##### 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 September 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.
  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 þNon-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 September 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30,
2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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
    
    
    30Item 4. Controls and Procedures
    
    
    30PART II  OTHER INFORMATION
    
    
    31Item 1. Legal Proceedings
    
    
    31Item 4. Submission of Matters to a Vote of Security Holders
    
    
    32Item 6. Exhibits
    
    
    33Signature
    
    
    34Index to Exhibits
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
  2




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info GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 September 30,
    
    
    December 31,2009
    
    
    2008(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,274
    
    
    $
    4,691Marketable securities
    
    
    1,505
    
    
    
    992Trade accounts receivable, net of allowances of $1,839 and $2,177, respectively
    
    
    40,474
    
    
    
    56,030List brokerage trade accounts receivable, net of allowances of $485 and $494, respectively
    
    
    76,691
    
    
    
    86,841Unbilled services
    
    
    13,143
    
    
    
    11,120Deferred income taxes
    
    
    4,901
    
    
    
    6,889Income taxes receivable
    
    
    
    
    
    
    3,782Prepaid expenses
    
    
    9,685
    
    
    
    9,382Deferred marketing costs
    
    
    959
    
    
    
    1,004Assets held for sale
    
    
    1,594
    
    
    
    3,960Current assets of discontinued operations
    
    
    
    
    
    
    36,845Total current assets
    
    
    156,226
    
    
    
    221,536Property and equipment, net
    
    
    50,985
    
    
    
    59,235Goodwill
    
    
    353,794
    
    
    
    377,708Intangible assets, net
    
    
    61,077
    
    
    
    69,950Other assets
    
    
    2,711
    
    
    
    2,505Escrow, noncurrent
    
    
    10,020
    
    
    
    Noncurrent assets of discontinued operations
    
    
    
    
    
    
    84,844$
    634,813
    
    
    $
    815,778LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    2,815
    
    
    $
    2,899Accounts payable
    
    
    11,927
    
    
    
    29,569List brokerage trade accounts payable
    
    
    63,076
    
    
    
    79,827Accrued payroll expenses
    
    
    34,266
    
    
    
    32,128Accrued expenses
    
    
    16,283
    
    
    
    16,068Income taxes payable
    
    
    5,873
    
    
    
    Deferred revenue
    
    
    48,941
    
    
    
    60,479Current liabilities of discontinued operations
    
    
    
    
    
    
    16,659Total current liabilities
    
    
    183,181
    
    
    
    237,629Long-term debt, net of current portion
    
    
    184,299
    
    
    
    297,745Deferred income taxes
    
    
    4,810
    
    
    
    10,552Other liabilities
    
    
    11,287
    
    
    
    5,417Noncurrent liabilities of discontinued operations
    
    
    
    
    
    
    16,406Stockholders equity:Common stock, $.0025 par value. Authorized 295,000,000 shares; 57,498,362 shares
issued and outstanding at September 30, 2009 and 57,019,030 shares issued and
outstanding at December 31, 2008
    
    
    144
    
    
    
    142Paid-in capital
    
    
    150,292
    
    
    
    147,029Retained earnings
    
    
    109,748
    
    
    
    114,082Note 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
  3




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info GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 THREE MONTHS ENDED
    
    
    NINE MONTHS ENDEDSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(UNAUDITED)
    
    
    (UNAUDITED)Net sales
    
    $
    124,985
    
    
    $
    144,996
    
    
    $
    374,092
    
    
    $
    446,777Costs and expenses:Cost of goods and services
    
    
    45,556
    
    
    
    51,623
    
    
    
    138,453
    
    
    
    154,912Selling, general and administrative
    
    
    63,065
    
    
    
    97,328
    
    
    
    200,174
    
    
    
    259,294Depreciation and amortization of operating assets
    
    
    4,653
    
    
    
    5,249
    
    
    
    14,412
    
    
    
    15,765Amortization of intangible assets
    
    
    2,285
    
    
    
    3,201
    
    
    
    8,058
    
    
    
    9,712Total operating costs and expenses
    
    
    115,559
    
    
    
