8-K

UNITED STATES
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): January 20, 2005

infoUSA Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

0-19598 (Commission File Number)	47-0751545 (I.R.S. Employer Identification No.)
5711 South 86th Circle Omaha, Nebraska (Address of Principal Executive Offices)	68127 (Zip Code)

(402) 593-4500
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     The following information is being furnished pursuant to Item 2.02 of Form 8-K. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

     On January 20, 2005, infoUSA Inc. (the “Company”) issued a press release providing results of operations for the fiscal year ended December 31, 2004 and guidance for fiscal year 2005. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

     The attached press release includes certain financial information that has been determined by methods other than in accordance with GAAP. These non-GAAP financial measures are “EBITDA,” “capital expenditures” and “free cash flow.” Such measures are not measures of financial performance or liquidity under GAAP and should not be considered as alternatives to the comparable GAAP measures for the applicable period. The Company has presented reconciling information for each of the above non-GAAP financial measures in the press release. The Company uses these non-GAAP financial measures in its analysis of the Company’s performance.

•   “EBITDA” is defined as net income before interest expense, income taxes, depreciation and amortization of operating assets, and amortization of intangible assets. The Company’s management utilizes this measure as a key financial measure in the analysis of its financial performance, as it does with similar GAAP financial measures including operating income and cash flows from operations. The Company’s Credit Facility provides for financial covenants that are based on EBITDA, as adjusted. Additionally, the Company has historically had a significant amount of recorded goodwill and purchased intangibles resulting from the acquisition of other companies, and the amount of non-cash amortization expense associated with these acquisitions has varied significantly between reporting periods. The Company’s calculation of EBITDA is defined by footnote in the accompanying financial data table.

•   “Free cash flow” is defined as cash flow from operations minus capital expenditures. “Capital expenditures” consists of the sum of purchases of property and equipment and capitalized software and database development costs as reported on the Company’s consolidated cash flows statement. The Company’s management utilizes these measures as a key financial measure in the analysis of its financial performance, as it does with similar GAAP financial measures including operating income and cash flows from operations.

2

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits. The following exhibits are furnished herewith:

Exhibit 99.1 Press Release dated January 20, 2005

3

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. (Registrant)
Date: January 20, 2005	By:	/s/ RAJ DAS
		Raj Das,
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
Exhibit 99.1	Press Release dated January 20, 2005

EX-99.1

EXHIBIT 99.1 — Press release

	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 January 20, 2005
	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 GUPTA — DIRECTOR, INVESTOR RELATIONS Phone: (402) 593-4535 · Fax: (402) 339-0265 E-Mail: laurel.gupta@infousa.com

infoUSA Reports Record Revenue and Strong Results for FY2004

•   GAAP Revenue of $344.9 Million, up 11% from last year, exceeds latest management guidance

•   GAAP EPS of 35 cents, exceeds latest management guidance and consensus Wall Street estimate

•   Free Cash Flow of $66.0 Million, 19% of GAAP Revenue, exceeds latest management guidance

•   Confirms previous revenue and EPS guidance for fiscal year 2005

•   Revises upward its Free Cash Flow guidance for fiscal 2005

(OMAHA, NE) — infoUSA^Ò (Nasdaq: IUSA). The following table presents the financial results, key financial highlights of the company’s operations, and selected balance sheet items for the fourth quarter and full fiscal year of 2004 ending on December 31, 2004.

	4th Quarter		4th Quarter			Year-to-date		Year-to-date
(amounts in thousands, except per share amounts)	2003		2004			2003		2004
Net sales	$	79,055	$	90,082		$	311,345	$	344,859
EBITDA (see table on income statement)		15,913		19,452	*		71,163		68,919	**
Operating income		9,351		11,288	*		48,550		41,329	**
Net income		4,483		5,328			19,695		18,458
Diluted earnings per share	9 cents		10 cents			38 cents		35 cents
Total debt		139,765		196,226			139,765		196,226
Capital expenditures (see table)		1,225		1,342			6,625		6,957
Cash Flow from Operations		19,020		27,165			56,564		72,956

*	These figures were negatively impacted by approximately $6.9 million related to acquisition accounting of OneSource and conversion of a portion of infoUSA Group business to subscription format.
**	These figures were negatively impacted by approximately $17.9 million related to acquisition accounting of OneSource and conversion of a portion of infoUSA Group business to subscription format.

