<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


    X     Quarterly Report pursuant to Section 13 or 15(d) of the Securities
--------  Exchange Act of 1934


For the quarterly period ended March 31, 1999 or

          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.
--------------------------------------------------------------------------------
               (exact name of registrant specified in its charter)

          DELAWARE                                   47-0751545
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

 5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA              68127
(Address of principal executive offices)            (Zip Code)


Registrant's telephone number, including area code        (402) 593-4500
                                                     --------------------------

              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days.

                              Yes   X    No 
                                  -----    -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

            24,237,831 shares of Class A Common Stock and 23,916,919
                  shares of Class B Common Stock at May 4, 1999



<PAGE>   2




                                  infoUSA INC.

                                      INDEX

<TABLE>
<CAPTION>

                                                                                     PAGE NO.
                                                                                     --------
<S>                                                                                  <C>
PART I -  FINANCIAL INFORMATION                                                           3

          Item 1.  Consolidated Balance Sheets as of  March 31, 1999 and   
          December 31, 1998                                                               4

          Consolidated Statements of Operations for the three months       
          ended March 31, 1999 and 1998                                                   5

          Consolidated Statements of Cash Flows for the three months ended
          March 31, 1999 and 1998                                                         6

          Notes to Consolidated Financial Statements                                  7 - 8

          Item 2.  Management's Discussion and Analysis of Results of Operations     9 - 18

          Item 3.  Quantitative and Qualitative Disclosures about Market Risk            19

PART II - OTHER INFORMATION                                                              20

          Item 6. Exhibits and Reports on Form 8-K                                       21

          Signatures                                                                     22

          Index to Exhibits                                                              23
</TABLE>



                                       2

<PAGE>   3




                                  infoUSA INC.

                                    Form 10-Q

                                 For the Quarter
                              Ended March 31, 1999

                                     PART I

                     FINANCIAL INFORMATION AND MANAGEMENT'S
                 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS





                                       3

<PAGE>   4



                          infoUSA INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)



<TABLE>
<CAPTION>

                                     ASSETS

                                                                                    MARCH 31,       DECEMBER 31,
                                                                                      1999             1998
                                                                                   ------------    ------------

<S>                                                                                <C>             <C>         
Current assets:
  Cash and cash equivalents ....................................................   $     29,763    $     29,603
  Marketable securities ........................................................         23,177          20,620
  Trade accounts receivable, net of allowances of $5,177 and
     $7,289, respectively ......................................................         37,659          40,126
  List brokerage trade accounts receivable .....................................         12,921          17,831
  Income taxes receivable ......................................................             --           3,387
  Prepaid expenses .............................................................          3,061           2,371
  Deferred marketing costs .....................................................          4,166           4,365
                                                                                   ------------    ------------
          Total current assets .................................................        110,747         118,303
                                                                                   ------------    ------------
Property and equipment, net ....................................................         41,713          40,264
Intangible assets, net of accumulated amortization .............................        103,693         109,378
Other assets ...................................................................          4,343           2,828
                                                                                   ------------    ------------
                                                                                   $    260,496    $    270,773
                                                                                   ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt ............................................   $      2,318    $      1,580
  Accounts payable .............................................................          7,476           7,226
  List brokerage trade accounts payable ........................................         15,160          18,847
  Accrued payroll expenses .....................................................          3,180           2,830
  Accrued expenses .............................................................          7,707          12,465
  Income taxes payable .........................................................            265              --
  Deferred revenue .............................................................          4,279           4,534
  Deferred income taxes ........................................................          5,614             664
                                                                                   ------------    ------------
          Total current liabilities ............................................         45,999          48,146
                                                                                   ------------    ------------
Long-term debt, net of current portion .........................................        118,853         126,679
Deferred income taxes ..........................................................          5,209           7,701
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $.0025 par value. Authorized 5,000,000 shares;
     none issued or outstanding ................................................             --              --
Class A common stock, $.0025 par value. Authorized 220,000,000
     shares; 24,689,831 shares issued and 24,228,831 shares outstanding at
     March 31, 1999 and 24,689,761 shares issued and 24,581,261 shares
     outstanding at December 31, 1998 ..........................................             62              62
Class B common stock, $.0025 par value. Authorized 75,000,000
   shares; 24,854,919 shares issued and 23,907,919 shares
   outstanding at March 31, 1999 and 24,854,989 shares issued
   and 24,655,489 shares outstanding at December 31, 1998 ......................             62              62
  Paid-in capital ..............................................................         72,476          72,476
  Retained earnings ............................................................         21,597          15,284
 Treasury stock, at cost, 461,000 shares of Class A common stock and
  947,000 shares of Class B common stock held at March 31, 1999, and
  108,500 shares of Class A common stock and 199,500 shares of Class B
  common stock held at December 31, 1998 .......................................         (9,504)         (2,951)
 Accumulated other comprehensive income ........................................          5,742           3,314
                                                                                   ------------    ------------
          Total stockholders' equity ...........................................         90,435          88,247
                                                                                   ------------    ------------
                                                                                   $    260,496    $    270,773
                                                                                   ============    ============
</TABLE>









