##### 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, 2007
 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 0-19598
 infoUSA INC.
 
  DELAWARE
    
    47-0751545(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification
Number)5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA
    
    68127(Address of principal executive offices)
    
    (Zip Code)
   
   þ o
  o þ o
 o þ




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##### Table of Contents



infoUSA INC.
 INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of June 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2007 and 2006
    
    
    4Consolidated Statements of Cash Flows for the Six Months ended June 30, 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24PART II  OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 6. Exhibits
    
    
    27Signature
    
    
    28Index to ExhibitsCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
 2




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##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS
 infoUSA INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share amounts)
 June 30,
    
    
    December 31,2007
    
    
    2006(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,541
    
    
    $
    4,433Marketable securities
    
    
    1,431
    
    
    
    2,665Trade accounts receivable, net of allowances of $1,008 and $878, respectively
    
    
    63,532
    
    
    
    76,628List brokerage trade accounts receivable
    
    
    51,586
    
    
    
    68,437Unbilled services
    
    
    24,584
    
    
    
    20,794Deferred income taxes
    
    
    5,091
    
    
    
    3,522Prepaid expenses
    
    
    8,531
    
    
    
    7,268Deferred marketing costs
    
    
    3,715
    
    
    
    3,485Total current assets
    
    
    163,011
    
    
    
    187,232Property and equipment, net
    
    
    67,619
    
    
    
    61,172Goodwill
    
    
    389,314
    
    
    
    381,749Intangible assets, net
    
    
    103,475
    
    
    
    108,046Other assets
    
    
    13,829
    
    
    
    11,376$
    737,248
    
    
    $
    749,575LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    6,036
    
    
    $
    4,627Accounts payable
    
    
    27,263
    
    
    
    27,474List brokerage trade accounts payable
    
    
    45,892
    
    
    
    62,028Accrued payroll expenses
    
    
    28,105
    
    
    
    33,608Accrued expenses
    
    
    16,484
    
    
    
    12,149Income taxes payable
    
    
    1,066
    
    
    
    4,655Deferred revenue
    
    
    70,341
    
    
    
    77,944Total current liabilities
    
    
    195,187
    
    
    
    222,485Long-term debt, net of current portion
    
    
    274,041
    
    
    
    255,263Deferred income taxes
    
    
    27,721
    
    
    
    35,421Other liabilities
    
    
    10,426
    
    
    
    2,248Stockholders equity:Common stock, $.0025 par value. Authorized 295,000,000 shares; 55,626,183 shares
issued and outstanding at June 30, 2007 and 55,460,322 shares issued and
outstanding at December 31, 2006
    
    
    139
    
    
    
    138Paid-in capital
    
    
    129,017
    
    
    
    126,943Retained earnings
    
    
    101,647
    
    
    
    108,391Accumulated other comprehensive loss
    
    
    (930
    )
    
    
    (1,314
    )Total stockholders equity
    
    
    229,873
    
    
    
    234,158$
    737,248
    
    
    $
    749,575
 
 3




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infoUSA INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDEDJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(UNAUDITED)
    
    
    (UNAUDITED)Net sales
    
    $
    160,075
    
    
    $
    100,306
    
    
    $
    317,957
    
    
    $
    203,376Costs and expenses:Cost of goods and services
    
    
    64,852
    
    
    
    26,473
    
    
    
    127,180
    
    
    
    52,198Selling, general and administrative
    
    
    70,012
    
    
    
    58,321
    
    
    
    141,595
    
    
    
    112,400Depreciation and amortization of operating assets
    
    
    5,114
    
    
    
    3,392
    
    
    
    9,917
    
    
    
    6,532Amortization of intangible assets
    
    
    4,074
    
    
    
    4,595
    
    
    
    8,397
    
    
    
    9,232Total operating costs and expenses
    
    
    144,052
    
    
    
    92,781
    
    
    
    287,089
    
    
    
    180,362Operating income
    
    
    16,023
    
    
    
    7,525
    
    
    
    30,868
    
    
    
    23,014Other expense, net:Investment income
    
    
    32
    
    
    
    100
    
    
    
    54
    
    
    
    172Other expense
    
    
    (327
    )
    
    
    (2
    )
    
    
    (351
    )
    
