##### 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, 2008
 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
 infoGROUP 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)
  N/A
   o þ
  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 StatementsConsolidated Balance Sheets as of June 30, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Operations for the Six Months Ended June 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007
    
    
    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 6. Exhibits
    
    
    26Signature
    
    
    28Index to Exhibits
    
    
    29Certification 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



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 info GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 June 30,
    
    
    December 31,2008
    
    
    2007(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    8,859
    
    
    $
    9,924Marketable securities
    
    
    3,029
    
    
    
    2,285Trade accounts receivable, net of allowances of $1,916 and $2,397, respectively
    
    
    63,864
    
    
    
    78,573List brokerage trade accounts receivable, net of allowances of $504 and $70,
respectively
    
    
    79,142
    
    
    
    68,369Unbilled services
    
    
    31,154
    
    
    
    25,114Deferred income taxes
    
    
    8,273
    
    
    
    4,041Prepaid expenses
    
    
    11,251
    
    
    
    9,425Deferred marketing costs
    
    
    2,214
    
    
    
    2,234Total current assets
    
    
    207,786
    
    
    
    199,965Property and equipment, net
    
    
    70,976
    
    
    
    67,950Goodwill
    
    
    420,981
    
    
    
    415,075Intangible assets, net
    
    
    118,344
    
    
    
    118,205Other assets
    
    
    10,974
    
    
    
    11,446$
    829,061
    
    
    $
    812,641LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    3,004
    
    
    $
    4,944Accounts payable
    
    
    33,843
    
    
    
    23,312List brokerage trade accounts payable
    
    
    70,117
    
    
    
    63,807Accrued payroll expenses
    
    
    34,957
    
    
    
    39,507Accrued expenses
    
    
    13,398
    
    
    
    22,158Income taxes payable
    
    
    573
    
    
    
    3,288Deferred revenue
    
    
    67,240
    
    
    
    71,922Total current liabilities
    
    
    223,132
    
    
    
    228,938Long-term debt, net of current portion
    
    
    313,882
    
    
    
    278,283Deferred income taxes
    
    
    25,387
    
    
    
    31,046Other liabilities
    
    
    6,106
    
    
    
    5,848Stockholders equity:Common stock, $.0025 par value. Authorized 295,000,000 shares; 56,763,289 shares
issued and outstanding at June 30, 2008 and 56,505,668 shares issued and
outstanding at December 31, 2007
    
    
    142
    
    
    
    141Paid-in capital
    
    
    139,061
    
    
    
    137,106Retained earnings
    
    
    121,056
    
    
    
    129,908Accumulated other comprehensive income
    
    
    295
    
    
    
    1,371Total stockholders equity
    
    
    260,554
    
    
    
    268,526$
    829,061
    
    
    $
    812,641
  3




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info GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDEDJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(UNAUDITED)
    
    
    (UNAUDITED)Net sales
    
    $
    187,226
    
    
    $
    160,075
    
    
    $
    378,335
    
    
    $
    317,957Costs and expenses:Cost of goods and services
    
    
    80,911
    
    
    
    64,852
    
    
    
    159,548
    
    
    
    127,180Selling, general and administrative
    
    
    85,194
    
    
    
    70,012
    
    
    
    172,796
    
    
    
    141,595Depreciation and amortization of operating assets
    
    
    5,961
    
    
    
    5,114
    
    
    
    11,908
    
    
    
    9,917Amortization of intangible assets
    
    
    4,471
    
    
    
    4,074
    
    
    
    8,840
    
    
    
    8,397Total operating costs and expenses
    
    
    176,537
    
    
    
    144,052
    
    
    
    353,092
    
    
    
    287,089Operating income
    
    
    10,689
    
    
    
    16,023
    
    
    
    25,243
    
    
    
    30,868Other expense, net:Investment income
    
    
    79
    
    
    
    32
    
    
    
    1,623
    
    
    
    54Other income (expense)
    
    
    13
    
    
    