    157,401
    
    
    
    361,097
    
    
    
    439,683Operating income (loss)
    
    
    9,426
    
    
    
    (12,405
    )
    
    
    12,995
    
    
    
    7,094Investment income
    
    
    189
    
    
    
    316
    
    
    
    188
    
    
    
    1,671Other income (expense)
    
    
    337
    
    
    
    300
    
    
    
    (987
    )
    
    
    461Interest 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
    )
    
    
    5,065Net income (loss)
    
    $
    4,800
    
    
    $
    (8,571
    )
    
    $
    (4,334
    )
    
    $
    2,367Basic earnings (loss) per share:Income (loss) from continuing operations
    
    $
    0.08
    
    
    $
    (0.18
    )
    
    $
    0.05
    
    
    $
    (0.05
    )Income (loss) from discontinued operations
    
    $
    
    
    
    $
    0.03
    
    
    $
    (0.13
    )
    
    $
    0.09Net income (loss)
    
    $
    0.08
    
    
    $
    (0.15
    )
    
    $
    (0.08
    )
    
    $
    0.04Basic weighted average shares outstanding
    
    
    57,808
    
    
    
    57,054
    
    
    
    57,294
    
    
    
    56,698Diluted earnings (loss) per share:Income (loss) from continuing operations
    
    $
    0.08
    
    
    $
    (0.18
    )
    
    $
    0.05
    
    
    $
    (0.05
    )Income (loss) from discontinued operations
    
    $
    
    
    
    $
    0.03
    
    
    $
    (0.12
    )
    
    $
    0.09Net income (loss)
    
    $
    0.08
    
    
    $
    (0.15
    )
    
    $
    (0.07
    )
    
    $
    0.04Diluted weighted average shares outstanding
    
    
    58,369
    
    
    
    57,054
    
    
    
    57,870
    
    
    
    56,698
  4




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info GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 NINE MONTHS ENDEDSeptember 30,2009
    
    
    2008(UNAUDITED)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (4,334
    )
    
    $
    2,367Net income (loss) from discontinued operations
    
    
    (7,188
    )
    
    
    5,065Net income (loss) from continuing operations
    
    
    2,854
    
    
    
    (2,698
    )Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of operating assets
    
    
    14,412
    
    
    
    15,765Amortization of intangible assets
    
    
    8,058
    
    
    
    9,712Amortization of deferred financing fees
    
    
    1,090
    
    
    
    687Deferred income taxes
    
    
    (3,914
    )
    
    
    (5,130
    )Non-cash stock compensation expense
    
    
    1,197
    
    
    
    373Non-cash 401(k) contribution in common stock
    
    
    2,067
    
    
    
    2,171(Gain) loss on sale of assets and marketable securities
    
    
    554
    
    
    
    (1,494
    )Non-cash other expense (income)
    
    
    20
    
    
    
    Asset impairment charges
    
    
    8,133
    
    
    
    2,280Changes in assets and liabilities, net of effect of acquisitions:Trade accounts receivable and unbilled services
    
    
    14,941
    
    
    
    14,696List brokerage trade accounts receivable
    
    
    10,150
    
    
    
    12,482Prepaid expenses and other assets
    
    
    (398
    )
    
    
    (2,009
    )Deferred marketing costs
    
    
    45
    
    
    
    258Accounts payable
    
    
    (17,804
    )
    
    
    8,019List brokerage trade accounts payable
    
    
    (16,750
    )
    
    
    (18,465
    )Income taxes receivable and payable, net
    
    
    9,565
    
    
    
    (10,013
    )Accrued expenses and other liabilities
    
    
    7,726
    
    
    
    9,974Deferred revenue
    
    
    (12,503
    )
    
    
    (12,194
    )Net cash provided by operating activities  continuing operations
    
    
    29,443
    
    
    
    24,414Net cash provided by (used in) operating activities  discontinued operations
    
    
    (33,076
    )
    
    
    7,648Net cash provided by (used in) operating activities
    
    
    (3,633
    )
    
    
    32,062CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of marketable securities
    
    
    9
    
    
    