RESULTS OF OPERATIONS

Vin Gupta, Chairman and CEO, infoUSA, said, “During 2004, we achieved record revenues of $344.9 million, as well as solid profitability. We were able to grow our revenues through strong organic results in most of our key revenue divisions as well as successful integration of our recent acquisitions. We generated this revenue growth while at the same time achieving adjusted EBITDA margins of 24%. Our fiscal 2004 reported revenues were negatively impacted by approximately $18 million related to acquisition accounting of OneSource and conversion of a portion of our infoUSA Group business to subscription format. Our full year EBITDA was $68.9 million or 20% of revenues. EBITDA for the full year was negatively impacted by aforementioned accounting impact of approximately $18 million. We have generated $66.0 million of free cash flow (calculated as cash flow from operations less capital expenditures) for the full year 2004. Our GAAP earnings per share for fiscal 2004 were 35 cents. Our results for fiscal 2004 exceeded our latest guidance to Wall Street. These results have positioned us well to meet or exceed our previous revenue and EPS guidance for fiscal 2005. Based on these results, we are also increasing our median free cash flow projection for 2005 to $70 million.”

Gupta continued, “We were very satisfied with our fiscal 2004 performance. We have fully integrated our three acquired companies, i.e. OneSource, Edith Roman and Triplex. Their contribution to our cash flow has been better than expected. They will continue to enhance our revenue growth and operating margins by cross-selling more of our proprietary data content products to their existing customer bases. These acquisitions have also strengthened our already strong pipeline of new business for fiscal 2005, as evidenced by our $33 million increase in deferred revenue during 2004.”

“Our roll-out of subscription products is proceeding on plan, and is gaining acceptance among small businesses, entrepreneurs, and sales people. We were able to build this subscription base while at the same time keeping our cancellation rates below 10%. Our ‘Unlimited Sales Leads and Mailing List’ service (Sales Genie™) has been a real hit with small businesses. Now they have access to unlimited sales leads for only $250 per month. They also get free and integrated contact management software and mapping capability. Our strategy of migrating our small business customers from one-time purchasers of sales leads to a subscription based service will be a key growth driver of infoUSA.”

“Due to our cost cuts and early integration of acquisitions, we have been able to get closer to our historical EBITDA margin levels again. We finished fourth quarter of 2004 with an adjusted EBITDA margin of approximately 27%. We are also investing in migrating our mainframe-based infrastructure to a server-based environment to deliver more expedient, reliable, and affordable data processing solutions to our customer base in 2005 and beyond. The effective migration to a server-based architecture will enable us to reduce significantly our data processing hardware and software

costs. We feel confident that we can deliver expected internal growth and EBITDA margins to our shareholders going forward.”

Gupta added, “We continued to strengthen our balance sheet throughout the year. We used approximately $54 million of our free cash flow to pay down our debt. Our plan is to continue de-leveraging our balance sheet through prudent cash management. Our Board of Directors is also considering a dividend payment in 2005 to reward our loyal shareholders, who will be able to take advantage of lower tax rates.”

Gupta continued, “We have several database enhancement initiatives in 2005 that will enable us to stay on the cutting edge of our industry. In 2004 we started taking pictures of store fronts along with entering precise latitudes and longitudes called geocodes. In 2005 we will kick this project into high gear and take around 4 million pictures in 100 largest metropolitan areas. These pictures will add value to our Business Credit Reports and Sales Leads products. Additionally, we will license them to value added resellers to be used in applications like car navigation, legal due diligence services, and financial services applications.”

“We are in the process of enhancing our Business Credit Report by suggesting the recommended credit limit on 13 million businesses in our database. This credit limit amount will be offered in addition to our proprietary Business Credit Score on each business in our database.”

“During the first quarter of 2005, we are also enhancing our consumer database to include lifestyle information on most of our web sites. The web will enable a greater distribution of the valuable lifestyle information to our customers.”

“We will be publishing a report on Yellow Page Ad Spending by Small Businesses by March of this year. The report will include money spent by small businesses for Yellow Page advertising. Yellow Page publishers and web advertising firms will be able to sort this information by many selects, including by individual business as well as by SIC code and any geographic region. Combined these initiatives will provide us with a significant competitive edge for our already finest database in the industry.”

Gupta concluded, “We have built a strong management team whose dedication and commitment will enable us to provide solid growth. We have the highest quality database of consumers and businesses in the U.S. and Canada. The database has many different applications for small businesses, non-profit organizations, governmental entities, and Fortune 1000 companies. We also control our distribution channel with our sales force of over 1,000 sales executives. We feel confident that our recent initiatives around subscription products will lead us to the next level of growth.”

Highlights of Fourth Quarter:

Net sales for the fourth quarter were $90.1 million compared to $79.1 million for the fourth quarter of 2003. EBITDA for the fourth quarter was $19.5 million, or 22% of net sales, compared to $15.9 million, or 20% of net sales, for the fourth quarter of last year. EBITDA for the fourth quarter was impacted negatively by approximately $6.9 million as follows: (i) non-recognizable deferred revenue

from the OneSource acquisition of $3.2 million and (ii) deferral of approximately $3.7 million of revenues from accounting for our subscription product revenue. The increase in EBITDA margin for the fourth quarter is attributable to: (i) margin expansion in our core business through strict cost cutting initiatives and (ii) successful integration of our recent acquisitions.

