $ 7,603     $ 4,691  
Marketable securities
     611       992  
Accounts receivable
     42,304       56,030  
List brokerage accounts receivable
     66,540       86,841  
Unbilled services
     10,669       11,120  
Deferred income taxes
     5,196       6,889  
Income taxes receivable
     —       3,287  
Prepaid expenses
     11,207       9,382  
Escrow, current
     3,002       —  
Other receivables
     2,610       —  
Deferred marketing costs
     1,004       1,004  
Assets held for sale
     2,815       3,960  
Current assets of discontinued operations
     —       36,845  
 
            
Total current assets
     153,561       221,041  
 
            
Property and equipment, net
     54,270       59,235  
Goodwill
     353,088       377,708  
Intangible assets, net
     64,274       69,950  
Other assets
     2,445       2,505  
Escrow, noncurrent
     10,005       —  
Noncurrent assets of discontinued operations
     —       84,844  
 
            
 
   $ 637,643     $ 815,283  
 
            
Liabilities
                
Current portion of long-term debt
     2,837       2,899  
Accounts payable
     19,084       29,569  
Accounts payable-list brokerage
     59,420       79,827  
Accrued payroll expenses
     28,751       32,128  
Accrued expenses
     16,600       16,068  
Income taxes payable
     5,236       —  
Deferred revenue
     54,919       59,140  
Current liabilities of discontinued operations
     —       16,659  
 
            
Total current liabilities
     186,847       236,290  
 
            
Long-term debt, net of current portion
     190,618       297,745  
Deferred income taxes
     7,561       10,552  
Other liabilities
     7,218       5,417  
Noncurrent liabilities of discontinued operations
     —       16,406  
Stockholders’ equity
                
Common stock
     143       142  
Paid-in capital
     149,281       147,029  
Retained earnings
     106,199       114,926  
Note receivable — shareholder
     (6,800 )     (9,000 )
Accumulated other comprehensive loss
     (3,424 )     (4,224 )
 
            
Total stockholders’ equity
     245,399       248,873  
 
            
 
   $ 637,643     $ 815,283