    1,813Purchases of marketable securities
    
    
    
    
    
    
    (3,255
    )Proceeds from sale of property and equipment
    
    
    1,894
    
    
    
    4,651Purchases of property and equipment
    
    
    (5,065
    )
    
    
    (17,019
    )Acquisitions of businesses, net of cash acquired
    
    
    
    
    
    
    (18,901
    )Software development costs and purchases of other intangibles
    
    
    (7,139
    )
    
    
    (6,355
    )Net cash used in investing activities  continuing operations
    
    
    (10,301
    )
    
    
    (39,066
    )Net cash provided by (used in) investing activities  discontinued operations
    
    
    128,376
    
    
    
    (1,600
    )Net cash provided by (used in) investing activities
    
    
    118,075
    
    
    
    (40,666
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of long-term debt
    
    
    (169,530
    )
    
    
    (50,540
    )Proceeds from long-term debt
    
    
    56,000
    
    
    
    79,300Deferred 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
    
    
    (112,415
    )
    
    
    7,864Effect of exchange rate fluctuations on cash and cash equivalents
    
    
    556
    
    
    
    (405
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,583
    
    
    
    (1,145
    )Cash and cash equivalents, beginning
    
    
    4,691
    
    
    
    9,924Cash and cash equivalents, ending
    
    $
    7,274
    
    
    $
    8,779Supplemental cash flow information:Interest paid
    
    $
    6,704
    
    
    $
    12,718Income taxes paid
    
    $
    44,508
    
    
    $
    16,980
  5




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info GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  info
 1. GENERAL
 Basis of Presentation
 info
     Recent Accounting Pronouncements
 The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a
replacement of FASB Statement No. 162
 6




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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
 Interim Disclosures about Fair Value of Financial Instruments
 Amendments to FASB Interpretation No. 46(R)
 Accounting for Transfers of Financial Assets  an amendment of
Statement No. 140
 Multiple-Deliverable Revenue Arrangements
 Fair Value Measurements and Disclosures
 Measuring Liabilities at Fair Value
 2. EARNINGS (LOSS) PER SHARE INFORMATION
  7




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Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(in thousands)
    
    (in thousands)2009
    
    2008
    
    2009
    
    2008Weighted
average number of
shares used in
basic earnings
(loss) per share
    
    
    57,808
    
    
    
    57,054
    
    
    
    57,294
    
    
    
    56,698Net additional
common stock
equivalent shares
outstanding after
assumed exercise of
stock options
    
    
    561
    
    
    
    
    
    
    
    576
    
    
    
    Weighted average
number of shares
outstanding used in
diluted earnings
(loss) per share
    
    
    58,369
    
    
    
    57,054
    
    
    
    57,870
    
    
    
    56,698
 3. DISCONTINUED OPERATIONS
 Macro Divestiture
     Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    2008(in thousands)
    
    
    (in thousands)Net sales
    
    $
    
    
    
    $
    36,884
    
    
    $
    35,440
    
    
    $
    113,437Operating income (loss) from
discontinued operations
before income taxes
    
    
    (11
    )
    
    
    3,486
    
    
    
    1,849
    
    
    
    9,021Gain from disposal of business
    
    
    
    
    
    
    
    
    
    
    27,838
    
    
    
    Income (loss) before income taxes
    
    
    (11
    )
    
    
    3,486
    
    
    
    29,687
    
    
    
    9,021Income tax expense
    
    
    (35
    )
    
    
    (1,915
    )
    
    
    (36,875
    )
    
    
    (3,956
    )Income (loss) from
discontinued operations, net
of tax
    
    $
    (46
    )
    
    $
    1,571
    
    
    $
    (7,188
    )
    
    $
    5,065
  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 September 30, 2009Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    64,046
    
    
    $
    36,951
    
    
    $
    23,988
    
    
    $
    
    
    
    $
    124,985Operating income (loss)
    
    
    15,925
    
    
    
    8,975
    
    
    
    (681
    )
    
    
    (14,793
    )
    
    
    9,426Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189
    
    
    
    189Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,111
    )
    
