##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2009
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to .
 Commission File Number: 001-34298
 infoGROUP Inc.
 (Exact name of registrant specified in its charter)
 DELAWARE
    
    47-0751545(State or other jurisdiction of
    
    (I.R.S. Employer Identificationincorporation or organization)
    
    Number)5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA
    
    68127(Address of principal executive offices)
    
    (Zip Code)
  
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



info GROUP Inc.
 INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    30PART II  OTHER INFORMATION
    
    
    31Item 1. Legal Proceedings
    
    
    31Item 6. Exhibits
    
    
    33Signature
    
    
    34Index to Exhibits
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



info GROUP INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share amounts)
 June 30,
    
    
    December 31,2009
    
    
    2008(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,603
    
    
    $
    4,691Marketable securities
    
    
    611
    
    
    
    992Trade accounts receivable, net of allowances of $1,751 and $2,177, respectively
    
    
    42,304
    
    
    
    56,030List brokerage trade accounts receivable, net of allowances of $483 and $494, respectively
    
    
    66,540
    
    
    
    86,841Unbilled services
    
    
    10,669
    
    
    
    11,120Deferred income taxes
    
    
    5,196
    
    
    
    6,889Income taxes receivable
    
    
    
    
    
    
    3,782Prepaid expenses
    
    
    11,207
    
    
    
    9,382Escrow, current
    
    
    3,002
    
    
    
    Other receivables
    
    
    2,610
    
    
    
    Deferred marketing costs
    
    
    1,004
    
    
    
    1,004Assets held for sale
    
    
    2,815
    
    
    
    3,960Current assets of discontinued operations
    
    
    
    
    
    
    36,845Total current assets
    
    
    153,561
    
    
    
    221,536Property and equipment, net
    
    
    54,270
    
    
    
    59,235Goodwill
    
    
    353,088
    
    
    
    377,708Intangible assets, net
    
    
    64,274
    
    
    
    69,950Other assets
    
    
    2,445
    
    
    
    2,505Escrow, noncurrent
    
    
    10,005
    
    
    
    Noncurrent assets of discontinued operations
    
    
    
    
    
    
    84,844$
    637,643
    
    
    $
    815,778LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    2,837
    
    
    $
    2,899Accounts payable
    
    
    19,084
    
    
    
    29,569List brokerage trade accounts payable
    
    
    59,420
    
    
    
    79,827Accrued payroll expenses
    
    
    28,751
    
    
    
    32,128Accrued expenses
    
    
    16,600
    
    
    
    16,068Income taxes payable
    
    
    4,502
    
    
    
    Deferred revenue
    
    
    56,904
    
    
    
    60,479Current liabilities of discontinued operations
    
    
    
    
    
    
    16,659Total current liabilities
    
    
    188,098
    
    
    
    237,629Long-term debt, net of current portion
    
    
    190,618
    
    
    
    297,745Deferred income taxes
    
    
    7,561
    
    
    
    10,552Other liabilities
    
    
    7,218
    
    
    
    5,417Noncurrent liabilities of discontinued operations
    
    
    
    
    
    
    16,406Stockholders equity:Common stock, $.0025 par value. Authorized 295,000,000 shares; 57,386,849 shares
issued and outstanding at June 30, 2009 and 57,019,030 shares issued and
outstanding at December 31, 2008
    
    
    143
    
    
    
    142Paid-in capital
    
    
    149,281
    
    
    
    147,029Retained earnings
    
    
    104,948
    
    
    
    114,082Note receivable  shareholder
    
    
    (6,800
    )
    
    
    (9,000
    )Accumulated other comprehensive loss
    
    
    (3,424
    )
    
    
    (4,224
    )Total stockholders equity
    
    
    244,148
    
    
    
    248,029$
    637,643
    
    
    $
    815,778
  3




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##### Table of Contents



info GROUP INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDEDJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(UNAUDITED)
    
    
    (UNAUDITED)Net sales
    
    $
    121,570
    
    
    $
    148,489
    
    
    $
    249,107
    
    
    $
    301,781Costs and expenses:Cost of goods and services
    
    
    45,908
    
    
    
    52,099
    
    
    
    92,897
    
    
    
    103,289Selling, general and administrative
    
    
    66,973
    
    
    
    79,706
    
    
    
    137,109
    
    
    
    161,966Depreciation and amortization of operating assets
    
    
    5,000
    
    
    
    5,308
    
    
    
    9,759
    
    
    
    10,516Amortization of intangible assets
    
    
    2,839
    
    
    
    3,306
    
    
    
    5,773
    
    
    