    
    (317
    )Interest expense
    
    
    (5,404
    )
    
    
    (2,629
    )
    
    
    (10,216
    )
    
    
    (5,434
    )Other expense, net
    
    
    (5,699
    )
    
    
    (2,531
    )
    
    
    (10,513
    )
    
    
    (5,579
    )Income before income taxes
    
    
    10,324
    
    
    
    4,994
    
    
    
    20,355
    
    
    
    17,435Income taxes
    
    
    3,977
    
    
    
    1,802
    
    
    
    7,678
    
    
    
    6,296Net income
    
    $
    6,347
    
    
    $
    3,192
    
    
    $
    12,677
    
    
    $
    11,139Basic earnings per share:Basic earnings per share
    
    $
    0.11
    
    
    $
    0.06
    
    
    $
    0.23
    
    
    $
    0.20Basic weighted average shares outstanding
    
    
    55,674
    
    
    
    55,255
    
    
    
    55,561
    
    
    
    54,564Diluted earnings per share:Diluted earnings per share
    
    $
    0.11
    
    
    $
    0.06
    
    
    $
    0.23
    
    
    $
    0.20Diluted weighted average shares outstanding
    
    
    55,889
    
    
    
    55,617
    
    
    
    55,813
    
    
    
    55,111
 
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infoUSA INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 SIX MONTHS ENDEDJune 30,2007
    
    
    2006(UNAUDITED)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    12,677
    
    
    $
    11,139Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization of operating assets
    
    
    9,917
    
    
    
    6,532Amortization of intangible assets
    
    
    8,397
    
    
    
    9,232Amortization of deferred financing fees
    
    
    289
    
    
    
    266Deferred income taxes
    
    
    (8,223
    )
    
    
    (2,688
    )Non-cash stock compensation expense
    
    
    420
    
    
    
    633Non-cash 401(k) contribution in common stock
    
    
    1,533
    
    
    
    1,153Loss on sale of assets and marketable securities
    
    
    107
    
    
    
    Non-cash other charges
    
    
    362
    
    
    
    318Non-cash interest earned on notes from officers
    
    
    
    
    
    
    (8
    )Changes in assets and liabilities, net of effect of acquisitions:Trade accounts receivable
    
    
    10,549
    
    
    
    14,260List brokerage trade accounts receivable
    
    
    16,553
    
    
    
    12,334Prepaid expenses and other assets
    
    
    (3,737
    )
    
    
    1,667Deferred marketing costs
    
    
    (231
    )
    
    
    (860
    )Accounts payable
    
    
    (1,723
    )
    
    
    2,611List brokerage trade accounts payable
    
    
    (16,908
    )
    
    
    (12,194
    )Income taxes receivable and payable, net
    
    
    (3,123
    )
    
    
    (7,113
    )Accrued expenses and other liabilities
    
    
    4,180
    
    
    
    (2,702
    )Deferred revenue
    
    
    (7,818
    )
    
    
    (11,168
    )Net cash provided by operating activities
    
    
    23,221
    
    
    
    23,412CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds on sale of marketable securities
    
    
    498
    
    
    
    Purchases of marketable securities
    
    
    (54
    )
    
    
    Purchases of property and equipment
    
    
    (10,088
    )
    
    
    (5,140
    )Acquisitions of businesses, net of cash acquired
    
    
    (8,109
    )
    
    
    (5,988
    )Software development costs
    
    
    (2,801
    )
    
    
    (4,280
    )Net cash used in investing activities
    
    
    (20,554
    )
    
    
    (15,408
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of long-term debt
    
    
    (132,392
    )
    
    
    (144,058
    )Proceeds from long-term debt
    
    
    149,641
    
    
    
    138,000Deferred financing costs paid
    
    
    (1,144
    )
    
    
    (770
    )Dividends paid
    
    
    (19,425
    )
    
    
    (12,385
    )Proceeds from repayment of notes receivable from officers
    
    
    
    
    
    
    1Proceeds from termination of derivative financial instruments
    
    
    704
    
    
    
    Tax benefit related to employee stock options
    
    
    8
    
    
    
    2,120Proceeds from exercise of stock options
    
    
    119
    
    
    
    11,965Net cash used in financing activities
    
    
    (2,489
    )
    