    
    (2,111
    )Other income (expense)
    
    
    380
    
    
    
    
    
    
    
    
    
    
    
    (43
    )
    
    
    337Income (loss) before income taxes
    
    $
    16,305
    
    
    $
    8,975
    
    
    $
    (681
    )
    
    $
    (16,758
    )
    
    $
    7,841
 For the Three Months Ended September 30, 2008Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    74,839
    
    
    $
    41,503
    
    
    $
    28,654
    
    
    $
    
    
    
    $
    144,996Operating income (loss)
    
    
    14,660
    
    
    
    7,896
    
    
    
    1,383
    
    
    
    (36,344
    )
    
    
    (12,405
    )Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    316
    
    
    
    316Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,251
    )
    
    
    (4,251
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    300Income (loss) before income taxes
    
    $
    14,660
    
    
    $
    7,896
    
    
    $
    1,383
    
    
    $
    (39,979
    )
    
    $
    (16,040
    )
 For the Nine Months Ended September 30, 2009Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    193,422
    
    
    $
    107,472
    
    
    $
    73,198
    
    
    $
    
    
    
    $
    374,092Operating income (loss)
    
    
    35,872
    
    
    
    19,295
    
    
    
    (744
    )
    
    
    (41,428
    )
    
    
    12,995Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    188Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,517
    )
    
    
    (7,517
    )Other income (expense)
    
    
    380
    
    
    
    
    
    
    
    
    
    
    
    (1,367
    )
    
    
    (987
    )Income (loss) before income taxes
    
    $
    36,252
    
    
    $
    19,295
    
    
    $
    (744
    )
    
    $
    (50,124
    )
    
    $
    4,679
 For the Nine Months Ended September 30, 2008Marketing
    
    
    
    
    
    
    CondensedData
    
    
    Services
    
    
    Research
    
    
    Corporate
    
    
    ConsolidatedGroup
    
    
    Group
    
    
    Group
    
    
    Activities
    
    
    Total(In thousands)Net sales
    
    $
    237,854
    
    
    $
    121,380
    
    
    $
    87,543
    
    
    $
    
    
    
    $
    446,777Operating income (loss)
    
    
    51,519
    
    
    
    21,368
    
    
    
    993
    
    
    
    (66,786
    )
    
    
    7,094Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,671
    
    
    
    1,671Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,347
    )
    
    
    (13,347
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    461
    
    
    
    461Income (loss) before income taxes
    
    $
    51,519
    
    
    $
    21,368
    
    
    $
    993
    
    
    $
    (78,001
    )
    
    $
    (4,121
    )
 10




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##### Table of Contents



6. COMPREHENSIVE INCOME (LOSS)
  For the Three
    
    
    For the NineMonths Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Net income (loss)
    
    $
    4,800
    
    
    $
    (8,571
    )
    
    $
    (4,334
    )
    
    $
    2,367Other comprehensive income (loss):Unrealized gain (loss) from investments:Unrealized gains (losses)
    
    
    896
    
    
    
    (386
    )
    
    
    1,130
    
    
    
    (2,409
    )Related tax benefit (expense)
    
    
    (323
    )
    
    
    139
    
    
    
    (407
    )
    
    
    867Net
    
    
    573
    
    
    
    (247
    )
    
    
    723
    
    
    
    (1,542
    )Foreign currency translation adjustments:Unrealized gains
    
    
    1,233
    
    
    
    (2,144
    )
    
    
    1,678
    
    
    
    (1,802
    )Related tax benefit (expense)
    
    
    (537
    )
    
    
    772
    
    
    
    (348
    )
    
    
    649Net
    
    
    696
    
    
    
    (1,372
    )
    
    
    1,330
    
    
    
    (1,153
    )Unrealized gain from pension plan:Unrealized gains
    
    
    26
    
    
    
    14
    
    
    
    79
    
    
    
    41Related tax expense
    
    
    (9
    )
    
    
    (5
    )
    
    
    (28
    )
    
    
    (15
    )Net
    
    
    17
    
    
    
    9
    
    
    
    51
    
    
    