    6,511Total operating costs and expenses
    
    
    120,720
    
    
    
    140,419
    
    
    
    245,538
    
    
    
    282,282Operating income (loss)
    
    
    850
    
    
    
    8,070
    
    
    
    3,569
    
    
    
    19,499Investment income (expense)
    
    
    1
    
    
    
    (4
    )
    
    
    (1
    )
    
    
    1,355Other income (expense)
    
    
    (699
    )
    
    
    (44
    )
    
    
    (1,324
    )
    
    
    161Interest expense
    
    
    (2,160
    )
    
    
    (3,709
    )
    
    
    (5,406
    )
    
    
    (9,096
    )Other expense, net
    
    
    (2,858
    )
    
    
    (3,757
    )
    
    
    (6,731
    )
    
    
    (7,580
    )Income (loss) before income taxes
    
    
    (2,008
    )
    
    
    4,313
    
    
    
    (3,162
    )
    
    
    11,919Income tax expense (benefit)
    
    
    (743
    )
    
    
    1,585
    
    
    
    (1,170
    )
    
    
    4,475Net income (loss) from continuing operations
    
    
    (1,265
    )
    
    
    2,728
    
    
    
    (1,992
    )
    
    
    7,444Income (loss) from discontinued operations, net of tax
    
    
    1,470
    
    
    
    1,609
    
    
    
    (7,142
    )
    
    
    3,494Net income (loss)
    
    $
    205
    
    
    $
    4,337
    
    
    $
    (9,134
    )
    
    $
    10,938Basic earnings (loss) per share:Income (loss) from continuing operations
    
    $
    (0.02
    )
    
    $
    0.05
    
    
    $
    (0.03
    )
    
    $
    0.13Income (loss) from discontinued operations
    
    $
    0.02
    
    
    $
    0.03
    
    
    $
    (0.13
    )
    
    $
    0.06Net income (loss)
    
    $
    
    
    
    $
    0.08
    
    
    $
    (0.16
    )
    
    $
    0.19Basic weighted average shares outstanding
    
    
    57,570
    
    
    
    56,798
    
    
    
    57,220
    
    
    
    56,632Diluted earnings (loss) per share:Income (loss) from continuing operations
    
    $
    (0.02
    )
    
    $
    0.05
    
    
    $
    (0.03
    )
    
    $
    0.13Income (loss) from discontinued operations
    
    $
    0.02
    
    
    $
    0.03
    
    
    $
    (0.13
    )
    
    $
    0.06Net income (loss)
    
    $
    
    
    
    $
    0.08
    
    
    $
    (0.16
    )
    
    $
    0.19Diluted weighted average shares outstanding
    
    
    57,570
    
    
    
    56,799
    
    
    
    57,220
    
    
    
    56,636
  4




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info GROUP INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 SIX MONTHS ENDEDJune 30,2009
    
    
    2008(UNAUDITED)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (9,134
    )
    
    $
    10,938Net income (loss) from discontinued operations
    
    
    (7,142
    )
    
    
    3,494Net income (loss) from continuing operations
    
    
    (1,992
    )
    
    
    7,444Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of operating assets
    
    
    9,759
    
    
    
    10,516Amortization of intangible assets
    
    
    5,773
    
    
    
    6,511Amortization of deferred financing fees
    
    
    702
    
    
    
    413Deferred income taxes
    
    
    (1,287
    )
    
    
    (5,164
    )Non-cash stock compensation expense
    
    
    823
    
    
    
    265Non-cash 401(k) contribution in common stock
    
    
    1,429
    
    
    
    1,509(Gain) loss on sale of assets and marketable securities
    
    
    399
    
    
    
    (1,471
    )Non-cash other expense (income)
    
    
    (18
    )
    
    
    80Asset impairment charges
    
    
    5,217
    
    
    
    Changes in assets and liabilities, net of effect of acquisitions:Trade accounts receivable and unbilled services
    
    
    15,705
    
    
    
    13,189List brokerage trade accounts receivable
    
    
    20,300
    
    
    
    25,380Prepaid expenses and other assets
    
    
    (17,247
    )
    
    
    (1,430
    )Deferred marketing costs
    
    
    
    
    
    
    20Accounts payable
    
    
    (10,620
    )
    
    
    7,764List brokerage trade accounts payable
    
    
    (20,409
    )
    
    
    (26,215
    )Income taxes receivable and payable, net
    
    
    8,192
    
    
    
    (2,102
    )Accrued expenses and other liabilities
    
    
    (1,600
    )
    
