Infogroup Reports Fourth Quarter and Fiscal Year 2009 Results

OMAHA, Neb.--(BUSINESS WIRE)-- 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 fourth quarter and the fiscal year ended December 31, 2009.

"While 2009 was a challenging year, we continue to see improvements in our core operations," said Bill Fairfield, Infogroup's Chief Executive Officer. "We had sequential quarterly revenue growth for the second quarter in a row, and we continue to generate positive cash flow."

FOURTH QUARTER RESULTS

GAAP Results

During the fourth quarter of 2009, Infogroup recorded revenue of $125.8 million, compared to $141.9 million for the same period in 2008, representing a decline of $16.1 million or 11%.

Infogroup's operating income for the fourth quarter of 2009 was $7.5 million, which included $10.3 million of restructuring, non-recurring and non-cash charges, compared to operating income of $9.9 million in the fourth quarter of 2008, which included $11.4 million of comparable charges.

Infogroup's net loss from continuing operations for the fourth quarter of 2009 was $1.4 million, or a loss per share from continuing operations of $0.02, compared to net income from continuing operations of $1.3 million, or earnings per share from continuing operations of $0.02 in 2008.

Non-GAAP Results

Infogroup's adjusted earnings per share from continuing operations for the fourth quarter of 2009, excluding the restructuring, non-recurring and non-cash charges, was $0.14, compared to $0.17 for the fourth quarter of 2008, a decrease of $0.03.

In the fourth quarter of 2009, EBITDA was $15.6 million compared to $16.6 million in 2008. Adjusted EBITDA, which excludes certain restructuring, non-recurring and non-cash charges, was $26.0 million in 2009, compared to $30.5 million in 2008.

In total, the Company recorded $10.4 million in costs during the quarter for restructuring, non-recurring and non-cash charges. This included $7.7 million for an impairment of goodwill, $0.6 million for additional impairments and write-down of assets, $0.8 million in legal and professional fees related to the SEC investigation, $0.9 million in restructuring costs for severance associated with headcount reductions and facility closures and $0.4 million in non-cash stock compensation expense. All of the charges, excluding a write-down of a non-marketable security of $0.1 million recorded in other income, were recorded in selling, general and administrative expenses within operating expenses.

FISCAL YEAR RESULTS

GAAP Results

Revenue for the fiscal year 2009 was $499.9 million, compared to $588.7 million for fiscal year 2008, representing a decline of $88.8 million or 15%. Excluding the effect of foreign exchange, the decline was $79.4 million or 13%.

Infogroup's operating income for the fiscal year 2009 was $20.5 million, which included $41.0 million of restructuring, non-recurring and non-cash charges, compared to operating income of $17.0 million for fiscal year 2008, which included $52.0 million of comparable charges.

Infogroup's net income from continuing operations for the fiscal year 2009 was $1.4 million, or earnings per share from continuing operations of $0.02, compared to a net loss from continuing operations of $1.4 million, or a loss per share from continuing operations of $0.03 in 2008.

Non-GAAP Results

Infogroup's adjusted earnings per share from continuing operations for the fiscal year 2009, excluding the restructuring, non-recurring and non-cash charges, was $0.51, compared to $0.56 for fiscal year 2008, a decrease of $0.05.

EBITDA for the fiscal year 2009 was $50.3 million compared to $51.3 million in 2008. Adjusted EBITDA, which excludes certain restructuring, non-recurring and non-cash charges, was $91.8 million in 2009, compared to $105.7 million in 2008.

The Company recorded $41.6 million during fiscal year 2009 for restructuring, non-recurring and non-cash charges compared to $54.4 million in 2008, representing a decline of $12.8 million. The 2009 charges included $8.5 million in legal and professional fees related to the SEC investigation, $14.1 million in restructuring costs for severance associated with headcount reductions and facility closures, $7.7 million for an impairment of goodwill, $9.2 million for other impairments and write-down of assets, $1.6 million in non-cash stock compensation expense and $0.4 million for litigation settlement charges. All of the charges, excluding a net write-down of marketable and non-marketable securities of $0.5 million recorded in other income, were recorded in selling, general and administrative expenses within operating expenses.

"Cost savings initiatives during 2009 had an actual impact of $26.6 million, and will have an annualized impact of approximately $38 million," said Tom Oberdorf, Infogroup's Chief Financial Officer. "Cost reductions and building efficiencies within the organization have become a way of life at Infogroup, and we expect to have additional cost savings in 2010."

Fairfield added, "With the foundation we laid in 2009, we are now beginning the next phase of our transformation in which we will continue to rationalize the business around customer segments. This will strengthen our "go to market" strategies both from a customer service and product innovation effort and help to drive organic growth." Fairfield concluded, "We are pleased with our progress that we experienced over the last several quarters and look forward to 2010."

NON-GAAP INFORMATION

In addition to presenting results determined in accordance with generally accepted accounting principles, or GAAP, this release also presents non-GAAP financial measures. Investors are referred to the tables included in this press release for a reconciliation of these non-GAAP measures to GAAP financial measures.