    26Unrealized loss from derivative financial instruments:Unrealized losses
    
    
    (15
    )
    
    
    (14
    )
    
    
    (43
    )
    
    
    (41
    )Related tax benefit
    
    
    5
    
    
    
    5
    
    
    
    15
    
    
    
    15Net
    
    
    (10
    )
    
    
    (9
    )
    
    
    (28
    )
    
    
    (26
    )Total other comprehensive income (loss)
    
    
    1,276
    
    
    
    (1,619
    )
    
    
    2,076
    
    
    
    (2,695
    )Comprehensive income (loss)
    
    $
    6,076
    
    
    $
    (10,190
    )
    
    $
    (2,258
    )
    
    $
    (328
    )
  Foreign
    
    
    Unrealized
    
    
    
    
    
    
    AccumulatedUnrealized
    
    
    Currency
    
    
    Gains
    
    
    Derivative
    
    
    OtherLosses from
    
    
    Translation
    
    
    From
    
    
    Financial
    
    
    ComprehensivePension Plan
    
    
    Adjustments
    
    
    Investments
    
    
    Instruments
    
    
    Loss(In thousands)Balance at September 30, 2009
    
    $
    (1,166
    )
    
    $
    (2,050
    )
    
    $
    723
    
    
    $
    345
    
    
    $
    (2,148
    )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
    
    
    143,481
    
    
    
    Vested/Issued
    
    
    5,721
    
    
    
    5.71Nonvested at September 30, 2009
    
    
    880,348
    
    
    $
    7.01
    
    
    
    2.88
    
    
    $
    6,171
    Nine-Months EndedSeptember 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 nine months ended September 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
    
    
    
    14.58Expired
    
    
    2,250
    
    
    
    14.58Outstanding at September 30, 2009
    
    
    565,000
    
    
    $
    12.07
    
    
    
    5.71
    
    
    $
    51Options exercisable at September 30, 2009
    
    
    246,499
    
    
    $
    12.34
    
    
    
    5.58
    
    
    $
    13Vested or expected to vest at
September 30, 2009
    
    
    246,499
    
    
    $
    12.34
    
    
    
    5.58
    
    
    $
    13
  info
  9. RESTRUCTURING CHARGES
   13




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##### Table of Contents



December 31,
    
    
    
    
    
    
    
    
    
    
    September 30,2008
    
    
    
    
    
    
    
    
    
    
    2009Beginning
    
    
    Amounts
    
    
    Amounts
    
    
    EndingAccrual
    
    
    Expensed
    
    
    Paid
    
    
    Accrual(in thousands)Data Group:Employee separation costs
    
    $
    194
    
    
    $
    4,517
    
    
    $
    2,561
    
    
    $
    2,150Facility closure costs
    
    $
    143
    
    
    $
    1,708
    
    
    $
    1,172
    
    
    $
    679Services Group:Employee separation costs
    
    $
    1,489
    
    
    $
    1,022
    
    
    $
    1,516
    
    
    $
    995Facility closure costs
    
    $
    
    
    
    $
    1,561
    
    
    $
    266
    
    
    $
    1,295Marketing Research Group:Employee separation costs
    
    $
    584
    
    
    $
    913
    
    
    $
    879
    
    
    $
    618Facility closure costs
    
    $
    
    
    
    $
    2,057
    
    
    $
    485
    
    
    $
    1,572Corporate Activities:Employee separation costs
    
    $
    409
    
    
    $
    1,439
    
    
    $
    787
    
    
    $
    1,061Facility closure costs
    
    $
    296
    
    
    $
    9
    
    
    $
    305
    
    
    $
    Total:Employee separation costs
    
    $
    2,676
    
    
    $
    7,891
    
    
    $
    5,743
    
    
    $
    4,824Facility closure costs
    
    $
    439
    
    
    $
    5,335
    
    
    $
    2,228
    
    
    $
    3,546
 10. FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair Value Measurements
    14




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Fair Value Measurements at September 30, 2009 Using
    
    
    
    Loss RecognizedQuoted Prices in
    
    
    
    
    
    
    