    
    (5,127
    )Effect of exchange rate fluctuations on cash
    
    
    (70
    )
    
    
    (70
    )Effect of SAB 108 adjustment on cash
    
    
    
    
    
    
    (2,089
    )Net increase in cash and cash equivalents
    
    
    108
    
    
    
    718Cash and cash equivalents, beginning
    
    
    4,433
    
    
    
    792Cash and cash equivalents, ending
    
    $
    4,541
    
    
    $
    1,510Supplemental cash flow information:Interest paid
    
    $
    8,938
    
    
    $
    5,193Income taxes paid
    
    $
    11,809
    
    
    $
    13,851
  5




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infoUSA INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. GENERAL
  info
 Reclassification.
 2. EARNINGS PER SHARE INFORMATION
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)2007
    
    
    2006
    
    
    2007
    
    
    2006Weighted average number of shares used in basic EPS
    
    
    55,674
    
    
    
    55,255
    
    
    
    55,561
    
    
    
    54,564Net additional common stock equivalent shares outstanding after
assumed exercise of stock options
    
    
    215
    
    
    
    362
    
    
    
    252
    
    
    
    547Weighted average number of shares outstanding used in diluted
EPS
    
    
    55,889
    
    
    
    55,617
    
    
    
    55,813
    
    
    
    55,111
 3. SEGMENT INFORMATION
   info
     6




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For the Three Months Ended June 30, 2007Data
    
    Services
    
    
    
    
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Research Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    77,920
    
    
    $
    32,101
    
    
    $
    50,054
    
    
    $
    
    
    
    $
    160,075Operating income (loss)
    
    
    17,539
    
    
    
    6,948
    
    
    
    2,587
    
    
    
    (11,051
    )
    
    
    16,023Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    32Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,404
    )
    
    
    (5,404
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (327
    )
    
    
    (327
    )Income (loss) before income taxes
    
    
    17,539
    
    
    
    6,948
    
    
    
    2,587
    
    
    
    (16,750
    )
    
    
    10,324Goodwill
    
    
    262,301
    
    
    
    65,448
    
    
    
    61,565
    
    
    
    
    
    
    
    389,314
 For the Three Months Ended June 30, 2006Data
    
    Services
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    72,774
    
    
    $
    27,532
    
    
    $
    
    
    
    $
    100,306Operating income (loss)
    
    
    11,176
    
    
    
    5,452
    
    
    
    (9,103
    )
    
    
    7,525Investment income
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    100Interest expense
    
    
    
    
    
    
    
    
    
    
    (2,629
    )
    
    
    (2,629
    )Other expense
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Income (loss) before income taxes
    
    
    11,176
    
    
    
    5,452
    
    
    
    (11,634
    )
    
    
    4,994Goodwill
    
    
    254,964
    
    
    
    63,124
    
    
    
    
    
    
    
    318,088
 For the Six months Ended June 30, 2007Data
    
    Services
    
    
    
    
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Research Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    156,267
    
    
    $
    63,526
    
    
    $
    98,164
    
    
    $
    
    
    
    $
    317,957Operating income (loss)
    
    
    32,064
    
    
    
    13,811
    
    
    
    4,256
    
    
    
    (19,263
    )
    
    
    30,868Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    54Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,216
    )
    
    
    (10,216
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (351
    )
    
    
    (351
    )Income (loss) before income taxes
    
    
    32,064
    
    
    
    13,811
    
    
    
    4,256
    
    
    
    (29,776
    )
    
    
    20,355Goodwill
    
    
    262,301
    
    
    
    65,448
    
    
    
    61,565
    
    
    
    
    
    
    
    389,314
 For the Six Months Ended June 30, 2006Data
    
    Services
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    149,261
    
    
    $
    54,115
    
    
    $
    
    
    
    $
    203,376Operating income (loss)
    
    
    26,354
    
    
    
    11,266
    
    
    
    (14,606
    )
    
    
    23,014Investment income
    
    
    
    
    
    
    
    
    
    
    172
    
    
    
    172Interest expense
    
    
    
    
    
    
    
    
    
    
    (5,434
    )
    
    
    (5,434
    )Other expense
    
    
    
    
    
    
    
    
    
    
    (317
    )
    