Fourth quarter GAAP earnings per share were 10 cents versus earnings per share of 9 cents for the fourth quarter of 2003. The aforementioned factors contributed to the growth of earnings per share. Free cash flow (cash flow from operations less capital expenditures) for fiscal fourth quarter was $25.8 million, or 29% of net sales, compared to $17.8 million, or 23% of net sales, for the prior year period.

Highlights of Fiscal Year 2004:

Net sales for the fiscal year 2004 were $344.9 million compared to $311.3 million for 2003. EBITDA for 2004 was $68.9 million, or 20% of net sales, compared to $71.2 million, or 23% of net sales for the previous year. EBITDA for 2004 was impacted negatively by approximately $17.9 million as follows: (i) non-recognizable deferred revenue from the OneSource acquisition of $9.0 million and (ii) deferral of approximately $8.9 million of revenues from accounting for our subscription product revenue.

Fiscal 2004 GAAP earnings per share were 35 cents versus earnings per share of 38 cents for fiscal 2003. The aforementioned accounting impact was primarily responsible for a lower earnings per share in 2004 versus 2003. Cash flow from operations for fiscal 2004 was $73.0 million, or 21% of net sales, compared to $56.6 million, or 18% of net sales for the prior year. Free cash flow (cash flow from operations less capital expenditures) for fiscal 2004 was $66.0 million, or 19% of net sales, compared to $49.9 million, or 16% of net sales for the prior year.

Deferred revenue liability on the balance sheet as of December 31, 2004 was $53.0 million, an important measure of contractually obligated revenue for the company. The company also had an incremental $45.1 million of unbilled contractually obligated revenue at the end of the year that is not reflected on the balance sheet. Deferred revenue on the balance sheet combined with the unbilled contractually obligated revenue provides a good measure of the business in the pipeline for the company over next twelve months.

OPERATING HIGHLIGHTS

The Donnelley Group (Large Business Group)

The Donnelley Group, previously known as the Large Business Group, reported fourth quarter 2004 revenues of $57.0 million, up 38% from the comparable quarter of 2003, and full year 2004 revenues of $200.3 million, up 28% from the previous year. Much of the growth was due to the recent acquisition of Triplex, OneSource, and Edith Roman, which have provided better than expected contributions to our operating margins. Our organic revenue growth in this segment was 3% for the full year 2004. Under the leadership of Ray Butkus, Ed Mallin, Dan Gust, Yvonne Cekel, and Ed

Henrich, the Donnelley Group is totally focused on cross-selling our various products and services to customers and long-term organic revenue growth of over 10%.

The infoUSA Group (Small Business Group)

The infoUSA Group, formerly known as the Small Business Group, reported 2004 fourth quarter revenues of $33.1 million, compared to $37.6 million in the fourth quarter of last year. The primary reason for the decline was the impact from subscription accounting during the fourth quarter of approximately $3.7 million. For fiscal year 2004, this group had revenue of $144.5 million, versus $155.4 million last year. The primary reason for the decline was the impact from subscription accounting during the fiscal 2004 of approximately $8.9 million, including lower recognized revenue from our Sales Genie™ product due to subscription revenue recognition.

This Group consists of approximately 20 small business units that offer directory products, vertical databases, online sales leads, custom sales leads and products for sales people and SOHO markets. Most of these divisions are being very successful in migrating a significant portion of their business to subscription products. Conversions from one-time sales to this subscription format have caused this Group to experience short-term reductions in reported GAAP revenue due to accounting for subscription products because revenue from subscriptions are recognized over the subscription period instead of at the time of sale. Our recently introduced Sales Genie™, SalesLeadsUSA™, and Credit.Net™ products have been embraced by the small business marketplace. While these subscription products have short-term negative impact on our recognized GAAP revenues, they provide the critical impetus for our long-term goal of over 10% organic revenue growth for infoUSA Group. Our Polk Directories division is also selling its directories, DVD, and Internet access on subscription basis. This migration is taking place to our satisfaction.

OUTLOOK FOR FISCAL 2005

Based on the revenue growth initiatives in its infoUSA Group and early acquisition integrations in its Donnelley Group, infoUSA management feels optimistic about continuing to execute on its current product and marketing strategies to drive organic revenue growth while producing healthy EBITDA margins and earnings per share. During 2005, the accounting impact related to OneSource revenue and subscription products will total less than $6 million. The company is re-confirming its previous guidance for 2005 revenues, EBITDA, and earnings per share as follows: (i) GAAP revenues for fiscal 2005 is projected to be approximately $390 million to $400 million; (ii) EBITDA for fiscal 2005 is projected to be approximately $98 million to $102 million; and (ii) GAAP earnings per share for fiscal 2005 is projected to be approximately 63 cents to 67 cents. The company is revising upward its previous guidance for 2005 free cash flow to be approximately $68 million to $72 million.