    (327
    )
    
    
    80
    
    
    
    (351
    )Interest expense
    
    
    (3,784
    )
    
    
    (5,404
    )
    
    
    (9,304
    )
    
    
    (10,216
    )Other expense, net
    
    
    (3,692
    )
    
    
    (5,699
    )
    
    
    (7,601
    )
    
    
    (10,513
    )Income before income taxes
    
    
    6,997
    
    
    
    10,324
    
    
    
    17,642
    
    
    
    20,355Income taxes
    
    
    2,660
    
    
    
    3,977
    
    
    
    6,704
    
    
    
    7,678Net income
    
    $
    4,337
    
    
    $
    6,347
    
    
    $
    10,938
    
    
    $
    12,677Basic earnings per share:Basic earnings per share
    
    $
    0.08
    
    
    $
    0.11
    
    
    $
    0.19
    
    
    $
    0.23Basic weighted average shares outstanding
    
    
    56,798
    
    
    
    55,674
    
    
    
    56,632
    
    
    
    55,561Diluted earnings per share:Diluted earnings per share
    
    $
    0.08
    
    
    $
    0.11
    
    
    $
    0.19
    
    
    $
    0.23Diluted weighted average shares outstanding
    
    
    56,799
    
    
    
    55,889
    
    
    
    56,636
    
    
    
    55,813
  4




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info GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 SIX MONTHS ENDEDJune 30,2008
    
    
    2007(UNAUDITED)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    10,938
    
    
    $
    12,677Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of operating assets
    
    
    11,908
    
    
    
    9,917Amortization of intangible assets
    
    
    8,840
    
    
    
    8,397Amortization of deferred financing fees
    
    
    413
    
    
    
    289Deferred income taxes
    
    
    (5,164
    )
    
    
    (8,223
    )Non-cash stock compensation expense
    
    
    265
    
    
    
    420Non-cash 401(k) contribution in common stock
    
    
    1,509
    
    
    
    1,533(Gain) loss on sale of assets and marketable securities
    
    
    (1,467
    )
    
    
    107Non-cash other charges
    
    
    81
    
    
    
    362Changes in assets and liabilities, net of effect of acquisitions:Trade accounts receivable
    
    
    8,439
    
    
    
    10,549List brokerage trade accounts receivable
    
    
    25,380
    
    
    
    16,553Prepaid expenses and other assets
    
    
    (1,730
    )
    
    
    (3,737
    )Deferred marketing costs
    
    
    20
    
    
    
    (231
    )Accounts payable
    
    
    10,443
    
    
    
    (1,723
    )List brokerage trade accounts payable
    
    
    (26,215
    )
    
    
    (16,908
    )Income taxes receivable and payable, net
    
    
    (2,490
    )
    
    
    (3,123
    )Accrued expenses and other liabilities
    
    
    (15,787
    )
    
    
    4,180Deferred revenue
    
    
    (5,202
    )
    
    
    (7,818
    )Net cash provided by operating activities
    
    
    20,181
    
    
    
    23,221CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of marketable securities
    
    
    1,821
    
    
    
    498Purchases of marketable securities
    
    
    (3,255
    )
    
    
    (54
    )Proceeds from sale of property and equipment
    
    
    62
    
    
    
    Purchases of property and equipment
    
    
    (11,415
    )
    
    
    (10,088
    )Acquisitions of businesses, net of cash acquired
    
    
    (18,229
    )
    
    
    (8,109
    )Software development costs
    
    
    (3,132
    )
    
    
    (2,801
    )Net cash used in investing activities
    
    
    (34,147
    )
    
    
    (20,554
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of long-term debt
    
    
    (37,641
    )
    
    
    (132,392
    )Proceeds from long-term debt
    
    
    71,300
    
    
    
    149,641Deferred financing costs paid
    
    
    (1,283
    )
    
    
    (1,144
    )Dividends paid
    
    
    (19,793
    )
    