Management considers GAAP and non-GAAP financial measures in evaluating the operating performance of the Company. EBITDA is commonly used as an analytical indicator within Infogroup's industry. Adjusted EBITDA, adjusted earnings per share, non-GAAP selling, general and administrative expenses and non-GAAP operating income exclude items that management believes result from events that are not recurring and are not part of on-going operations. Management believes these non-GAAP financial measures also provide useful supplemental information to investors in evaluating the aggregate performance of the Company's operating businesses.

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. You should not consider non-GAAP financial measures in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

CONFERENCE CALL

The Company will host its fourth quarter conference call on February 9, 2010 at 8:30 a.m. Eastern time. To access the conference call, please dial 877-719-9789 (international 719-325-4751), passcode 5496627, approximately 10 minutes prior to the start of the call. Those interested can also listen to an audio webcast of the call live on the Investor Relations section of the Company's web site at www.Infogroup.com. A replay of the call will be available after the call at the same link.

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's headquarters are located at 5711 South 86^th 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.


Infogroup INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

                              THREE MONTHS ENDED        FOR THE YEARS ENDED

                              December 31,              December 31,

                              2009         2008         2009         2008

                              (UNAUDITED)               (UNAUDITED)

Net sales                     $ 125,821    $ 141,909    $ 499,913    $ 588,686

Costs and expenses:

Cost of goods and services      46,786       49,069       185,239      203,981

Selling, general and            63,448       74,239       263,622      333,533
administrative

Depreciation and
amortization of operating       5,768        5,587        20,180       21,352
assets

Amortization of intangible      2,315        3,152        10,373       12,864
assets

Total operating costs and       118,317      132,047      479,414      571,730
expenses

Operating income                7,504        9,862        20,499       16,956

Investment income (expense)     41           (11     )    229          1,660

Other income (expense)          (34     )    (1,958  )    (1,021  )    (1,497  )

Interest expense                (1,936  )    (4,794  )    (9,453  )    (18,141 )

Other expense, net              (1,929  )    (6,763  )    (10,245 )    (17,978 )

Income (loss) before income     5,575        3,099        10,254       (1,022  )
taxes

Income tax expense              6,983        1,835        8,808        412

Net income (loss) from          (1,408  )    1,264        1,446        (1,434  )
continuing operations

Income (loss) from
discontinued operations, net    (1,031  )    1,180        (8,219  )    6,245
of tax

Net income (loss)             $ (2,439  )  $ 2,444      $ (6,773  )  $ 4,811

BASIC EARNINGS (LOSS) PER
SHARE:

Income (loss) from            $ (0.02   )  $ 0.02       $ 0.02       $ (0.03   )
continuing operations

Income (loss) from            $ (0.02   )  $ 0.02       $ (0.14   )  $ 0.11
discontinued operations

Net income (loss)             $ (0.04   )  $ 0.04       $ (0.12   )  $ 0.08

Basic weighted average          57,550       56,944       57,359       56,760
shares outstanding

DILUTED EARNINGS (LOSS) PER SHARE:

Income (loss) from            $ (0.02   )  $ 0.02       $ 0.02       $ (0.03   )
continuing operations

Income (loss) from            $ (0.02   )  $ 0.02       $ (0.14   )  $ 0.11
discontinued operations

Net income (loss)             $ (0.04   )  $ 0.04       $ (0.12   )  $ 0.08

Diluted weighted average        57,550       56,998       57,923       56,760
shares outstanding

The following provides a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP adjusted EBITDA:


                                THREE MONTHS ENDED      FOR THE YEARS ENDED
(in thousands)
                                December 31,            December 31,

                                2009        2008        2009         2008

                                (UNAUDITED)             (UNAUDITED)

GAAP net income (loss)          $ (2,439 )  $ 2,444     $ (6,773 )   $ 4,811

(Income) loss from
discontinued operations, net      1,031       (1,180 )    8,219        (6,245  )
of tax

Interest expense                  1,936       4,794       9,453        18,141

Income tax expense                6,983       1,835       8,808        412

Depreciation and amortization     5,768       5,587       20,180       21,352
of operating assets

Amortization of intangible        2,315       3,152       10,373       12,864
assets

Non-GAAP EBITDA                 $ 15,594    $ 16,632    $ 50,260     $ 51,335

Adjustments:

SEC investigation /
shareholder litigation          $ 759       $ (341   )  $ 8,465      $ 23,595
expenses

Restructuring costs               877         2,985       14,103       18,485

Impairments and write-down of     8,306       10,602      16,947       11,268
assets

Litigation settlement charges     28          498         416          561

Non-cash stock compensation       437         127         1,634        500
expense

Non-GAAP adjusted EBITDA        $ 26,001    $ 30,503    $ 91,825     $ 105,744

The following provides a reconciliation of GAAP basic earnings (loss) per share
to non-GAAP adjusted basic earnings per share:

