EX-99.1 2 d69858exv99w1.htm EX-99.1 exv99w1
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
November 2, 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 Third Quarter Results
  •   infoGROUP reports revenue of $125.0 million
 
  •   Revenue growth of $3.4 million from second quarter 2009
 
  •   Net income of $4.8 million
 
  •   GAAP earnings per share of $0.08 and non-GAAP adjusted earnings per share of $0.18
 
  •   Continued reduction of debt by $6.3 million to $187.1 million
(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 third quarter of 2009 ended on September 30, 2009.
“We are pleased to report sequential revenue growth in the third quarter compared to our second quarter,” said Bill Fairfield, infoGROUP’s Chief Executive Officer. “We have worked hard to generate profitable revenue growth during these tough economic times, reduce our debt quarter over quarter and reinvest in the business by building new products and services for the future. All these initiatives continue to help move the Company in the right direction.”
THIRD QUARTER RESULTS
GAAP Results
During the third quarter of 2009, infoGROUP delivered revenue of $125.0 million, compared to $145.0 million for the same period in 2008, representing a decline of $20.0 million or 14%. Excluding the effect

 

 

of foreign exchange, the decline was $18.1 million or 12%. The revenue of $125.0 million exceeded the second quarter of 2009 by $3.4 million or an increase of 3%.
infoGROUP’s operating income for the third quarter of 2009 was $9.4 million, which included $9.3 million of restructuring, non-recurring and non-cash charges, compared to an operating loss of $12.4 million in the third quarter of 2008, which included $27.6 million of similar charges.
infoGROUP’s net income for the third quarter of 2009 was $4.8 million, or earnings per share of $0.08, compared to a net loss of $8.6 million, or a loss per share of $0.15 in 2008.
Non-GAAP Results
infoGROUP’s adjusted earnings per share for the third quarter of 2009, excluding the restructuring, non-recurring and non-cash charges, was $0.18, compared to $0.15 for the third quarter of 2008, an increase of $0.03.
In the third quarter of 2009, EBITDA was $16.9 million compared to a loss of $3.3 million in 2008. Adjusted EBITDA, which excludes certain restructuring, non-recurring and non-cash charges, was $26.2 million in 2009, compared to $24.3 million in 2008. As a result of the cost cutting initiatives that were started last year and continued through the third quarter, we were able to offset the revenue decline experienced in the quarter.
In total, the Company recorded $9.3 million in costs during the quarter for restructuring, non-recurring and non-cash charges. This included $2.0 million in legal and professional fees related to the SEC investigation, $4.0 million in restructuring costs for severance associated with headcount reductions and facility closures, $2.9 million for impairments and write-down of assets and $0.4 million in non-cash stock compensation expense. All of the charges, excluding a non-recurring gain of $0.2 million recorded in other income, were recorded in selling, general and administrative expenses within operating expenses.
“Year to date cost savings initiatives during 2009 are now estimated to have an annualized impact of approximately $35 million,” said Tom Oberdorf, infoGROUP’s Chief Financial Officer. “We will have new initiatives in the fourth quarter, which will further compound our savings.”
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 third quarter conference call on November 3, 2009 at 8:30 a.m. Eastern time. To access the conference call, please dial 877-397-0286 (international 719-325-4870), passcode 9803743, 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 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.

 

 

infoGROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
                                 
    THREE MONTHS ENDED     NINE MONTHS ENDED  
    September 30,     September 30,  
    2009     2008     2009     2008  
    (UNAUDITED)     (UNAUDITED)  
 
                                
Net sales
   $ 124,985     $ 144,996     $ 374,092     $ 446,777  
Costs and expenses:
                                
Cost of goods and services
     45,556       51,623       138,453       154,912  
Selling, general and administrative
     63,065       97,328       200,174       259,294  
Depreciation and amortization of operating assets
     4,653       5,249       14,412       15,765  
Amortization of intangible assets
     2,285       3,201       8,058       9,712  
 
                        
Total operating costs and expenses
     115,559       157,401       361,097       439,683  
 