    
    (19,425
    )Proceeds from derivative financial instruments
    
    
    
    
    
    
    704Tax benefit related to employee stock options
    
    
    10
    
    
    
    8Proceeds from exercise of stock options
    
    
    170
    
    
    
    119Net cash provided by (used in) used in financing activities
    
    
    12,763
    
    
    
    (2,489
    )Effect of exchange rate fluctuations on cash
    
    
    138
    
    
    
    (70
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,065
    )
    
    
    108Cash and cash equivalents, beginning
    
    
    9,924
    
    
    
    4,433Cash and cash equivalents, ending
    
    $
    8,859
    
    
    $
    4,541Supplemental cash flow information:Interest paid
    
    $
    8,663
    
    
    $
    8,938Income taxes paid
    
    $
    14,543
    
    
    $
    11,809
  5




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info GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. GENERAL
  info
 2. EARNINGS PER SHARE INFORMATION
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)2008
    
    
    2007
    
    
    2008
    
    
    2007Weighted average number of shares used in basic EPS
    
    
    56,798
    
    
    
    55,674
    
    
    
    56,632
    
    
    
    55,561Net additional common stock equivalent shares outstanding
after assumed exercise of stock options
    
    
    1
    
    
    
    215
    
    
    
    4
    
    
    
    252Weighted average number of shares outstanding used in
diluted EPS
    
    
    56,799
    
    
    
    55,889
    
    
    
    56,636
    
    
    
    55,813
 3. SEGMENT INFORMATION
  info
     6




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For the Three Months Ended June 30, 2008Data
    
    Services
    
    Research
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    79,600
    
    
    $
    39,441
    
    
    $
    68,185
    
    
    $
    
    
    
    $
    187,226Operating income (loss)
    
    
    19,180
    
    
    
    6,361
    
    
    
    1,567
    
    
    
    (16,419
    )
    
    
    10,689Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    79Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,784
    )
    
    
    (3,784
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    13Income (loss) before income taxes
    
    
    19,180
    
    
    
    6,361
    
    
    
    1,567
    
    
    
    (20,111
    )
    
    
    6,997Goodwill
    
    
    256,614
    
    
    
    70,465
    
    
    
    93,902
    
    
    
    
    
    
    
    420,981For the Three Months Ended June 30, 2007Data
    
    Services
    
    Research
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    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
    )
    
    
    10,324For the Six months Ended June 30, 2008Data
    
    Services
    
    Research
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    163,015
    
    
    $
    79,877
    
    
    $
    135,443
    
    
    $
    
    
    
    $
    378,335Operating income (loss)
    
    
    36,953
    
    
    
    13,476
    
    
    
    5,145
    
    
    
    (30,331
    )
    
    
    25,243Investment income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,623
    
    
    
    1,623Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,304
    )
    
    
    (9,304
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    80Income (loss) before income taxes
    
    
    36,953
    
    
    
    13,476
    
    
    
    5,145
    
    
    
    (37,932
    )
    
    
    17,642Goodwill
    
    
    256,614
    
    
    
    70,465
    
    
    
    93,902
    
    
    
    
    
    
    
    420,981For the Six months Ended June 30, 2007Data
    
    Services
    
    Research
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    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
    )
    
    
    20,355
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##### Table of Contents



4. COMPREHENSIVE INCOME
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Net income
    
    $
    4,337
    
    
    $
    6,347
    
    
    $
    10,938
    
    
    $
    12,677Other comprehensive income (loss):Unrealized gain (loss) from investments:Unrealized gains (losses)
    
    
    (205
    )
    
    
    128
    
    
    
    (2,023
    )
    
    
    (484
    )Related tax benefit (expense)
    
    
    74
    
    
    
    (46
    )
    
    
    728
    
    
    
    174Net
    
    
    (131
    )
    
    
    82
    
    
    
    (1,295
    )
    
    
    (310
    )Foreign currency translation adjustments:Unrealized gains (losses)
    
    
    166
    
    
    
