-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NnfgS7mbXt9ck0fIK52klr4IllfHzUGoxjXY5UO2lCNgZP4RMYeGacc2T9jXw/WW +PW9Az9z9PJgZFJkaEY95g== 0000950134-03-013583.txt : 20031016 0000950134-03-013583.hdr.sgml : 20031016 20031016095124 ACCESSION NUMBER: 0000950134-03-013583 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031015 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFOUSA INC CENTRAL INDEX KEY: 0000879437 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331] IRS NUMBER: 470751545 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19598 FILM NUMBER: 03942963 BUSINESS ADDRESS: STREET 1: 5711 S 86TH CIRCLE CITY: OMAHA STATE: NE ZIP: 68127 BUSINESS PHONE: 4025934500 MAIL ADDRESS: STREET 1: 5711 SOUTH 86TH CIRCLE CITY: OMAHA STATE: NE ZIP: 68127 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BUSINESS INFORMATION INC /DE DATE OF NAME CHANGE: 19930328 8-K 1 d09736e8vk.htm FORM 8-K e8vk
Table of Contents

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 15, 2003

infoUSA INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
         
DELAWARE   0-19598   47-0751545
(STATE OR OTHER JURISDICTION OF   (COMMISSION FILE NUMBER)   (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)       IDENTIFICATION NO.)

5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA 68127
(Address of principal executive offices) (Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (402) 593-4500

NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

 


Item 7. Financial Statements and Exhibits
Item 9. Regulation FD Disclosure (Information Being Furnished Under 12).
SIGNATURES
EXHIBIT INDEX
EX-99.1 Press Release


Table of Contents

Item 7. Financial Statements and Exhibits

(c) Exhibits

The following exhibit is furnished pursuant to Item 9 and Item 12:

     99.1 Press release issued by the registrant on October 15, 2003.

Item 9. Regulation FD Disclosure (Information Being Furnished Under 12).

     In accordance with the Securities and Exchange Commission Release No. 33-8216, the following information, which is intended to be furnished under Item 12, “Results of Operations and Financial Condition,” is instead being furnished under Item 9, “Regulation FD Disclosure.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

     On October 15, 2003, the registrant issued a press release regarding the registrant’s results of operations for the quarter and nine months ended September 30, 2003. The full text of the press release is filed as Exhibit 99.1 to this Form 8-K.

 


Table of Contents

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

             
    INFOUSA INC.    
             
    By   /s/ Raj Das    
       
   
        Raj Das,    
        Chief Financial Officer    

Dated: October 15, 2003

 


Table of Contents

EXHIBIT INDEX

             
Exhibit No.   Description        

 
       
99.1   Press Release dated October 15, 2003.

  EX-99.1 3 d09736exv99w1.htm EX-99.1 PRESS RELEASE exv99w1

 

(infoUSA LOGO)   Exhibit 99.1
5711 S 86TH CIR.
PO BOX 27347 • Omaha NE 68127-0347
Executive Office: (402) 596-8900 • Fax (402) 592-4006
Internet: www.infoUSA.com
     
    FOR IMMEDIATE RELEASE
OCTOBER 15, 2003
CONTACT:
    VIN GUPTA – CHAIRMAN & CHIEF EXECUTIVE OFFICER
Phone: (402) 596-8900 • Fax: (402) 339-0265
E-Mail: vin.gupta@infoUSA.com
RAJ DAS – CHIEF FINANCIAL OFFICER
Phone: (402) 593-4517 • Fax: (402) 339-0265
E-Mail: raj.das@infoUSA.com
LAUREL GOTTESMAN – DIRECTOR, INVESTOR RELATIONS
Phone: (402) 593-4535 • Fax: (402) 339-0265
E-Mail: laurel.gottesman@infousa.com

infoUSA Announces Third Quarter Results and
Blueprint for Revenue Growth

(OMAHA, NE) — infoUSA® (Nasdaq: IUSA) The following table presents the financial results, key financial highlights of the company’s operations and selected balance sheet items for the third quarter of 2003.