(in thousands, except per       THREE MONTHS ENDED      FOR THE YEARS ENDED
share amounts)
                                December 31,            December 31,

                                2009        2008        2009         2008

                                (UNAUDITED)             (UNAUDITED)

GAAP basic earnings (loss) per
share from continuing           $ (0.02  )  $ 0.02      $ 0.02       $ (0.03   )
operations

Effect of adjustments (see      $ 0.16      $ 0.15      $ 0.49       $ 0.59
below)

Non-GAAP adjusted basic
earnings per share from         $ 0.14      $ 0.17      $ 0.51       $ 0.56
continuing operations

GAAP basic earnings (loss) per  $ (0.04  )  $ 0.04      $ (0.12  )   $ 0.08
share

Effect of adjustments (see      $ 0.16      $ 0.15      $ 0.49       $ 0.59
below)

Non-GAAP adjusted basic         $ 0.12      $ 0.19      $ 0.37       $ 0.67
earnings per share

Adjustments (detail in above    $ 10,407    $ 13,871    $ 41,565     $ 54,409
table)

Income tax effect of              1,054       5,271       13,283       20,675
adjustments

Impact of adjustments on net    $ 9,353     $ 8,600     $ 28,282     $ 33,734
income

Basic weighted average shares     57,550      56,944      57,359       56,760
outstanding

Effect of adjustments on basic
earnings (loss) per share from  $ 0.16      $ 0.15      $ 0.49       $ 0.59
continuing operations and
basic earnings per share

The following provides a reconciliation of GAAP selling, general and administrative expenses to non-GAAP selling, general and administrative expenses, excluding restructuring, non-recurring and non-cash charges:


                                      THREE MONTHS ENDED  FOR THE YEARS ENDED
(in thousands)
                                      December 31,        December 31,

                                      2009      2008      2009         2008

                                      (UNAUDITED)         (UNAUDITED)

GAAP selling, general and             $ 63,448  $ 74,239  $ 263,622    $ 333,533
administrative expenses

Less restructuring, non-recurring       10,307    11,428    41,046       51,966
and non-cash charges

non-GAAP selling, general and
administrative expenses, excluding    $ 53,141  $ 62,811  $ 222,576    $ 281,567
restructuring, non-recurring and
non-cash charges

The following provides a reconciliation of GAAP operating income to non-GAAP
operating income, excluding restructuring, non-recurring and non-cash charges:

                                      THREE MONTHS ENDED  FOR THE YEARS ENDED
(in thousands)
                                      December 31,        December 31,

                                      2009      2008      2009         2008

                                      (UNAUDITED)         (UNAUDITED)

GAAP operating income                 $ 7,504   $ 9,862   $ 20,499     $ 16,956

Plus restructuring, non-recurring       10,307    11,428    41,046       51,966
and non-cash charges

non-GAAP operating income, excluding
restructuring, non-recurring and      $ 17,811  $ 21,290  $ 61,545     $ 68,922
non-cash charges


Infogroup INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

                                                   December 31,  December 31,

                                                   2009          2008

                                                   (UNAUDITED)

ASSETS

Current assets:

Cash and cash equivalents                          $ 5,784       $ 4,691

Marketable securities                                1,773         992

Trade accounts receivable                            61,947        56,030

List brokerage trade accounts receivable             81,033        86,841

Unbilled services                                    8,487         11,120

Deferred income taxes                                1,184         6,889

Income taxes receivable                              -             3,782

Prepaid expenses                                     8,702         9,382

Deferred marketing costs                             742           1,004

Assets held for sale                                 1,457         3,960

Current assets of discontinued operations            -             36,845

Total current assets                                 171,109       221,536

Property and equipment, net                          50,285        59,235

Goodwill                                             346,265       377,708

Intangible assets, net                               61,828        69,950

Other assets                                         3,736         2,505

Escrow, noncurrent                                   10,029        -

Noncurrent assets of discontinued operations         -             84,844

                                                   $ 643,252     $ 815,778

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt                  $ 2,692       $ 2,899

Accounts payable                                     18,395        29,569

List brokerage trade accounts payable                65,936        79,827

Accrued payroll expenses                             32,231        32,128

Accrued expenses                                     11,370        16,068

Income taxes payable                                 3,613         -

Deferred revenue                                     62,582        60,479

Current liabilities of discontinued operations       -             16,659

Total current liabilities                            196,819       237,629

Long-term debt, net of current portion               179,010       297,745

Deferred income taxes                                5,774         10,552

Other liabilities                                    11,034        5,417

Noncurrent liabilities of discontinued operations    -             16,406

Stockholders' equity:

Common stock                                         144           142

Paid-in capital                                      151,529       147,029

Retained earnings                                    107,309       114,082

Note receivable - shareholder                        (6,800  )     (9,000  )

Accumulated other comprehensive loss                 (1,567  )     (4,224  )

Total stockholders' equity                           250,615       248,029

                                                   $ 643,252     $ 815,778


    Source: Infogroup