    
    (14,110
    )Deferred revenue
    
    
    (4,855
    )
    
    
    (4,455
    )Net cash provided by operating activities  continuing operations
    
    
    10,271
    
    
    
    18,144Net cash provided by (used in) operating activities  discontinued operations
    
    
    (23,061
    )
    
    
    1,909Net cash provided by (used in) operating activities
    
    
    (12,790
    )
    
    
    20,053CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of marketable securities
    
    
    9
    
    
    
    1,821Purchases of marketable securities
    
    
    
    
    
    
    (3,255
    )Proceeds from sale of property and equipment
    
    
    790
    
    
    
    62Purchases of property and equipment
    
    
    (3,195
    )
    
    
    (10,089
    )Acquisitions of businesses, net of cash acquired
    
    
    
    
    
    
    (18,229
    )Software development costs
    
    
    (4,917
    )
    
    
    (3,132
    )Net cash used in investing activities  continuing operations
    
    
    (7,313
    )
    
    
    (32,822
    )Net cash provided by (used in) investing activities  discontinued operations
    
    
    128,428
    
    
    
    (1,326
    )Net cash provided by (used in) investing activities
    
    
    121,115
    
    
    
    (34,148
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of long-term debt
    
    
    (160,189
    )
    
    
    (37,641
    )Proceeds from long-term debt
    
    
    53,000
    
    
    
    71,300Deferred financing costs paid
    
    
    (1,085
    )
    
    
    (1,283
    )Dividends paid
    
    
    
    
    
    
    (19,793
    )Proceeds from shareholder for settlement
    
    
    2,200
    
    
    
    Tax benefit related to employee stock options
    
    
    
    
    
    
    10Proceeds from exercise of stock options
    
    
    
    
    
    
    170Net cash provided by (used in) financing activities  continuing operations
    
    
    (106,074
    )
    
    
    12,763Net cash used in financing activities  discontinued operations
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (106,074
    )
    
    
    12,763Effect of exchange rate fluctuations on cash and cash equivalents
    
    
    661
    
    
    
    138Net increase (decrease) in cash and cash equivalents
    
    
    2,912
    
    
    
    (1,194
    )Cash and cash equivalents, beginning
    
    
    4,691
    
    
    
    9,924Cash and cash equivalents, ending
    
    $
    7,603
    
    
    $
    8,730Supplemental cash flow information:Interest paid
    
    $
    5,146
    
    
    $
    8,663Income taxes paid
    
    $
    42,592
    
    
    $
    14,543
  5




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##### Table of Contents



info GROUP INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  info
 1. GENERAL
 Basis of Presentation
 info
      Recent Accounting Pronouncements
 Subsequent
Events,
 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability has Significantly Decreased and Identifying Transactions That Are Not Orderly,
 6




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##### Table of Contents



Interim Disclosures about Fair Value of
Financial Instruments, Disclosures about Fair Value of
Financial Instruments
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R)
 Accounting for Transfers of Financial Assets  an
amendment of Statement No. 140
 2. EARNINGS (LOSS) PER SHARE INFORMATION
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(in thousands)
    
    (in thousands)2009
    
    2008
    
    2009
    2008Weighted
average number of
shares used in
basic earnings
(loss) per share
    
    
    57,570
    
    
    
    56,798
    
    
    
    57,220
    
    
    
    56,632Net additional
common stock
equivalent shares
outstanding after
assumed exercise of
stock options
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    4Weighted average
number of shares
outstanding used in
diluted earnings
(loss) per share
    
    
    57,570
    
    
    
    56,799
    
    
    
    57,220
    
    
    
    56,636
  3. DISCONTINUED OPERATIONS
 Macro Divestiture
   7




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)
    
    
    (in thousands)Net sales
    
    $
    
    
    
    $
    38,735
    
    
    $
    35,440
    
    
    $
    76,553Operating income from discontinued operations before income taxes
    
    
    (149
    )
    
    
    2,495
    
    
    
    1,860
    
    
    
    5,535Gain from disposal of business
    
    
    2,598
    
    
    
    
    
    
    
    27,838
    
    
    
    Income before income taxes
    
    
    2,449
    
    
    
    2,495
    
    
    
    29,698
    
    
    
    5,535Income tax expense
    
    
    (979
    )
    
    
    (886
    )
    
    
    (36,840
    )
    
    
    (2,041
    )Income (loss) from discontinued operations, net of tax
    
    $
    1,470
    
    
    $
    1,609
    
    
    $
    (7,142
    )
    
    $
    3,494
  8




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Assets and Liabilities of Discontinued Operations
  December 31,2008(In thousands)Cash and cash equivalents
    