    
    (317
    )Income (loss) before income taxes
    
    
    26,354
    
    
    
    11,266
    
    
    
    (20,185
    )
    
    
    17,435Goodwill
    
    
    254,964
    
    
    
    63,124
    
    
    
    
    
    
    
    318,088
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4. COMPREHENSIVE INCOME
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)
    
    
    (In thousands)Net income
    
    $
    6,347
    
    
    $
    3,192
    
    
    $
    12,677
    
    
    $
    11,139Other comprehensive income (loss):Unrealized gain (loss) from investments:Unrealized gains (losses)
    
    
    128
    
    
    
    (117
    )
    
    
    (484
    )
    
    
    38Related tax benefit (expense)
    
    
    (46
    )
    
    
    42
    
    
    
    174
    
    
    
    (14
    )Net
    
    
    82
    
    
    
    (75
    )
    
    
    (310
    )
    
    
    24Foreign currency translation adjustments:Unrealized gains (losses)
    
    
    (70
    )
    
    
    (366
    )
    
    
    10
    
    
    
    352Related tax expense (benefit)
    
    
    25
    
    
    
    132
    
    
    
    (4
    )
    
    
    (127
    )Net
    
    
    (45
    )
    
    
    (234
    )
    
    
    6
    
    
    
    225Unrealized gain from pension plan:Unrealized gains
    
    
    20
    
    
    
    
    
    
    
    42
    
    
    
    Related tax expense
    
    
    (7
    )
    
    
    
    
    
    
    (15
    )
    
    
    Net
    
    
    13
    
    
    
    
    
    
    
    27
    
    
    
    Unrealized gain from derivative financial instruments:Unrealized gains
    
    
    834
    
    
    
    
    
    
    
    1,033
    
    
    
    Related tax expense
    
    
    (300
    )
    
    
    
    
    
    
    (372
    )
    
    
    Net
    
    
    534
    
    
    
    
    
    
    
    661
    
    
    
    Total other comprehensive income (loss)
    
    
    584
    
    
    
    (309
    )
    
    
    384
    
    
    
    249Comprehensive income
    
    $
    6,931
    
    
    $
    2,883
    
    
    $
    13,061
    
    
    $
    11,388
  Foreign
    
    
    
    
    
    
    
    
    
    
    AccumulatedUnrealized
    
    
    Currency
    
    
    Unrealized
    
    
    Derivative
    
    
    OtherLosses from
    
    
    Translation
    
    
    Gains (Losses)
    
    
    Financial
    
    
    ComprehensivePension plan
    
    
    Adjustments
    
    
    From Investments
    
    
    Instruments
    
    
    Loss(In thousands)Balance at June 30, 2007
    
    $
    (867
    )
    
    $
    (582
    )
    
    $
    (142
    )
    
    $
    661
    
    
    $
    (930
    )Balance at December 31, 2006
    
    $
    (894
    )
    
    $
    (588
    )
    
    $
    168
    
    
    $
    
    
    
    $
    (1,314
    )
 5. ACQUISITIONS
     8




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##### Table of Contents



For the Three Months Ended
    
    For the Six Months EndedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(In thousands, except per share amounts)(unaudited)Net sales
    
    $
    165,271
    
    
    $
    159,495
    
    
    $
    328,219
    
    
    $
    319,554Net income
    
    $
    6,755
    
    
    $
    3,885
    
    
    $
    13,358
    
    
    $
    12,650Basic earnings per share
    
    $
    0.12
    
    
    $
    0.07
    
    
    $
    0.24
    
    
    $
    0.23Diluted earnings per share
    
    $
    0.12
    
    
    $
    0.07
    
    
    $
    0.24
    
    
    $
    0.23
 6. SHAREBASED PAYMENT ARRANGEMENTS
  Share-Based Payment
   9




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Weighted
    
    
    
    
    
    WeightedAverage
    
    Weighted
    
    Average
    
    AggregateNumber of
    
    Average
    
    Remaining
    
    Intrinsic Value atOptions
    
    Exercise
    
    Contractual
    
    June 30, 2007Shares
    
    Price
    
    Term
    
    (In thousands)Outstanding beginning of period
    
    
    2,313,711
    
    
    $
    9.67Granted
    
    
    
    
    