    During Nine MonthsActive Markets for
    
    Significant Other
    
    Significant
    
    
    
    EndedIdentical Assets
    
    Observable Inputs
    
    Unobservable
    
    
    
    September 30,(Level 1)
    
    (Level 2)
    
    Inputs (Level 3)
    
    Total
    
    2009(in thousands)Assets held for sale
    
    $
    
    
    
    $
    1,594
    
    
    $
    
    
    
    $
    1,594
    
    
    $
    (490
    )Property and equipment
    
    
    
    
    
    
    
    
    
    
    235
    
    
    
    235
    
    
    
    (739
    )Intangible assets
    
    
    
    
    
    
    
    
    
    
    336
    
    
    
    336
    
    
    
    (896
    )Total
    
    $
    
    
    
    $
    1,594
    
    
    $
    571
    
    
    $
    2,165
    
    
    $
    (2,125
    )
      September 30, 2009
    
    December 31, 2008Carrying
    
    
    
    
    
    CarryingAmount
    
    Fair Value
    
    Amount
    
    Fair Value(in thousands)Financial assets:Cash and cash equivalents
    
    $
    7,274
    
    
    $
    7,274
    
    
    $
    4,691
    
    
    $
    4,691Marketable securities
    
    $
    1,505
    
    
    $
    1,505
    
    
    $
    992
    
    
    $
    992Other assets 
non-marketable
investment securities
    
    $
    160
    
    
    $
    160
    
    
    $
    174
    
    
    $
    174Financial liabilities:Long-term debt
    
    $
    187,114
    
    
    $
    192,628
    
    
    $
    300,644
    
    
    $
    309,248
     15




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##### Table of Contents



11. GOODWILL AND INTANGIBLE ASSETS
  September 30, 2009
    
    
    December 31, 2008(in thousands)Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Net
    
    
    Cost
    
    
    Amortization
    
    
    NetGoodwill
    
    $
    353,794
    
    
    $
    
    
    
    $
    353,794
    
    
    $
    377,708
    
    
    $
    
    
    
    $
    377,708Other intangible assets:Non-compete agreements
    
    
    16,752
    
    
    
    14,830
    
    
    
    1,922
    
    
    
    16,911
    
    
    
    14,265
    
    
    
    2,646Core technology
    
    
    15,234
    
    
    
    15,096
    
    
    
    138
    
    
    
    15,323
    
    
    
    13,665
    
    
    
    1,658Customer base
    
    
    59,083
    
    
    
    32,410
    
    
    
    26,673
    
    
    
    58,638
    
    
    
    27,874
    
    
    
    30,764Trade names
    
    
    30,690
    
    
    
    16,047
    
    
    
    14,643
    
    
    
    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
    
    
    32,962
    
    
    
    18,570
    
    
    
    14,392
    
    
    
    30,299
    
    
    
    14,807
    
    
    
    15,492Deferred financing costs
    
    
    15,573
    
    
    
    12,264
    
    
    
    3,309
    
    
    
    14,488
    
    
    
    11,175
    
    
    
    3,313Total other intangible assets
    
    
    339,743
    
    
    
    278,666
    
    
    
    61,077
    
    
    
    335,849
    
    
    
    265,899
    
    
    
    69,950Total goodwill and other intangible assets
    
    $
    693,537
    
    
    $
    278,666
    
    
    $
    414,871
    
    
    $
    713,557
    
    
    $
    265,899
    
    
    $
    447,658
    16




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##### Table of Contents



12. PROPERTY AND EQUIPMENT
  September 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Property and equipment
    
    $
    196,469
    
    
    $
    197,756Less accumulated depreciation
    
    
    145,484
    
    
    
    138,521Property and equipment, net
    
    $
    50,985
    
    
    $
    59,235
  13. CONTINGENCIES
       17




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14. RELATED PARTY TRANSACTIONS
    18




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##### Table of Contents



15. DEBT
     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 Nine Months Ended September 30, 2009, Compared to
Three and Nine Months Ended September 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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##### Table of Contents