    $
    127Trade accounts receivable and unbilled services
    
    
    34,891Prepaid expenses
    
    
    647Deferred income taxes
    
    
    1,005Other assets
    
    
    175Currents assets of discontinued operations
    
    $
    36,845Property and equipment, net
    
    
    5,873Goodwill and other intangibles
    
    
    78,971Noncurrent assets of discontinued operations
    
    $
    84,844Accounts payable
    
    
    3,857Accrued payroll expenses
    
    
    7,920Accrued expenses
    
    
    1,672Deferred revenue
    
    
    3,210Current liabilities of discontinued operations
    
    $
    16,659Deferred income taxes
    
    
    15,217Other liabilities
    
    
    1,189Noncurrent liabilities of discontinued operations
    
    $
    16,406
 4. ASSETS HELD FOR SALE
  5. SEGMENT INFORMATION
       9




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For the Three Months Ended June 30, 2009Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    62,100
    
    
    $
    34,769
    
    
    $
    24,701
    
    
    $
    
    
    
    $
    121,570Operating income (loss)
    
    
    7,030
    
    
    
    5,278
    
    
    
    101
    
    
    
    (11,559
    )
    
    
    850Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,160
    )
    
    
    (2,160
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (699
    )
    
    
    (699
    )Income (loss) before income taxes
    
    $
    7,030
    
    
    $
    5,278
    
    
    $
    101
    
    
    $
    (14,417
    )
    
    $
    (2,008
    )
 For the Three Months Ended June 30, 2008Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    79,600
    
    
    $
    39,441
    
    
    $
    29,448
    
    
    $
    
    
    
    $
    148,489Operating income (loss)
    
    
    19,180
    
    
    
    6,361
    
    
    
    (268
    )
    
    
    (17,203
    )
    
    
    8,070Investment expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,709
    )
    
    
    (3,709
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    (44
    )Income (loss) before income taxes
    
    $
    19,180
    
    
    $
    6,361
    
    
    $
    (268
    )
    
    $
    (20,960
    )
    
    $
    4,313
 For the Six Months Ended June 30, 2009Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    129,376
    
    
    $
    70,521
    
    
    $
    49,210
    
    
    $
    
    
    
    $
    249,107Operating income (loss)
    
    
    19,947
    
    
    
    10,320
    
    
    
    (63
    )
    
    
    (26,635
    )
    
    
    3,569Investment expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,406
    )
    
    
    (5,406
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,324
    )
    
    
    (1,324
    )Income (loss) before income taxes
    
    $
    19,947
    
    
    $
    10,320
    
    
    $
    (63
    )
    
    $
    (33,366
    )
    
    $
    (3,162
    )
 For the Six Months Ended June 30, 2008Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    163,015
    
    
    $
    79,877
    
    
    $
    58,889
    
    
    $
    
    
    
    $
    301,781Operating income (loss)
    
    
    36,953
    
    
    
    13,746
    
    
    
    714
    
    
    
    (31,914
    )
    
    
    19,499Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,355
    
    
    
    1,355Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,096
    )
    
    
    (9,096
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    161Income (loss) before income taxes
    
    $
    36,953
    
    
    $
    13,746
    
    
    $
    714
    
    
    $
    (39,494
    )
    
    $
    11,919
 10




---



##### Table of Contents



6. COMPREHENSIVE INCOME (LOSS)
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Net income (loss)
    
    $
    205
    
    
    $
    4,337
    
    
    $
    (9,134
    )
    
    $
    10,938Other comprehensive loss:Unrealized gain (loss) from investments:Unrealized gains (losses)
    
    
    223
    
    
    
    (205
    )
    
    
    234
    
    
    
    (2,023
    )Related tax benefit (expense)
    
    
    (80
    )
    
    
    74
    
    
    
    (84
    )
    
    
    728Net
    
    
    143
    
    
    
    (131
    )
    
    
    150
    
    
    
    (1,295
    )Foreign currency translation adjustments:Unrealized gains
    
    
    861
    
    
    
    166
    
    
    
    445
    
    
    
    342Related tax benefit (expense)
    
    
    199
    
    
    
    (60
    )
    
    
    189
    
    
    
    (123
    )Net
    
    
    1,060
    
    
    
    106
    
    
    
    634
    
    
    
    219Unrealized gain from pension plan:Unrealized gains
    
    
    26
    
    
    
    14
    
    
    
    53
    
    
    
    27Related tax expense
    
    
    (9
    )
    
    
    (5
    )
    
    
    (19
    )
    