                                 
(amounts in thousands, except per share amounts)   3rd Qtr 2002   3rd Qtr 2003   YTD 2002   YTD 2003

 
 
 
 
Net sales
    77,171       77,379       227,936       232,290  
EBITDA (see table on income statement)
    20,926       16,824       63,979       60,558  
 
   
     
     
     
 
Operating income
    14,113       9,742       42,886       39,199  
Depreciation and amortization of operating assets
    3,480       3,696       11,072       11,254  
Intangible asset amortization
    3,325       3,310       9,986       9,960  
Non-cash stock compensation
    8       76       35       145  
infoUSA bond repurchase charges
    115       2,240       115       4,820  
 
   
     
     
     
 
Net income
    6,404       3,632       15,496       15,212  
Total debt
    198,758       153,387       198,758       153,387  
Interest expense
    3,404       2,243       12,562       9,500  
Capital expenditures
    1,048       2,530       4,273       6,126  
 
   
     
     
     
 
Accounts receivable (DSO) – without Walter Karl (1)
    47       42       48       42  


(1)   Walter Karl is a list broker. Trade accounts receivable and trade accounts payable are reflected at gross on the balance sheet.

 


 

RESULTS OF OPERATIONS

Vin Gupta, Chairman and CEO, infoUSA, said, “During the third quarter, two items reduced our reported earnings per share by $0.05 to $0.07. First, an accrual for litigation charges of $1.7 million involving a former employee’s stock options. Second, special charges totaling $2.2 million related to the redemption of $31 million of our high yield bonds. This bond redemption benefits the company by reducing future interest payment obligations.

“Our third quarter EBITDA of $16.8 million decreased by $4.1 million due to three factors. First, an accrual of $1.7 million for the aforementioned litigation charge. Second, the pre-planned increase in advertising and selling expenses as we hired additional sales professionals and we increased our mailings of catalogs and brochures. The third factor was that we did not achieve our expected revenue growth in Polk City Directories.”

“Over the third quarter, we progressed at our goal of growing revenue internally. Excluding the temporary setback at Polk, revenues at our two core business groups increased significantly. Our Small Business Group recorded revenue of $37.9 million during the third quarter. Excluding Polk City Directories, Small Business Group revenue grew by 8%, as we intensified our marketing and advertising efforts. Our Large Business Group revenue of $39.5 million remained strong, up 9%. Despite weakness in the ‘email acquisition’ business, our email division was profitable due to the strength of our ‘email retention’ business and our success at providing our large business customers with integrated database marketing and email management solutions. We have combined the Yesmail/ClickAction® companies at one location in San Carlos, California. By this combination, we are able to capitalize on the synergies of the two organizations.”

“We continue to de-leverage the company. Our strong operating cash flow enabled us to significantly reduce long-term debt to $153 million at the end of the third quarter, from $199 million the prior year. We have restructured our long-term credit facility and used a portion of the proceeds to purchase and redeem $62 million of our high yield bonds over the past nine months. In conclusion, we anticipate that internal revenue growth, encouraged by the increased marketing and advertising efforts, as well as lower interest costs, will enable us to accelerate our future growth in earnings and in shareholder value.”

BLUEPRINT FOR FUTURE GROWTH

Gupta continued, “As previously announced, we have appointed Rob Jelinek our new general manager for Polk. He was a senior level sales professional at Procter & Gamble (NYSE: PG). He plans to grow revenue by bundling our printed directories with DVD and internet access for the Polk City Directories, at an affordable monthly subscription price. The subscription price will include many new features including frequent updates, greater selection features and downloadable information. The Polk City Directories will not only be a reference tool for small businesses, but also a sales and marketing tool. Rob Jelinek will also be hiring and training many new sales people to market this expanded set of solutions to small businesses.”

“A major component of our blueprint for internal revenue growth will be to lease our directory products in bundled format on a monthly subscription basis. The bundles will include a printed directory, DVD with four updates, Internet access and personalized service. We believe that our customer is willing to pay for complete solutions. We are hiring more sales people so they will be in touch with their customer on a monthly basis, making sure they are using the product and also to act as a consultant to help them in sales prospecting.”

“Another avenue of internal revenue growth will be the successful launch of our Sales Genie® solution to a wide audience of small businesses. Sales Genie® offers small business customers a dedicated PC that

 


 

includes infoUSA’s databases of businesses, consumers and business credit reports for their market area and sales prospecting software. The customer receives four updates to their DVD product. The DVD allows them lightning fast access, even if the internet is not available. The databases are continuously updated and available on demand. Sales Genie® represents a total sales prospecting and lead generation solution for small businesses at an affordable monthly subscription price of $250. We believe that most small businesses like to have a buffet of all products and services for sales prospecting at a reasonable price per month. Our recent launch of Sales Genie® in the Tampa/St. Pete market area and Omaha market area, leads us to believe that this is the right strategy to approach small businesses. In addition, every customer is assigned an account executive whose responsibilities include visiting customers once a month, face-to-face, to make sure that they are using the product and they teach the customer new applications, so that Sales Genie® becomes an integral part of their sales prospecting and marketing applications. We believe that the success that the Bloomberg® Terminal achieved in the financial industry, can easily be attained by Sales Genie® in the small business market as the premier sales prospecting application.”