                        
Operating income (loss)
     9,426       (12,405 )     12,995       7,094  
Investment income
     189       316       188       1,671  
Other income (expense)
     337       300       (987 )     461  
Interest expense
     (2,111 )     (4,251 )     (7,517 )     (13,347 )
 
                        
Other expense, net
     (1,585 )     (3,635 )     (8,316 )     (11,215 )
 
                        
Income (loss) before income taxes
     7,841       (16,040 )     4,679       (4,121 )
Income tax expense (benefit)
     2,995       (5,898 )     1,825       (1,423 )
 
                        
Net income (loss) from continuing operations
     4,846       (10,142 )     2,854       (2,698 )
Income (loss) from discontinued operations, net of tax
     (46 )     1,571       (7,188 )     5,065  
 
                        
Net income (loss)
   $ 4,800     $ (8,571 )   $ (4,334 )   $ 2,367  
 
                        
 
                                
BASIC EARNINGS (LOSS) PER SHARE:
                                
Income (loss) from continuing operations
   $ 0.08     $ (0.18 )   $ 0.05     $ (0.05 )
Income (loss) from discontinued operations
   $ (0.00 )   $ 0.03     $ (0.13 )   $ 0.09  
 
                        
Net income (loss)
   $ 0.08     $ (0.15 )   $ (0.08 )   $ 0.04  
 
                        
Basic weighted average shares outstanding
     57,808       57,054       57,294       56,698  
 
                        
 
                                
DILUTED EARNINGS (LOSS) PER SHARE:
                                
Income (loss) from continuing operations
   $ 0.08     $ (0.18 )   $ 0.05     $ (0.05 )
Income (loss) from discontinued operations
   $ (0.00 )   $ 0.03     $ (0.12 )   $ 0.09  
 
                        
Net income (loss)
   $ 0.08     $ (0.15 )   $ (0.07 )   $ 0.04  
 
                        
Diluted weighted average shares outstanding
     58,369       57,054       57,870       56,700  
 
                        

 

The following provides a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP adjusted EBITDA:
                                 
    THREE MONTHS ENDED     NINE MONTHS ENDED  
(in thousands)   September 30,     September 30,  
    2009     2008     2009     2008  
    (UNAUDITED)     (UNAUDITED)  
 
GAAP net income (loss)
   $ 4,800     $ (8,571 )   $ (4,334 )   $ 2,367  
(Income) loss from discontinued operations, net of tax
     46       (1,571 )     7,188       (5,065 )
Interest expense
     2,111       4,251       7,517       13,347  
Income tax expense (benefit)
     2,995       (5,898 )     1,825       (1,423 )
Depreciation and amortization of operating assets
     4,653       5,249       14,412       15,765  
Amortization of intangible assets
     2,285       3,201       8,058       9,712  
 
                        
Non-GAAP EBITDA
   $ 16,890     $ (3,339 )   $ 34,666     $ 34,703  
 
                        
Adjustments:
                                
SEC investigation / shareholder litigation expenses
   $ 2,005     $ 14,272     $ 7,706     $ 23,936  
Restructuring costs
     4,042       12,554       13,226       15,500  
Impairments and write-down of assets
     2,896       666       8,641       666  
Litigation settlement charges
     16       11       388       63  
Non-cash stock compensation expense
     375       108       1,197       373  
 
                        
Non-GAAP adjusted EBITDA
   $ 26,224     $ 24,272     $ 65,824     $ 75,241  
 
                        
The following provides a reconciliation of GAAP basic earnings (loss) per share to non-GAAP adjusted basic earnings per share:
                                 
    THREE MONTHS ENDED     NINE MONTHS ENDED  
(in thousands, except per share amounts)   September 30,     September 30,  
    2009     2008     2009     2008  
    (UNAUDITED)     (UNAUDITED)  
 
                                
GAAP basic earnings (loss) per share from continuing operations
   $ 0.08     $ (0.18 )   $ 0.05     $ (0.05 )
Effect of adjustments (see below)
   $ 0.10     $ 0.30     $ 0.33     $ 0.44  
 
                        
Non-GAAP adjusted basic earnings per share from continuing operations
   $ 0.18     $ 0.12     $ 0.38     $ 0.39  
 