    
    (10
    )Net
    
    
    17
    
    
    
    9
    
    
    
    34
    
    
    
    17Unrealized loss from derivative financial instruments:Unrealized losses
    
    
    (14
    )
    
    
    (13
    )
    
    
    (28
    )
    
    
    (27
    )Related tax benefit
    
    
    5
    
    
    
    5
    
    
    
    10
    
    
    
    10Net
    
    
    (9
    )
    
    
    (8
    )
    
    
    (18
    )
    
    
    (17
    )Total other comprehensive income (loss)
    
    
    1,211
    
    
    
    (24
    )
    
    
    800
    
    
    
    (1,076
    )Comprehensive income (loss)
    
    $
    1,416
    
    
    $
    4,313
    
    
    $
    (8,334
    )
    
    $
    9,862
  Foreign
    
    
    Unrealized
    
    
    
    
    
    
    AccumulatedUnrealized
    
    
    Currency
    
    
    Gains
    
    
    Derivative
    
    
    OtherLosses from
    
    
    Translation
    
    
    From
    
    
    Financial
    
    
    ComprehensivePension Plan
    
    
    Adjustments
    
    
    Investments
    
    
    Instruments
    
    
    Loss(In thousands)Balance at June 30, 2009
    
    $
    (1,183
    )
    
    $
    (2,746
    )
    
    $
    150
    
    
    $
    355
    
    
    $
    (3,424
    )Balance at December 31, 2008
    
    $
    (1,217
    )
    
    $
    (3,380
    )
    
    $
    
    
    
    $
    373
    
    
    $
    (4,224
    )
 7. ACQUISITIONS
   11




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##### Table of Contents



8. SHAREBASED PAYMENT ARRANGEMENTS
    WeightedWeighted
    
    AverageWeighted
    
    Average
    
    Remaining
    
    AggregateAverage Number
    
    Grant-Date
    
    Contractual
    
    Intrinsic Valueof RSUs
    
    Fair Value
    
    Term (Years)
    
    (In thousands)Nonvested at December 31, 2008
    
    
    857,080
    
    
    $
    4.74Granted
    
    
    172,470
    
    
    
    4.47Forfeited
    
    
    107,481
    
    
    
    Vested
    
    
    5,721
    
    
    
    5.71Nonvested at June 30, 2009
    
    
    916,348
    
    
    $
    5.71
    
    
    
    3.15
    
    
    $
    5,232
    Six-Months Ended June 30,2009
    
    2008Risk-free interest rate
    
    
    *
    
    
    
    3.22
    %Expected dividend yield
    
    
    *
    
    
    
    6.86
    %Expected volatility
    
    
    *
    
    
    
    40.69
    %Expected term (in years)
    
    
    *
    
    
    
    4.0
 
 *
    
    Not applicable as there were no stock option grants during the six months ended June 30, 2009.  12




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##### Table of Contents



Weighted
    
    
    
    
    
    WeightedAverage
    
    Weighted
    
    AverageNumber of
    
    Average
    
    Remaining
    
    Aggregate IntrinsicOptions
    
    Exercise
    
    Contractual
    
    ValueShares
    
    Price
    
    Term (Year)
    
    (In thousands)Outstanding at December 31, 2008
    
    
    570,000
    
    
    $
    12.09Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    2,750
    
    
    
    14.58Outstanding at June 30, 2009
    
    
    567,250
    
    
    $
    12.08
    
    
    
    5.94
    
    
    $
    Options exercisable at June 30, 2009
    
    
    248,749
    
    
    $
    12.36
    
    
    
    5.78
    
    
    $
    Vested or expected to vest at June 30, 2009
    
    
    248,749
    
    
    $
    12.36
    
    
    
    5.78
    
    
    $
    
  info
  9. RESTRUCTURING CHARGES
   13




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##### Table of Contents



December 31,
    
    
    
    
    
    
    
    
    
    
    June 30,2008
    
    
    
    
    
    
    
    
    
    
    2009Beginning
    
    
    Amounts
    
    
    Amounts
    
    
    EndingAccrual
    
    
    Expensed
    
    
    Paid
    
    
    Accrual(in thousands)Data Group:Employee separation costs
    
    $
    194
    
    
    $
    3,400
    
    
    $
    1,569
    
    
    $
    2,025Facility closure costs
    
    $
    143
    
    
    $
    1,135
    
    
    $
    977
    
    
    $
    301Services Group:Employee separation costs
    
    $
    1,489
    
    
    $
    1,008
    
    
    $
    1,146
    
    
    $
    1,351Facility closure costs
    
    $
    
    
    