    
    Exercised
    
    
    (19,893
    )
    
    
    6.00Forfeited
    
    
    
    
    
    
    Expired
    
    
    (850,000
    )
    
    
    9.77Outstanding end of period
    
    
    1,443,818
    
    
    
    9.67
    
    
    
    3.45
    
    
    $
    13,959Options exercisable at end of period
    
    
    908,274
    
    
    
    7.99
    
    
    
    1.09
    
    
    $
    7,257
  7. RESTRUCTURING CHARGES
 info info
  info
 Recognition of Liabilities in Connection with a Purchase Business Combination
  10




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##### Table of Contents



AmountsBeginning
    
    
    Amounts
    
    
    From
    
    
    Amounts
    
    
    EndingAccrual
    
    
    Expensed
    
    
    Acquisitions
    
    
    Paid
    
    
    Accrual(In thousands)Data Group:Employee Separation Costs
    
    $
    1,286
    
    
    $
    3,581
    
    
    $
    5
    
    
    $
    1,844
    
    
    $
    3,028Other Associated Costs
    
    $
    
    
    
    $
    1,508
    
    
    $
    
    
    
    $
    1,437
    
    
    $
    71Contract Termination Costs
    
    $
    
    
    
    $
    85
    
    
    $
    
    
    
    $
    85
    
    
    $
    Research Group:Employee Separation Costs
    
    $
    
    
    
    $
    
    
    
    $
    1,279
    
    
    $
    766
    
    
    $
    513Contract Termination Costs
    
    $
    
    
    
    $
    
    
    
    $
    1,252
    
    
    $
    90
    
    
    $
    1,162
 8. GOODWILL AND INTANGIBLE ASSETS
  June 30,
    
    
    December 31,2007
    
    
    2006(In thousands)Goodwill
    
    $
    448,873
    
    
    $
    441,308Less accumulated amortization
    
    
    59,559
    
    
    
    59,559$
    389,314
    
    
    $
    381,749Other intangible assets:Non-compete agreements
    
    $
    13,537
    
    
    $
    13,537Core technology
    
    
    15,420
    
    
    
    15,072Customer base
    
    
    79,143
    
    
    
    77,270Trade names
    
    
    33,046
    
    
    
    32,448Purchased data processing software
    
    
    73,478
    
    
    
    73,478Acquired database costs
    
    
    21,591
    
    
    
    21,591Perpetual software license agreement, net
    
    
    133
    
    
    
    533Software development costs, net
    
    
    10,856
    
    
    
    9,894Database development costs, net
    
    
    2,835
    
    
    
    3,244Deferred financing costs
    
    
    13,176
    
    
    
    12,032263,215
    
    
    
    259,099Less accumulated amortization
    
    
    159,740
    
    
    
    151,053$
    103,475
    
    
    $
    108,046
 9. PROPERTY AND EQUIPMENT
  June 30,
    
    
    December 31,2007
    
    
    2006(In thousands)Property and equipment
    
    $
    188,332
    
    
    $
    174,554Less accumulated depreciation
    
    
    120,713
    
    
    
    113,382$
    67,619
    
    
    $
    61,172
 10. INCOME TAXES
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 Accounting for Income Taxes
 11




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##### Table of Contents



11. CONTINGENCIES
     12




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##### Table of Contents



12. RELATED PARTY TRANSACTIONS
  13. DEBT
     14. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   Accounting for Derivative Instruments and Certain Hedging Activities
  13




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##### Table of Contents



15. SUBSEQUENT EVENTS
   14




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##### Table of Contents



General
 Overview
   
    
    Continuing to migrate to subscription-based from one-time use customers of our
Internet-based services Salesgenie.com, Salesgenie.com/Lite, SalesLeadsUSA.info, Credit.net,
PolkCityDirectories.com and infoUSACiti.com. Key to this is our effort to replace revenue
from declining traditional direct marketing products and services with our on-line internet
subscription services. Subscription services offer enhanced annual revenue per customer,
assure greater multi-year revenue retention, and, most importantly, provide greater value to
our customers by providing Internet access to our content and customer acquisition and
retention software tools.
    
    Continuing improvements of the content and accuracy of our database. Adding more
content, such as detailed business descriptions, more executives, hours of operation, credit
cards accepted, UCC filings, URL address and other information.
    