Growth Strategy
      RESULTS OF OPERATIONS
  21




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA:
 Three Months Ended
    
    Three Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30, 2009
    
    September 30, 2008
    
    September 30, 2009
    
    September 30, 2008Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Cost of goods and services
    
    
    36
    
    
    
    36
    
    
    
    37
    
    
    
    35Selling, general and administrative
    
    
    51
    
    
    
    67
    
    
    
    54
    
    
    
    58Depreciation and amortization of operating assets
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    3Amortization of intangible assets
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Total operating costs and expenses
    
    
    93
    
    
    
    109
    
    
    
    97
    
    
    
    98Operating income
    
    
    7
    
    
    
    (9
    )
    
    
    3
    
    
    
    2Other expense, net
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )
    
    
    (3
    )Income (loss) before income taxes
    
    
    6
    
    
    
    (11
    )
    
    
    1
    
    
    
    (1
    )Income tax expense (benefit)
    
    
    2
    
    
    
    (4
    )
    
    
    
    
    
    
    Net income (loss) from continuing operations
    
    
    4
    
    
    
    (7
    )
    
    
    1
    
    
    
    (1
    )Income (loss) from discontinued operations, net of tax
    
    
    
    
    
    
    1
    
    
    
    (2
    )
    
    
    1Net income (loss)
    
    
    4
    %
    
    
    (6
    )%
    
    
    (1
    )%
    
    
    
    %
 OTHER DATA
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months  Ended
    
    
    Nine  Months EndedSeptember 30, 2009
    
    
    September 30, 2008
    
    
    September 30, 2009
    
    
    September 30, 2008(in thousands)SALES BY SEGMENT:Data Group
    
    $
    64,046
    
    
    $
    74,839
    
    
    $
    193,422
    
    
    $
    237,854Services Group
    
    
    36,951
    
    
    
    41,503
    
    
    
    107,472
    
    
    
    121,380Marketing Research Group
    
    
    23,988
    
    
    
    28,654
    
    
    
    73,198
    
    
    
    87,543Total
    
    $
    124,985
    
    
    $
    144,996
    
    
    $
    374,092
    
    
    $
    446,777SALES BY SEGMENT AS A PERCENTAGE OF NETSALES:Data Group
    
    
    51
    %
    
    
    51
    %
    
    
    52
    %
    
    
    53
    %Services Group
    
    
    30
    
    
    
    29
    
    
    
    29
    
    
    
    27Marketing Research Group
    
    
    19
    
    
    
    20
    
    
    
    19
    
    
    
    20Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Net sales
   22




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##### Table of Contents



Cost of goods and services
     23




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##### Table of Contents



Selling, general and administrative expenses
      24




---



##### Table of Contents



Depreciation and amortization of operating assets
      Amortization of intangible assets
   25




---



##### Table of Contents



Operating income (loss)
      Other expense, net
  Income tax expense (benefit)
  26




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##### Table of Contents



Income (loss) from discontinued operations, net of tax
  Liquidity and Capital Resources
 Overview
  1 2
    27




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##### Table of Contents



Selected Condensed Consolidated Statements of Cash Flows Information
   28




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##### Table of Contents



Selected Condensed Consolidated Balance Sheet Information
            Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
  29




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##### Table of Contents



Inflation
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 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 who will
report 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 changed the reporting
relationships so 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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PART II
 OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
       31




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Director Name
    
    For
    
    WithheldVinod Gupta
    
    
    32,702,131
    
    
    
    20,936,550Gary Morin
    
    
    39,592,542
    
    
    
    14,046,139Roger Siboni
    
    
    39,720,346
    
    
    
    13,918,335Thomas L. Thomas
    
    
    39,730,235
    
    
    
    13,908,446
  Matter Voted Upon
    
    For
    
    Against
    
    Abstain
    
    Broker Non-voteRatification of
Independent
Registered Public
Accounting Firm
    
    
    51,645,739
    
    
    
    1,985,154
    
    
    
    7,788
    
    
    
    
 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: November 9, 2009
    /s/ Thomas OberdorfThomas OberdorfExecutive Vice President andChief Financial Officer 34




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##### Table of Contents



INDEX TO 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 35