    $
    1,285
    
    
    $
    15
    
    
    $
    1,270Marketing Research Group:Employee separation costs
    
    $
    584
    
    
    $
    712
    
    
    $
    656
    
    
    $
    640Facility closure costs
    
    $
    
    
    
    $
    676
    
    
    $
    188
    
    
    $
    488Corporate Activities:Employee separation costs
    
    $
    409
    
    
    $
    1,296
    
    
    $
    313
    
    
    $
    1,392Facility closure costs
    
    $
    296
    
    
    $
    34
    
    
    $
    330
    
    
    $
    Total:Employee separation costs
    
    $
    2,676
    
    
    $
    6,416
    
    
    $
    3,684
    
    
    $
    5,408Facility closure costs
    
    $
    439
    
    
    $
    3,130
    
    
    $
    1,510
    
    
    $
    2,059
 10. FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
    14




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##### Table of Contents



Fair Value Measurements at June 30, 2009 UsingQuoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable(Level 1)
    
    (Level 2)
    
    Inputs (Level 3)
    
    Total
    
    Loss(in thousands)Assets held for sale
    
    $
    
    
    
    $
    2,815
    
    
    $
    
    
    
    $
    2,815
    
    
    $
    (389
    )Property and equipment
    
    
    
    
    
    
    
    
    
    
    229
    
    
    
    229
    
    
    
    (739
    )Intangible assets
    
    
    
    
    
    
    
    
    
    
    378
    
    
    
    378
    
    
    
    (896
    )Total
    
    $
    
    
    
    $
    2,815
    
    
    $
    607
    
    
    $
    3,422
    
    
    $
    (2,024
    )
      June 30, 2009
    
    December 31, 2008Carrying
    
    
    
    
    
    CarryingAmount
    
    Fair Value
    
    Amount
    
    Fair Value(in thousands)Financial assets:Cash and cash equivalents
    
    $
    7,603
    
    
    $
    7,603
    
    
    $
    4,691
    
    
    $
    4,691Marketable securities
    
    $
    611
    
    
    $
    611
    
    
    $
    992
    
    
    $
    992Other assets 
non-marketable
investment securities
    
    $
    160
    
    
    $
    160
    
    
    $
    174
    
    
    $
    174Financial liabilities:Long-term debt
    
    $
    193,455
    
    
    $
    198,329
    
    
    $
    300,644
    
    
    $
    309,248
    15




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##### Table of Contents



11. GOODWILL AND INTANGIBLE ASSETS
  June 30, 2009
    
    
    December 31, 2008(in thousands)Accumulated
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Net
    
    
    Cost
    
    
    Amortization
    
    
    NetGoodwill
    
    $
    353,088
    
    
    $
    
    
    
    $
    353,088
    
    
    $
    377,708
    
    
    $
    
    
    
    $
    377,708Other intangible assets:Non-compete agreements
    
    
    16,819
    
    
    
    14,646
    
    
    
    2,173
    
    
    
    16,911
    
    
    
    14,265
    
    
    
    2,646Core technology
    
    
    15,169
    
    
    
    14,996
    
    
    
    173
    
    
    
    15,323
    
    
    
    13,665
    
    
    
    1,658Customer base
    
    
    58,793
    
    
    
    30,718
    
    
    
    28,075
    
    
    
    58,638
    
    
    
    27,874
    
    
    
    30,764Trade names
    
    
    30,620
    
    
    
    15,558
    
    
    
    15,062
    
    
    
    30,741
    
    
    
    14,664
    
    
    
    16,077Purchased data processing software
    
    
    73,478
    
    
    
    73,478
    
    
    
    
    
    
    
    73,478
    
    
    
    73,478
    
    
    
    Acquired database costs
    
    
    87,971
    
    
    
    87,971
    
    
    
    
    
    
    
    87,971
    
    
    
    87,971
    
    
    
    Perpetual software license agreements
    
    
    8,000
    
    
    
    8,000
    
    
    
    
    
    
    
    8,000
    
    
    
    8,000
    
    
    
    Software and database development costs
    
    
    32,414
    
    
    
    17,320
    
    
    
    15,094
    
    
    
    30,299
    
    
    
    14,807
    
    
    
    15,492Deferred financing costs
    
    
    15,573
    
    
    
    11,876
    
    
    
    3,697
    
    
    
    14,488
    
    
    
    11,175
    
    
    
    3,313Total other intangible assets
    
    
    338,837
    
    
    
    274,563
    
    
    
    64,274
    
    
    
    335,849
    
    
    
    265,899
    
    
    