    (70
    )
    
    
    342
    
    
    
    10Related tax expense (benefit)
    
    
    (60
    )
    
    
    25
    
    
    
    (123
    )
    
    
    (4
    )Net
    
    
    106
    
    
    
    (45
    )
    
    
    219
    
    
    
    6Unrealized gain from pension plan:Unrealized gains
    
    
    14
    
    
    
    20
    
    
    
    27
    
    
    
    42Related tax expense
    
    
    (5
    )
    
    
    (7
    )
    
    
    (10
    )
    
    
    (15
    )Net
    
    
    9
    
    
    
    13
    
    
    
    17
    
    
    
    27Unrealized
gains (losses) from derivative financial instruments:Unrealized gains (losses)
    
    
    (13
    )
    
    
    834
    
    
    
    (27
    )
    
    
    1,033Related tax expense (benefit)
    
    
    5
    
    
    
    (300
    )
    
    
    10
    
    
    
    (372
    )Net
    
    
    (8
    )
    
    
    534
    
    
    
    (17
    )
    
    
    661Total other comprehensive income (loss)
    
    
    (24
    )
    
    
    584
    
    
    
    (1,076
    )
    
    
    384Comprehensive income
    
    $
    4,313
    
    
    $
    6,931
    
    
    $
    9,862
    
    
    $
    13,061
  Foreign
    
    
    
    
    
    
    
    
    
    
    AccumulatedUnrealized
    
    
    Currency
    
    
    Unrealized
    
    
    Derivative
    
    
    OtherLosses from
    
    
    Translation
    
    
    Gains
    
    
    Financial
    
    
    ComprehensivePension plan
    
    
    Adjustments
    
    
    From Investments
    
    
    Instruments
    
    
    Income(In thousands)Balance at June 30, 2008
    
    $
    (687
    )
    
    $
    689
    
    
    $
    (96
    )
    
    $
    389
    
    
    $
    295Balance at December 31, 2007
    
    $
    (704
    )
    
    $
    470
    
    
    $
    1,199
    
    
    $
    406
    
    
    $
    1,371
 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 30,2008
    
    2007
    
    2008
    
    2007(In thousands, except per share amounts)(unaudited)Net sales
    
    $
    187,226
    
    
    $
    187,126
    
    
    $
    378,335
    
    
    $
    373,616Net income
    
    $
    4,337
    
    
    $
    6,389
    
    
    $
    10,938
    
    
    $
    12,629Basic earnings per share
    
    $
    0.08
    
    
    $
    0.11
    
    
    $
    0.19
    
    
    $
    0.23Diluted earnings per share
    
    $
    0.08
    
    
    $
    0.11
    
    
    $
    0.19
    
    
    $
    0.23
 6. SHAREBASED PAYMENT ARRANGEMENTS
  9




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##### Table of Contents



Share-Based Payment
    Six-Months Ended June 30,2008
    
    2007Risk-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 grants for the six-months ended June 30, 2007.   Weighted Average
    
    Aggregate IntrinsicWeighted Average
    
    
    
    
    
    Remaining
    
    Value at June 30,Number of Options
    
    Weighted Average
    
    Contractual Term
    
    2008Shares
    
    Exercise Price
    
    (Year)
    
    (In thousands)Outstanding beginning of period
    
    
    683,818
    
    
    $
    11.37Granted
    
    
    50,000
    
    
    
    6.00Exercised
    
    
    (31,564
    )
    
    
    5.37Expired
    
    
    (24,024
    )
    
    
    5.59Outstanding end of period
    
    
    678,230
    
    
    
    11.46
    
    
    
    5.85
    
    
    $
    Options exercisable at end of period
    
    
    267,229
    
    
    
    10.85
    
    
    