    Expanding international business and executive databases by adding content for China and Australia.
    
    Expanding Yesmails presence, which is our e-mail technology Company, by opening a sales office in London.
    
    Increasing investments in merchandising, advertising and branding. The advertising
campaigns include email, print, television, radio, direct mail, and search word advertising,
as well as the use of white glove client services. Most notable advertisements included
three commercials that aired during the Super Bowl, on February 4, 2007, featuring
Salesgenie.com.
    
    Continuing the integration efforts of Opinion Research Corporation, acquired December
4, 2006, by facilitating a strategic cross-selling plan.
    
    Completion of the acquisition of expresscopy.com, a national market leader in
short-run customized direct mail pieces such as direct response post cards, mailers,
brochures, newsletters, flyers and business cards.
    
    Announcing the pending acquisition of Guideline, expected to close in the third quarter
of 2007, and NWC Research which closed in July 2007. Both companies will expand our
presence in the market research industry, both in the United States and in key markets
around the world.
  15




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##### Table of Contents



Sales & Marketing Strategy
 Salesgenie.com. Salesgenie.ca
  Growth Strategy
     16




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RESULTS OF OPERATIONS
  CONSOLIDATED STATEMENT OF OPERATIONS DATA:
 THREE
    
    THREE
    
    SIX
    
    SIXMONTHS
    
    MONTHS
    
    MONTHS
    
    MONTHSENDED
    
    ENDED
    
    ENDED
    
    ENDEDJune 30, 2007
    
    June 30, 2006
    
    June 30, 2007
    
    June 30, 2006Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Cost of goods and services
    
    
    41
    
    
    
    26
    
    
    
    40
    
    
    
    26Selling, general and administrative
    
    
    43
    
    
    
    58
    
    
    
    45
    
    
    
    55Depreciation
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3Amortization
    
    
    3
    
    
    
    5
    
    
    
    3
    
    
    
    5Total costs and expenses
    
    
    90
    
    
    
    92
    
    
    
    91
    
    
    
    89Operating income
    
    
    10
    
    
    
    8
    
    
    
    9
    
    
    
    11Other expense, net
    
    
    (4
    )
    
    
    (3
    )
    
    
    (3
    )
    
    
    (3
    )Income before income taxes
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    8Income taxes
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    3Net income
    
    
    4
    %
    
    
    3
    %
    
    
    4
    %
    
    
    5
    %
 OTHER DATA
 THREE MONTHS
    
    
    THREE MONTHS
    
    
    SIX MONTHS
    
    
    SIX MONTHSENDED
    
    
    ENDED
    
    
    ENDED
    
    
    ENDEDJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006(dollars in thousands)SALES BY SEGMENT:Data Group
    
    $
    77,920
    
    
    $
    72,774
    
    
    $
    156,267
    
    
    $
    149,261Services Group
    
    
    32,101
    
    
    
    27,532
    
    
    
    63,526
    
    
    
    54,115Marketing Research Group
    
    
    50,054
    
    
    
    
    
    
    
    98,164
    
    
    
    Total
    
    $
    160,075
    
    
    $
    100,306
    
    
    $
    317,957
    
    
    $
    203,376SALES BY SEGMENT AS A PERCENTAGE OF NET
SALES:Data Group
    
    
    49
    %
    
    
    73
    %
    
    
    49
    %
    
    
    73
    %Services Group
    
    
    20
    
    
    
    27
    
    
    
    20
    
    
    
    27Marketing Research Group
    
    
    31
    
    
    
    
    
    
    
    31
    
    
    
    Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Net sales
    17




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##### Table of Contents



Cost of goods and services
      Selling, general and administrative expenses
  info info
  18




---



##### Table of Contents



Depreciation expense
      Amortization expense
    19




---



##### Table of Contents



Operating income
      Other expense, net
  Income taxes
  Liquidity and Capital Resources
 Overview
  20




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##### Table of Contents



Selected Consolidated Statements of Cash Flows Information
   21




---



##### Table of Contents



Selected Consolidated Balance Sheet Information
        info
     Off-Balance Sheet Arrangements
  22




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##### Table of Contents



Accounting Standards
 Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109 Accounting for Income Taxes
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 Inflation
  23




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##### Table of Contents



(a) Evaluation of disclosure controls and procedures
  (b) Changes in internal control over financial reporting
  24




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25




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##### Table of Contents



1.
    