    69,950Total goodwill and other intangible assets
    
    $
    691,925
    
    
    $
    274,563
    
    
    $
    417,362
    
    
    $
    713,557
    
    
    $
    265,899
    
    
    $
    447,658
    16




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##### Table of Contents



12. PROPERTY AND EQUIPMENT
  June 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Property and equipment
    
    $
    197,587
    
    
    $
    197,756Less accumulated depreciation
    
    
    143,317
    
    
    
    138,521Property and equipment, net
    
    $
    54,270
    
    
    $
    59,235
  13. CONTINGENCIES
      17




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##### Table of Contents



14. RELATED PARTY TRANSACTIONS
    15. DEBT
  18




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16. SUBSEQUENT EVENTS
   19




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Three and Six Months Ended June 30, 2009, Compared to
Three and Six Months Ended June 30, 2008
  General
 Overview
  info info info
  
    
    Continuing and expanding our initiatives of outreach, transparency and communications
with our shareholders and the entire investment community.
 
    
    Accelerating our organic, profitable growth by leveraging our leadership position as
a data provider across our subsidiaries, creating both internal and external strategic
alliances to add value to new and existing customers, and capitalizing on our existing
cross selling opportunities among subsidiaries. We anticipate concentrating our efforts
on these opportunities for internal growth, instead of pursuing revenue growth primarily
through acquisitions.
 
    
    Reinvesting in the business to expand our product offerings, particularly in the
integrated digital realm. We plan to provide our customers new products and services,
including more internet based and interactive marketing solutions.
 
    
    Improving our financial foundation, by reducing costs (without jeopardizing service
to our customers), continuing to reduce our debt levels and leveraging our high margin
products to increase profitability.
 
    
    Continuing our focus on improved corporate governance, including operating under our
recently revamped formal policies, functioning under the guidance of our restructured
majority independent Board and working with our new management team.
 Sales & Marketing Strategy
 info
  20




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Growth Strategy
      RESULTS OF OPERATIONS
  21




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA:
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJune 30, 2009
    
    June 30, 2008
    
    June 30, 2009
    
    June 30, 2008Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Cost of goods and services
    
    
    38
    
    
    
    35
    
    
    
    38
    
    
    
    34Selling, general and administrative
    
    
    55
    
    
    
    54
    
    
    
    55
    
    
    
    54Depreciation and amortization of operating assets
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    3Amortization of intangible assets
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Total operating costs and expenses
    
    
    99
    
    
    
    95
    
    
    
    99
    
    
    
    93Operating income
    
    
    1
    
    
    
    5
    
    
    
    1
    
    
    
    7Other expense, net
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (3
    )Income (loss) before income taxes
    
    
    (1
    )
    
    
    3
    
    
    
    (1
    )
    
    
    4Income tax expense (benefit)
    
    
    (1
    )
    
    
    1
    
    
    
    
    
    
    
    1Net income (loss) from continuing operations
    
    
    (1
    )
    
    
    2
    
    
    
    (1
    )
    
    
    3Income (loss) from discontinued operations, net of tax
    
    
    1
    
    
    
    1
    
    
    
    (3
    )
    
    
    1Net income (loss)
    
    
    
    %
    
    
    3
    %
    
    
    (4
    )%
    
    
    4
    %
 OTHER DATA
 Three Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008
    
    
    June 30, 2009
    
    
    June 30, 2008(in thousands)SALES BY SEGMENT:Data Group
    
    $
    62,100
    
    
    $
    79,600
    
    
    $
    129,376
    
    
    $
    163,017Services Group
    
    
    34,769
    
    
    
    39,441
    
    
    
    70,521
    
    
    
    79,876Marketing Research Group
    
    
    24,701
    
    
    
    29,448
    
    
    
    49,210
    
    
    
    58,888Total
    
    $
    121,570
    
    
    $
    148,489
    
    
    $
    249,107
    
    
    $
    301,781SALES BY SEGMENT AS A PERCENTAGE OF NET
SALES:Data Group
    
    
    51
    %
    
    
    54
    %
    
    
    52
    %
    
    
    54
    %Services Group
    
    
    29
    
    
    
    27
    
    
    
    28
    
    
    
    26Marketing Research Group
    
    
    20
    
    
    
    19
    
    
    
    20
    
    
    
    20Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Net sales
   22




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##### Table of Contents



Cost of goods and services
     23




---



##### Table of Contents



Selling, general and administrative expenses
       24




---



##### Table of Contents



Depreciation and amortization of operating assets
      Amortization of intangible assets
     Operating income
  25




---



##### Table of Contents



Other expense, net
  Income tax expense (benefit)
  Income (loss) from discontinued operations, net of tax
  Liquidity and Capital Resources
 Overview
  26




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1 2
      27




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##### Table of Contents



Selected Condensed Consolidated Statements of Cash Flows Information
    Selected Condensed Consolidated Balance Sheet Information
    28




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Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
  Inflation
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  29




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##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
 (a) Evaluation of disclosure controls and procedures
    (b) Changes in internal control over financial reporting
  
    
    On December 5, 2008, the Company appointed a new Executive Vice President and Chief
Financial Officer.
 