    3.99
    
    
    $
    
  7. RESTRUCTURING CHARGES
  10




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##### Table of Contents



info info
  AmountsBeginning
    
    
    Amounts
    
    
    From
    
    
    Amounts
    
    
    EndingAccrual
    
    
    Expensed
    
    
    Acquisitions
    
    
    Paid
    
    
    Accrual(In thousands)Data Group:Employee separation costs
    
    $
    2,877
    
    
    $
    1,176
    
    
    $
    
    
    
    $
    3,071
    
    
    $
    982Other associated costs
    
    $
    26
    
    
    $
    
    
    
    $
    
    
    
    $
    26
    
    
    $
    Research Group:Employee separation costs
    
    $
    566
    
    
    $
    1,707
    
    
    $
    
    
    
    $
    608
    
    
    $
    1,665Contract termination costs
    
    $
    2,588
    
    
    $
    
    
    
    $
    (1,386
    )
    
    $
    1,145
    
    
    $
    57
 8. GOODWILL AND INTANGIBLE ASSETS
  June 30, 2008
    
    
    December 31, 2007(In thousands)Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Net
    
    
    Cost
    
    
    Amortization
    
    
    NetGoodwill
    
    $
    420,981
    
    
    $
    
    
    
    $
    420,981
    
    
    $
    415,075
    
    
    $
    
    
    
    $
    415,075Other intangible assets:Non-compete agreements
    
    
    17,119
    
    
    
    13,950
    
    
    
    3,169
    
    
    
    14,775
    
    
    
    13,600
    
    
    
    1,175Core technology
    
    
    16,142
    
    
    
    12,885
    
    
    
    3,257
    
    
    
    16,004
    
    
    
    11,716
    
    
    
    4,288Customer base
    
    
    100,156
    
    
    
    30,914
    
    
    
    69,242
    
    
    
    97,143
    
    
    
    25,173
    
    
    
    71,970Trade names
    
    
    39,103
    
    
    
    14,924
    
    
    
    24,179
    
    
    
    38,042
    
    
    
    13,390
    
    
    
    24,652Purchased 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
    
    
    26,747
    
    
    
    12,111
    
    
    
    14,636
    
    
    
    22,751
    
    
    
    9,622
    
    
    
    13,129Deferred financing costs
    
    
    14,488
    
    
    
    10,627
    
    
    
    3,861
    
    
    
    13,203
    
    
    
    10,212
    
    
    
    2,991Total intangibles
    
    $
    804,185
    
    
    $
    264,860
    
    
    $
    539,325
    
    
    $
    786,442
    
    
    $
    253,162
    
    
    $
    533,280
  11




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##### Table of Contents



9. PROPERTY AND EQUIPMENT
  June 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Property and equipment
    
    $
    208,110
    
    
    $
    196,042Less accumulated depreciation
    
    
    137,134
    
    
    
    128,092$
    70,976
    
    
    $
    67,950
 10. CONTINGENCIES
     12




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11. RELATED PARTY TRANSACTIONS
     12. DEBT
   13




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13. SUBSEQUENT EVENTS
    14




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  General
 Overview
 info info info
   
    
    Announcing the acquisition of Direct Media, Inc. which closed effective January 1,
2008. Direct Media, Inc., which became part of the Services Group, is a provider of list
brokerage, list management, analytics, database marketing and data processing services.
    
    Expanding our international business and executive databases by adding content for
China and Australia.
    
    Expanding the presence of Yesmail, our e-mail technology company, and making
advancements in technology and product development processes.
    
    Continuing to invest in merchandising, advertising and branding. The advertising
campaigns include e-mail, print, television, radio, direct mail, and search word
advertising, as well as the use of white glove client services. Most notable
advertisements included commercials that aired during the Super Bowl, on February 3, 2008,
featuring Salesgenie.com.
    