Conference Call

The company will host its fourth quarter conference call on January 21^st, at 11:00 AM Eastern time. To access the conference call, please dial 800/901-5259, passcode #50207152, approximately 10 minutes prior to the start of the call. A replay of the call will be available from 1:00 PM Eastern

time, January 21^st, through midnight Eastern Time, January 28^th. The replay number is 888/286-8010, passcode # 18704951. A live webcast of the conference call will be available at the company’s Investor Relations web site, http://ir.infousa.com.

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. 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 TWELVE
	FOR THE QUARTER ENDED						MONTHS ENDED
	Dec 31,			Dec 31,			Dec 31,			Dec 31,
	2003			2004			2003			2004
	(unaudited)
Net sales	$	79,055		$	90,082		$	311,345		$	344,859
Costs and expenses:
Database and production costs		22,518			26,520			87,074			102,838
Selling, general and administrative		40,243			43,469			144,068			166,715
Depreciation and amortization of operating assets		3,319			3,665			14,573			14,062
Amortization of intangible assets		3,316			4,404			13,276			15,875
Non-cash stock compensation		74			184			219			779
Restructuring costs		231			552			1,861			2,940
Litigation settlement charge		0			0			1,667			0
Acquisition costs		3			0			57			321
		69,704			78,794			262,795			303,530
Operating income		9,351			11,288			48,550			41,329
Other income (expense):
Investment income (loss)		(73	)		29			1,149			(190	)
Other charges		0			66			(6,385	)		(2,157	)
Interest expense		(2,047	)		(2,788	)		(11,547	)		(9,210	)
Income before income taxes		7,231			8,595			31,767			29,772
Income taxes		2,748			3,267			12,072			11,314
Net income	$	4,483		$	5,328		$	19,695		$	18,458
BASIC & DILUTED EARNINGS PER SHARE:
Basic earnings per share	$	0.09		$	0.10		$	0.38		$	0.35
Diluted earnings per share	$	0.09		$	0.10		$	0.38		$	0.35
Basic weighted average shares outstanding		52,245			53,116			51,576			52,851
Diluted weighted average shares outstanding		52,526			53,979			51,714			53,564

The following provides a reconciliation of net income to EBITDA:

	FOR THE QUARTER				FOR THE TWELVE
	ENDED				MONTHS ENDED
	December		December		December		December
	31, 2003		31, 2004		31, 2003		31, 2004
Net income	$	4,483	$	5,328	$	19,695	$	18,458
Interest expense		2,047		2,788		11,547		9,210
Income taxes		2,748		3,267		12,072		11,314
Depreciation and amortization of operating assets		3,319		3,665		14,573		14,062
Amortization of intangible assets		3,316		4,404		13,276		15,875
EBITDA	$	15,913	$	19,452	$	71,163	$	68,919

The following provides a schedule of Capital Expenditures:

	FOR THE QUARTER				FOR THE TWELVE
	ENDED				MONTHS ENDED
	December		December		December		December
	31, 2003		31, 2004		31, 2003		31, 2004
Purchases of Property of Equipment	$	825	$	649	$	5,482	$	4,370
Software and Database Development Costs		400		693		1,143		2,587
Capital Expenditures	$	1,225	$	1,342	$	6,625	$	6,957

The following provides a reconciliation of Cash Flow from Operations to Free Cash Flow:

	FOR THE QUARTER						FOR THE TWELVE
	ENDED						MONTHS ENDED
	December			December			December			December
	31, 2003			31, 2004			31, 2003			31, 2004
Cash Flow from Operations	$	19,020		$	27,165		$	56,564		$	72,956
Less:
Capital Expenditures		(1,225	)		(1,342	)		(6,625	)		(6,957	)
Free Cash Flow	$	17,795		$	25,823		$	49,939		$	65,999

infoUSA INC. AND SUBSIDIARIES
Selected Balance Sheet Amounts
(In thousands, except per share amounts)

The following table presents selected balance sheet account information as of December 31, 2004, compared to December 31, 2003.

	December 31,		December 31,
(amounts in thousands)	2003		2004
Assets
Cash and Cash Equivalents	$	2,686	$	10,404
Accounts Receivable		40,922		51,707
Accounts Receivable-List Brokerage		12,844		19,635
Deferred Marketing Costs		5,457		2,632
Property and Equipment, net		40,984		42,537
Intangible Assets, net		247,609		365,286
Liabilities
Accounts Payable		16,212		21,268
Accounts Payable-List Brokerage		9,516		15,427
Accrued Payroll Expenses		17,793		15,917
Accrued Expenses		824		7,028
Deferred Revenue		19,824		53,034
Total Debt		139,765		196,226