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 December 31,								FOR THE YEARS ENDED 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 administrative			63,448				74,239				263,622				333,533
Depreciation and amortization of operating assets			5,768				5,587				20,180				21,352
Amortization of intangible assets			2,315				3,152				10,373				12,864
Total operating costs and expenses			118,317				132,047				479,414				571,730
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 taxes			5,575				3,099				10,254				(1,022	)
Income tax expense			6,983				1,835				8,808				412
Net income (loss) from continuing operations			(1,408	)			1,264				1,446				(1,434	)
Income (loss) from discontinued operations, net of tax			(1,031	)			1,180				(8,219	)			6,245
Net income (loss)		$	(2,439	)		$	2,444			$	(6,773	)		$	4,811
BASIC EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations		$	(0.02	)		$	0.02			$	0.02			$	(0.03	)
Income (loss) from discontinued operations		$	(0.02	)		$	0.02			$	(0.14	)		$	0.11
Net income (loss)		$	(0.04	)		$	0.04			$	(0.12	)		$	0.08
Basic weighted average shares outstanding			57,550				56,944				57,359				56,760
DILUTED EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations		$	(0.02	)		$	0.02			$	0.02			$	(0.03	)
Income (loss) from discontinued operations		$	(0.02	)		$	0.02			$	(0.14	)		$	0.11
Net income (loss)		$	(0.04	)		$	0.04			$	(0.12	)		$	0.08
Diluted weighted average shares outstanding			57,550				56,998				57,923				56,760

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

(in thousands)		THREE MONTHS ENDED December 31,								FOR THE YEARS ENDED 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 of tax			1,031				(1,180	)			8,219				(6,245	)
Interest expense			1,936				4,794				9,453				18,141
Income tax expense			6,983				1,835				8,808				412
Depreciation and amortization of operating assets			5,768				5,587				20,180				21,352
Amortization of intangible assets			2,315				3,152				10,373				12,864
Non-GAAP EBITDA		$	15,594			$	16,632			$	50,260			$	51,335
Adjustments:
SEC investigation / shareholder litigation expenses		$	759			$	(341	)		$	8,465			$	23,595
Restructuring costs			877				2,985				14,103				18,485
Impairments and write-down of assets			8,306				10,602				16,947				11,268
Litigation settlement charges			28				498				416				561
Non-cash stock compensation expense			437				127				1,634				500
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 share amounts)		THREE MONTHS ENDED December 31,								FOR THE YEARS ENDED December 31,
		2009				2008				2009				2008
		(UNAUDITED)								(UNAUDITED)
GAAP basic earnings (loss) per share from continuing operations		$	(0.02	)		$	0.02			$	0.02			$	(0.03	)
Effect of adjustments (see below)		$	0.16			$	0.15			$	0.49			$	0.59
Non-GAAP adjusted basic earnings per share from continuing operations		$	0.14			$	0.17			$	0.51			$	0.56
GAAP basic earnings (loss) per share		$	(0.04	)		$	0.04			$	(0.12	)		$	0.08
Effect of adjustments (see below)		$	0.16			$	0.15			$	0.49			$	0.59
Non-GAAP adjusted basic earnings per share		$	0.12			$	0.19			$	0.37			$	0.67
Adjustments (detail in above table)		$	10,407			$	13,871			$	41,565			$	54,409
Income tax effect of adjustments			1,054				5,271				13,283				20,675
Impact of adjustments on net income		$	9,353			$	8,600			$	28,282			$	33,734
Basic weighted average shares outstanding			57,550				56,944				57,359				56,760
Effect of adjustments on basic earnings (loss) per share from continuing operations and basic earnings per share		$	0.16			$	0.15			$	0.49			$	0.59

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:

(in thousands)		THREE MONTHS ENDED December 31,						FOR THE YEARS ENDED December 31,
		2009			2008			2009			2008
		(UNAUDITED)						(UNAUDITED)
GAAP selling, general and administrative expenses		$	63,448		$	74,239		$	263,622		$	333,533
Less restructuring, non-recurring and non-cash charges			10,307			11,428			41,046			51,966
non-GAAP selling, general and administrative expenses, excluding restructuring, non-recurring and non-cash charges		$	53,141		$	62,811		$	222,576		$	281,567
The following provides a reconciliation of GAAP operating income to non-GAAP operating income, excluding restructuring, non-recurring and non-cash charges:
(in thousands)		THREE MONTHS ENDED December 31,						FOR THE YEARS ENDED December 31,
		2009			2008			2009			2008
		(UNAUDITED)						(UNAUDITED)
GAAP operating income		$	7,504		$	9,862		$	20,499		$	16,956
Plus restructuring, non-recurring and non-cash charges			10,307			11,428			41,046			51,966
non-GAAP operating income, excluding restructuring, non-recurring and non-cash charges		$	17,811		$	21,290		$	61,545		$	68,922

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