“The Company has retained ZS Associates to conduct a marketing study of small businesses and their needs for sales prospecting. This study will help us match our products to the customer needs.”

“We have also retained AdStore®, a leading Washington, DC based advertising agency for a major launch of Sales Genie® in the Tampa/St. Pete market area. AdStore® is a small boutique ad agency with clients like JetBlue®. We believe branding and advertising is the key to the success of Sales Genie®.”

“We just launched our SalesLeadsUSA® product which will be sold through the retail channel. This DVD based product is meant for sales people and entrepreneurs. The early indications are that the sell through of these products through retailers has been better than expected. We intend to provide more advertising support for these products. We believe there are potentially 20 million sales people, such as real estate agents, insurance agents, stock brokers, contractors, multiple channel sales people, and work at home entrepreneurs. These sales people or entrepreneurs are willing to spend $25 per month for a sales prospecting database. Our SalesLeadsUSA® product gives them exactly that. They can find sales leads for their products and services in their local area and become more efficient. We are also experimenting with Direct Response TV for selling the SalesLeadsUSA® products to this marketplace. We have also upgraded our subscription sales department under the leadership of Jim Bata. It is our intention that every subscriber should be contacted once per month so that we can help them in using the product and have a higher retention of our subscription customers.”

“The growth of our organization depends on quality management. In the recent months, we have recruited many high caliber executives who have experience in the industry. To name a few, we have hired Rob Jelinek, Jim Bata, Bill Miklas, Raj Das, Tom Alison, Shirlee Jacobson, Chuck Hendriks, Diane Richardson, Ed Henrich and many other mid level executives. We believe that these key executives will help us in our growth next year.”

Gupta concluded, “At infoUSA we could easily coast, produce 30% EBITDA and be a cash cow. But we believe that that is not enough. We see a potential market of 3.8 million small businesses at $3,000 per year. That means $11 billion per year market potential. We plan to capture more and more of that market share. To accomplish that, we will be investing in product development, advertising, marketing, more sales people, more training for our customers and more branding. We believe that this investment is the right thing to do for the long-term growth of the company. During the last six months, we have been focusing on this growth and we believe that in the future we will see positive results.”

 


 

Highlights of the Third Quarter:

Net Sales, Operating Income and EBITDA
Net sales for the third quarter 2003 were $77.4 million versus $77.2 million in the third quarter of 2002. Operating income was $9.7 million compared with $14.1 million for the third quarter of the prior year. The decrease in operating income resulted primarily from lower than expected revenue at the Polk Directory division as well as a $1.7 million litigation settlement charge. These two items also impacted third quarter EBITDA, which was $16.8 million versus $20.9 million for the year-ago quarter.

Earnings per Share
Earnings per share for the third quarter of 2003 were $0.07 versus $0.12 for the comparable quarter of 2002. The earnings per share for third quarter 2003 included special charges of $3.9 million as follows: (i) $0.7 million for the write-off of deferred financing charges for the redemption of $30.8 million of high yield bonds; (ii) $1.5 million for the $.0475 per bond premium paid at redemption; and (iii) $1.7 million of litigation settlement charge involving a former employee’s stock options. These special charges reduced our reported earnings per share by $0.05 to $0.07.

OPERATING HIGHLIGHTS

Large Customer Group – Donnelley Marketing, Walter Karl and Database Licenses

The Large Customer group reported third quarter 2003 revenue of $39.5 million, up 9% from $36.1 million for the comparable quarter of the prior year. The group has been able to grow its revenue by better training of its sales force in selling the company’s proprietary database products, which are of the highest quality in the industry.

Small Business Group

The Small Business Group reported third quarter 2003 revenue of $37.9 million, down from $41.1 million the prior year. Excluding the weakness in Polk Directories, which primarily caused the revenue decline, the group experienced an 8% revenue growth, which includes double-digit revenue growth in several of its divisions, namely, Reference USA, National Directories, Major Accounts Division and Consumer Lists.