    The stockholders elected the following persons to serve as directors of the Company for a
term of three years, expiring in 2010:
 Bill L. Fairfield
    
    FOR: 32,559,007
    
    WITHHELD: 20,256,770Anshoo S. Gupta
    
    FOR: 32,555,341
    
    WITHHELD: 20,260,436Elliot S. Kaplan
    
    FOR: 30,771,557
    
    WITHHELD: 22,044,220
 2.
    
    The stockholders voted on the approval of the infoUSA 2007 Omnibus Incentive Plan. The plan
was approved. The voting was as follows:
 FOR: 30,170,331
    
    AGAINST: 20,329,126
    
    ABSTAIN: 19,724
    
    BROKER NON-VOTE 2,296,596
 3.
    
    The stockholders also ratified the appointment of KPMG LLP, independent certified public
accountants, as auditors of the Company. The voting was as follows:
 FOR: 48,207,426
    
    AGAINST: 4,533,561
    
    ABSTAIN: 74,790
    
    BROKER NON-VOTE 0
 26




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##### Table of Contents



2.1
    
    
    
    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
    
    
    
    Bylaws, incorporated herein by reference to our Registration Statement on Form S-1 (File No.
33-42887), which became effective February 18, 1992.3.3
    
    
    
    Amended and Restated Certificate of Designation of Participating Preferred Stock, filed in
Delaware on October 22, 1999, incorporated herein by reference to exhibits filed with our
Registration Statement on Form 8-A, as amended, filed March 20, 2000.4.1
    
    
    
    Preferred Share Rights Agreement, incorporated herein by reference to our Registration Statement
on Form 8-A, as amended, filed March 20, 2000.4.2
    
    
    
    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, 2000.10.1
    
    
    
    Second Amendment to Second Amended and Restated Credit Agreement, dated as of May
16, 2007, by and among infoUSA Inc., the financial institutions a party thereto in the capacity of
a Lender, LaSalle Bank National Association and Citibank, N.A. (f/k/a Citibank, F.S.B.), as
syndication agents, Bank of America, N.A., as documentation agent, and Wells Fargo Bank, National
Association, as sole lead arranger, sole book runner and administrative agent, incorporated herein
by reference to Exhibit 10.1 filed with our Current Report on Form 8-K, filed May 30, 2007.10.2
    
    
    
    Deed of Trust and Security Agreement, dated as of May 23, 2007, by Ralston Building LLC to
Commonwealth Land Title Insurance Company, as trustee, for the benefit of Suburban Capital Markets,
Inc., incorporated herein by reference to Exhibit 10.2 filed with our Current Report on Form 8-K,
filed May 30, 2007.10.3
    
    
    
    Deed of Trust and Security Agreement, dated as of May 23, 2007, by Papillion Building LLC to
Commonwealth Land Title Insurance Company, as trustee, for the benefit of Suburban Capital Markets,
Inc., incorporated herein by reference to Exhibit 10.3 filed with our Current Report on Form 8-K,
filed May 30, 2007.10.4
    
    
    
    Fixed Rate Note of Ralston Building LLC to the order of Suburban Capital Markets, Inc., dated
May 23, 2007, incorporated herein by reference to Exhibit 10.4 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.5
    
    
    
    Fixed Rate Note of Papillion Building LLC to the order of Suburban Capital Markets, Inc., dated
May 23, 2007, incorporated herein by reference to Exhibit 10.5 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.6
    
    
    
    Guaranty, dated May 23, 2007, by infoUSA Inc. for the benefit of Suburban Capital Markets,
Inc., with respect to Ralston Building LLC, incorporated herein by reference to Exhibit 10.6 filed
with our Current Report on Form 8-K, filed May 30, 2007.10.7
    
    
    
    Guaranty, dated May 23, 2007, by infoUSA Inc. for the benefit of Suburban Capital Markets,
Inc., with respect to Papillion Building LLC, incorporated herein by reference to Exhibit 10.7
filed with our Current Report on Form 8-K, filed May 30, 2007.10.8
    
    
    