    
    On December 12, 2008, the Company hired a new Director of GAAP Analysis to assist with
accounting for non-routine transactions.
 
    
    On April 6, 2009, the Company hired a new Manager of Income Tax Accounting.
 
    
    On June 8, 2009, the Company hired a Vice President of Financial Reporting reporting
directly to the Chief Financial Officer.
 
    
    On June 8, 2009, the Company appointed a Senior Vice President and a Vice President of
Financial Planning and Analysis.
 
    
    On June 8, 2009, the Company announced that the Companys Group Controllers for our
three operating segments report directly to the Corporate Controller.
 
    
    On June 29, 2009, the Company hired a new Assistant Corporate Controller reporting
directly to the Corporate Controller.
  30




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
        31




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##### Table of Contents



32




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##### Table of Contents



ITEM 6.
    
    EXHIBITS
 ExhibitNo.
    
    
    
    Description3.1
    
    
    
    Certificate of Incorporation, as amended through October 22, 1999, incorporated herein by
reference to exhibits filed with our Registration Statement on Form 8-A, as amended, filed March
20, 2000.3.2
    
    
    
    Amended and Restated Certificate of Designation of Participating Preferred Stock, filed in
Delaware on May 5, 2009, incorporated herein by reference to exhibits filed with our Registration
Statement on Form 8-A, as amended, filed May 6, 2009.3.3
    
    
    
    Certificate of Ownership and Merger effecting the name change to infoGROUP Inc., incorporated
herein by reference to Exhibit 3.1 filed with our Current Report on Form 8-K, filed June 4, 20083.4
    
    
    
    Bylaws, incorporated herein by reference to our Annual Report on Form 10-K for the year ended
December 31, 2007, filed August 8, 2008.4.1
    
    
    
    Preferred Share Rights Agreement, incorporated herein by reference to our Registration Statement
on Form 8-A, as amended, filed May 6, 2009.4.2
    
    
    
    Specimen of Common Stock Certificate, incorporated herein by reference to the exhibits filed with
our Registration Statement on Form 8-A, as amended, filed March 20, 2000.31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 33




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##### Table of Contents



SIGNATURE
  infoGROUP Inc.Date: August 10, 2009
    
    
    
    /s/ Thomas OberdorfThomas OberdorfExecutive Vice President and Chief Financial Officer
 34




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    
    
    Description2.1
    
    
    
    Agreement and Plan of Merger, dated as June 28, 2007, by and among infoUSA Inc.,
Knickerbocker Acquisition Corp. and Guideline, Inc., incorporated herein by reference to Exhibit
2.1 filed with the Companys Current Report on Form 8-K filed July 5, 2007.3.1
    
    
    
    Certificate of Incorporation, as amended through October 22, 1999, incorporated herein by
reference to exhibits filed with our Registration Statement on Form 8-A, as amended, filed March
20, 2000.3.2
    
    
    
    Amended and Restated Certificate of Designation of Participating Preferred Stock, filed in
Delaware on May 5, 2009, incorporated herein by reference to exhibits filed with our Registration
Statement on Form 8-A, as amended, filed May 6, 2009.3.3
    
    
    
    Certificate of Ownership and Merger effecting the name change to infoGROUP Inc., incorporated
herein by reference to Exhibit 3.1 filed with our Current Report on Form 8-K, filed June 4, 20083.4
    
    
    
    Bylaws, incorporated herein by reference to our Annual Report on Form 10-K for the year ended
December 31, 2007, filed August 8, 2008.4.1
    
    
    
    Preferred Share Rights Agreement, incorporated herein by reference to our Registration Statement
on Form 8-A, as amended, filed May 6, 2009.4.2
    
    
    
    Specimen of Common Stock Certificate, incorporated herein by reference to the exhibits filed with
our Registration Statement on Form 8-A, as amended, filed March 20, 2000.31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1*
    
    
    
    Certification of Chief Executive Officer pursuant to Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    
    
    Certification of Chief Financial Officer pursuant to Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 35