Conference Call

The company will host its third quarter conference call on Thursday, October 16th, at 11:00 AM Eastern time. To access the conference call, please dial 913/981-5537, passcode # 535866, approximately 10 minutes prior to the start of the call. A replay of the call will be available from 2:00 PM Eastern time, October 16th, through midnight Eastern Time, October 23rd. The replay number is 719/457-0820, passcode # 535866. A live webcast of the conference call will be available at the company’s web site, http://www.infousa.com, by clicking on the Investor Relations button on the infoUSA Home page.

 


 

About infoUSA
infoUSA (www.infoUSA.com), founded in 1972, is the leading provider of business and consumer information products, database marketing services, data processing services and sales and marketing solutions. Content is the essential ingredient in every marketing program, and infoUSA has the most comprehensive data in the industry, and is the only company to own a proprietary database of 250 million consumers and 14 million businesses under one roof. The infoUSA database powers the directory services of the top Internet traffic-generating sites, including Yahoo! (Nasdaq:YHOO — news) and America Online (NYSE: AOL). Nearly 3 million customers use infoUSA’s products and services to find new customers, grow their sales, and for other direct marketing, telemarketing, customer analysis and credit reference purposes. infoUSA headquarters are located at 5711 S. 86th Circle, Omaha, NE 68127 and can be contacted at (402) 593-4500.

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. The potential risks and uncertainties include, but are not limited to, recent changes in senior management, 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.

(INCOME STATEMENT FOLLOWS)

 


 

infoUSA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

                                   
      FOR THE QUARTERS ENDED   FOR THE NINE MONTHS ENDED
     
 
      September   September   September   September
      30, 2002   30, 2003   30, 2002   30, 2003
     
 
 
 
Net sales
    77,171       77,379       227,936       232,290  
Costs and expenses:
                               
 
Database and production costs
    20,618       21,416       63,191       64,556  
 
Selling, general and administrative
    34,711       36,827       98,558       103,825  
 
Depreciation and amortization of operating assets
    3,480       3,696       11,072       11,254  
 
Amortization of intangible assets
    3,325       3,310       9,986       9,960  
 
Non-cash stock compensation
    8       76       35       145  
 
Restructuring costs
    804       645       1,616       1,630  
 
Litigation settlement charge
    110       1,667       417       1,667  
 
Acquisition costs
    2             175       54  
 
   
     
     
     
 
 
    63,058       67,637       185,050       193,091  
 
   
     
     
     
 
Operating income
    14,113       9,742       42,886       39,199  
Other income (expense):
                               
 
Investment income
    35       394       133       1,222  
 
Other charges – Note 1
    (115 )     (2,240 )     (5,355 )     (6,385 )
 
Interest expense
    (3,404 )     (2,243 )     (12,562 )     (9,500 )
 
   
     
     
     
 
Income before income taxes
    10,629       5,653       25,102       24,536  
Income taxes
    4,225       2,021       9,606       9,324  
 
   
     
     
     
 
Net income
    6,404       3,632       15,496       15,212  
 
   
     
     
     
 
BASIC & DILUTED EARNINGS PER SHARE:
                               
 
Basic earnings per share
    0.12       0.07       0.30       0.30  
 
Diluted earnings per share
    0.12       0.07       0.30       0.30  
 
Basic weighted average shares outstanding
    50,991       51,676       50,935       51,351  
 
Diluted weighted average shares outstanding
    50,991       52,357       51,018       51,453  

     The following provides a reconciliation of net income to EBITDA:

                                   
      FOR THE QUARTER ENDED   FOR THE NINE MONTHS ENDED
     
 
      September   September   September   September
      30, 2002   30, 2003   30, 2002   30, 2003
     
 
 
 
Net Income
    6,404       3,632       15,496       15,212  
 
Other charges — Note 1
    115       2,240       5,355       6,385  
 
Investment income
    (35 )     (394 )     (133 )     (1,222 )
 
Interest expense
    3,404       2,243       12,562       9,500  
 
Income taxes
    4,225       2,021       9,606       9,324  
 
Depreciation and amortization of operating assets
    3,480       3,696       11,072       11,254  
 
Amortization of intangible assets
    3,325       3,310       9,986       9,960  
 
Non-cash stock compensation
    8       76       35       145  
 
   
     
     
     
 
EBITDA
    20,926       16,824       63,979       60,558  
 
   
     
     
     
 

Note 1 – Other charges includes costs incurred by the Company to repurchase its outstanding bonds totaling $2.2 million for the third quarter of 2003 and $4.8 million for the nine months ended September 30, 2003.

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