    Net Lease, dated May 23, 2007, by and between Ralston Building LLC, as lessor, and infoUSA
Inc., as lessee, incorporated herein by reference to Exhibit 10.8 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.9
    
    
    
    Net Lease, dated May 23, 2007, by and between Papillion Building LLC, as lessor, and infoUSA
Inc., as lessee, incorporated herein by reference to Exhibit 10.9 filed with our Current Report on
Form 8-K, filed May 30, 2007.31.1*
    
    
    
    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 27




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##### Table of Contents



SIGNATURE
  infoUSA Inc.Date: August 9, 2007
    /s/ Stormy L. DeanStormy L. Dean, Chief Financial Officer 28




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##### Table of Contents



INDEX TO EXHIBITS
 2.1
    
    
    
    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
    
    
    
    Bylaws, incorporated herein by reference to our Registration Statement on Form S-1 (File No.
33-42887), which became effective February 18, 1992.3.3
    
    
    
    Amended and Restated Certificate of Designation of Participating Preferred Stock, filed in
Delaware on October 22, 1999, incorporated herein by reference to exhibits filed with our
Registration Statement on Form 8-A, as amended, filed March 20, 2000.4.1
    
    
    
    Preferred Share Rights Agreement, incorporated herein by reference to our Registration Statement
on Form 8-A, as amended, filed March 20, 2000.4.2
    
    
    
    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, 2000.10.1
    
    
    
    Second Amendment to Second Amended and Restated Credit Agreement, dated as of May
16, 2007, by and among infoUSA Inc., the financial institutions a party thereto in the capacity of
a Lender, LaSalle Bank National Association and Citibank, N.A. (f/k/a Citibank, F.S.B.), as
syndication agents, Bank of America, N.A., as documentation agent, and Wells Fargo Bank, National
Association, as sole lead arranger, sole book runner and administrative agent, incorporated herein
by reference to Exhibit 10.1 filed with our Current Report on Form 8-K, filed May 30, 2007.10.2
    
    
    
    Deed of Trust and Security Agreement, dated as of May 23, 2007, by Ralston Building LLC to
Commonwealth Land Title Insurance Company, as trustee, for the benefit of Suburban Capital Markets,
Inc., incorporated herein by reference to Exhibit 10.2 filed with our Current Report on Form 8-K,
filed May 30, 2007.10.3
    
    
    
    Deed of Trust and Security Agreement, dated as of May 23, 2007, by Papillion Building LLC to
Commonwealth Land Title Insurance Company, as trustee, for the benefit of Suburban Capital Markets,
Inc., incorporated herein by reference to Exhibit 10.3 filed with our Current Report on Form 8-K,
filed May 30, 2007.10.4
    
    
    
    Fixed Rate Note of Ralston Building LLC to the order of Suburban Capital Markets, Inc., dated
May 23, 2007, incorporated herein by reference to Exhibit 10.4 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.5
    
    
    
    Fixed Rate Note of Papillion Building LLC to the order of Suburban Capital Markets, Inc., dated
May 23, 2007, incorporated herein by reference to Exhibit 10.5 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.6
    
    
    
    Guaranty, dated May 23, 2007, by infoUSA Inc. for the benefit of Suburban Capital Markets,
Inc., with respect to Ralston Building LLC, incorporated herein by reference to Exhibit 10.6 filed
with our Current Report on Form 8-K, filed May 30, 2007.10.7
    
    
    
    Guaranty, dated May 23, 2007, by infoUSA Inc. for the benefit of Suburban Capital Markets,
Inc., with respect to Papillion Building LLC, incorporated herein by reference to Exhibit 10.7
filed with our Current Report on Form 8-K, filed May 30, 2007.10.8
    
    
    
    Net Lease, dated May 23, 2007, by and between Ralston Building LLC, as lessor, and infoUSA
Inc., as lessee, incorporated herein by reference to Exhibit 10.8 filed with our Current Report on
Form 8-K, filed May 30, 2007.10.9
    
    
    
    Net Lease, dated May 23, 2007, by and between Papillion Building LLC, as lessor, and infoUSA
Inc., as lessee, incorporated herein by reference to Exhibit 10.9 filed with our Current Report on
Form 8-K, filed May 30, 2007.31.1*
    
    
    
    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