                        
 
                                
GAAP basic earnings (loss) per share
   $ 0.08     $ (0.15 )   $ (0.08 )   $ 0.04  
Effect of adjustments (see below)
   $ 0.10     $ 0.30     $ 0.33     $ 0.44  
 
                        
Non-GAAP adjusted basic earnings per share
   $ 0.18     $ 0.15     $ 0.25     $ 0.48  
 
                        
 
                                
Adjustments (detail in above table)
   $ 9,334     $ 27,611     $ 31,158     $ 40,538  
Income tax effect of adjustments
     3,640       10,492       12,151       15,404  
 
                        
Impact of adjustments on net income
   $ 5,694     $ 17,119     $ 19,007     $ 25,134  
 
                        
Basic weighted average shares outstanding
     57,808       57,054       57,294       56,698  
 
                        
Effect of adjustments on basic earnings (loss) per share from continuing operations and basic earnings (loss) per share
   $ 0.10     $ 0.30     $ 0.33     $ 0.44  
 
                        

 

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  
    September 30,  
(in thousands)   2009     2008  
    (UNAUDITED)  
 
                
GAAP selling, general and administrative expenses
   $ 63,065     $ 97,328  
Less restructuring, non-recurring and non-cash charges
     9,523       27,611  
 
            
non-GAAP selling, general and administrative expenses, excluding restructuring, non-recurring and non-cash charges
   $ 53,542     $ 69,717  
 
            
The following provides a reconciliation of GAAP operating income (loss) to non-GAAP operating income, excluding restructuring, non-recurring and non-cash charges:
                 
    THREE MONTHS ENDED  
    September 30,  
(in thousands)   2009     2008  
    (UNAUDITED)  
 
                
GAAP operating income (loss)
   $ 9,426     $ (12,405 )
Plus restructuring, non-recurring and non-cash charges
     9,523       27,611  
 
            
non-GAAP operating income, excluding restructuring, non-recurring and non-cash charges
   $ 18,949     $ 15,206  
 
            

 

infoGROUP INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
                 
    September 30,     December 31,  
    2009     2008  
    (UNAUDITED)          
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 7,274     $ 4,691  
Marketable securities
     1,505       992  
Trade accounts receivable
     40,474       56,030  
List brokerage trade accounts receivable
     76,691       86,841  
Unbilled services
     13,143       11,120  
Deferred income taxes
     4,901       6,889  
Income taxes receivable
     —       3,782  
Prepaid expenses
     9,685       9,382  
Deferred marketing costs
     959       1,004  
Assets held for sale
     1,594       3,960  
Current assets of discontinued operations
     —       36,845  
 
            
Total current assets
     156,226       221,536  
 
            
Property and equipment, net
     50,985       59,235  
Goodwill
     353,794       377,708  
Intangible assets, net
     61,077       69,950  
Other assets
     2,711       2,505  
Escrow, noncurrent
     10,020       —  
Noncurrent assets of discontinued operations
     —       84,844  
 
            
 
   $ 634,813     $ 815,778  
 
            
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Current portion of long-term debt
   $ 2,815     $ 2,899  
Accounts payable
     11,927       29,569  
List brokerage trade accounts payable
     63,076       79,827  
Accrued payroll expenses
     34,266       32,128  
Accrued expenses
     16,283       16,068  
Income taxes payable
     5,873       —  
Deferred revenue
     48,941       60,479  
Current liabilities of discontinued operations
     —       16,659  
 
            
Total current liabilities
     183,181       237,629  
 
            
Long-term debt, net of current portion
     184,299       297,745  
Deferred income taxes
     4,810       10,552  
Other liabilities
     11,287       5,417  
Noncurrent liabilities of discontinued operations
     —       16,406  
Stockholders’ equity:
                
Common stock
     144       142  
Paid-in capital
     150,292       147,029  
Retained earnings
     109,748       114,082  
Note receivable — shareholder
     (6,800 )     (9,000 )
Accumulated other comprehensive loss
     (2,148 )     (4,224 )
 
            
Total stockholders’ equity
     251,236       248,029  
 
            
 
   $ 634,813     $ 815,778