    Continuing to compile infoUK.coms UK Business Database, which will provide contact
names and addresses of businesses in the United Kingdom. We plan to sell information in
this database to small and large customers in the form of customized list products, online
access, subscription services, and license agreements to value-added resellers.
  Sales & Marketing Strategy
 Salesgenie.com.
  15




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##### Table of Contents



Growth Strategy
      16




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##### Table of Contents



RESULTS OF OPERATIONS
  CONSOLIDATED STATEMENT OF OPERATIONS DATA:
 Three Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJune 30, 2008
    
    June 30, 2007
    
    June 30, 2008
    
    June 30, 2007Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Cost of goods and services
    
    
    43
    
    
    
    41
    
    
    
    42
    
    
    
    40Selling, general and administrative
    
    
    46
    
    
    
    43
    
    
    
    46
    
    
    
    45Depreciation
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3Amortization
    
    
    2
    
    
    
    3
    
    
    
    2
    
    
    
    3Total costs and expenses
    
    
    94
    
    
    
    90
    
    
    
    93
    
    
    
    91Operating income
    
    
    6
    
    
    
    10
    
    
    
    7
    
    
    
    9Other expense, net
    
    
    (3
    )
    
    
    (4
    )
    
    
    (2
    )
    
    
    (3
    )Income before income taxes
    
    
    3
    
    
    
    6
    
    
    
    5
    
    
    
    6Income taxes
    
    
    1
    
    
    
    2
    
    
    
    2
    
    
    
    2Net income
    
    
    2
    %
    
    
    4
    %
    
    
    3
    %
    
    
    4
    %
 OTHER DATA
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30, 2008
    
    
    June 30, 2007
    
    
    June 30, 2008
    
    
    June 30, 2007(dollars in thousands)SALES BY SEGMENT:Data Group
    
    $
    79,600
    
    
    $
    77,920
    
    
    $
    163,015
    
    
    $
    156,267Services Group
    
    
    39,441
    
    
    
    32,101
    
    
    
    79,877
    
    
    
    63,526Marketing Research Group
    
    
    68,185
    
    
    
    50,054
    
    
    
    135,443
    
    
    
    98,164Total
    
    $
    187,226
    
    
    $
    160,075
    
    
    $
    378,335
    
    
    $
    317,957SALES BY SEGMENT AS A PERCENTAGE OF NET
SALES:Data Group
    
    
    43
    %
    
    
    49
    %
    
    
    43
    %
    
    
    49
    %Services Group
    
    
    21
    
    
    
    20
    
    
    
    21
    
    
    
    20Marketing Research Group
    
    
    36
    
    
    
    31
    
    
    
    36
    
    
    
    31Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Net sales
  info
 17




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##### Table of Contents



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




---



##### Table of Contents



info info
   .
  Depreciation expense
   19




---



##### Table of Contents



Amortization expense
     Operating income
    20




---



##### Table of Contents



Other expense, net
  Income taxes
  Liquidity and Capital Resources
 Overview
     21




---



##### Table of Contents



Selected Consolidated Statements of Cash Flows Information
 info
   Selected Consolidated Balance Sheet Information
    22




---



##### Table of Contents



info
     info
   Off-Balance Sheet Arrangements
  Accounting Standards
 Fair
Value Measurements
 23




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##### Table of Contents



The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Inflation
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 (a) Evaluation of disclosure controls and procedures
   24




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##### Table of Contents



(b) Changes in internal control over financial reporting
  
 PART II
 OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
   25




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##### Table of Contents



ITEM 6.
    
    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 October
22, 1999, incorporated herein by reference to exhibits filed
with our Registration Statement on Form 8-A, as amended, filed
March 20, 2000.3.3
    
    
    
    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 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, 2000.31.1*
    
    
    
    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.
 26




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##### Table of Contents



ExhibitNo.
    
    
    
    Description32.1*
    
    
    
    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
  infoGROUP Inc.Date: August 20, 2008
    /s/ Stormy L. DeanStormy L. DeanChief Financial Officer 28




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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 October
22, 1999, incorporated herein by reference to exhibits filed
with our Registration Statement on Form 8-A, as amended, filed
March 20, 2000.3.3
    
    
    
    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 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, 2000.31.1*
    
    
    
    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 29