               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                       4


<PAGE>   5


                                 infoUSA INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF OPERATIONS
                            (In thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                 FOR THE QUARTERS ENDED
                                                ------------------------
                                                  MARCH 31,    MARCH 31,
                                                   1999           1998
                                                ----------    ----------

<S>                                             <C>           <C>       
Net sales ...................................   $   55,520    $   55,380
Costs and expenses:
  Database and production costs .............       16,176        15,405
  Selling, general and administrative .......       22,336        23,394
  Depreciation and amortization .............        6,033         6,870
  Acquisition-related and restructuring
    charges .................................           --         8,477
                                                ----------    ----------
                                                    44,545        54,146
                                                ----------    ----------
Operating income ............................       10,975         1,234
Other income (expense):
  Investment income .........................        2,484           996
  Interest expense ..........................       (3,114)       (1,279)
                                                ----------    ----------
Income before income taxes and
  extraordinary item ........................       10,345           951
Income taxes ................................        4,160         2,058
                                                ----------    ----------
Income (loss) before extraordinary item .....        6,185        (1,107)
Extraordinary item, net of tax ..............          128            --
                                                ----------    ----------
Net income (loss) ...........................   $    6,313    $   (1,107)
                                                ==========    ==========



BASIC EARNINGS PER SHARE:

  Income (loss) before extraordinary item ...   $     0.13    $    (0.02)
  Extraordinary item ........................           --            --
                                                ----------    ----------
  Net income (loss) .........................   $     0.13    $    (0.02)
                                                ==========    ==========

  Weighted average shares outstanding .......       48,602        49,395
                                                ==========    ==========

DILUTED EARNINGS PER SHARE:

  Income (loss) before extraordinary item ...   $     0.13    $    (0.02)
  Extraordinary item.........................           --            --
                                                ----------    ----------
  Net income (loss) .........................   $     0.13    $    (0.02)
                                                ==========    ==========

  Weighted average shares outstanding .......       48,662        49,395
                                                ==========    ==========
</TABLE>




               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                       5


<PAGE>   6

                          infoUSA INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>

                                                             FOR THE QUARTERS ENDED
                                                          ----------------------------
                                                            MARCH 31,        MARCH 31,
                                                              1999            1998
                                                          ------------    ------------

<S>                                                       <C>             <C>          
Cash flows from operating activities:
  Net income (loss) ...................................   $      6,313    $     (1,107)
  Adjustments to reconcile net income to net
    cash provided by operating activities:
     Depreciation and amortization ....................          6,033           6,870
     Deferred income taxes ............................            581          (2,096)
     Net realized gains on sale of
       marketable securities investments ..............         (2,025)           (985)
     Acquisition-related  and restructuring
       charges ........................................             --           8,477
     Changes in assets and liabilities, net of
       effect of acquisitions:
       Trade accounts receivable ......................          3,065             796
       List brokerage trade accounts receivable .......          4,910              --
       Prepaid expenses and other assets ..............         (1,446)            (57)
       Deferred marketing costs .......................            199            (610)
       Accounts payable ...............................            250            (399)
       List brokerage trade accounts payable ..........         (3,408)             --
       Income taxes receivable and payable ............          3,652           2,267
       Accrued expenses and other liabilities .........         (4,663)         (4,133)
                                                          ------------    ------------
          Net cash provided by operating
            activities ................................         13,461           9,023
                                                          ------------    ------------
Cash flows from investing activities:
  Proceeds from sales of marketable securities ........          8,587           1,166
  Purchases of marketable securities ..................         (4,153)           (786)
  Purchases of property and equipment .................           (700)         (2,966)
  Acquisitions of businesses ..........................             --         (18,368)
  Consumer database costs .............................             --            (698)
  Software development costs ..........................         (1,413)         (1,084)
                                                          ------------    ------------
          Net cash provided by (used in)
            investing activities ......................          2,321         (22,736)
                                                          ------------    ------------
Cash flows from financing activities:
  Repayment of long-term debt .........................           (550)         (2,167)
  Proceeds from long-term debt ........................             --          19,000
  Acquisitions of treasury stock ......................         (6,553)             --
  Repurchase of senior subordinated notes .............         (8,370)             --
  Proceeds from exercise of stock options .............             --             726
                                                          ------------    ------------
          Net cash provided by (used in) financing
            activities ................................        (15,473)         17,559
                                                          ------------    ------------
Effect of exchange rate fluctuations on cash ..........           (149)             --
                                                          ------------    ------------
Net increase in cash and cash
  equivalents .........................................            160           3,846
Cash and cash equivalents, beginning ..................         29,603          10,653
                                                          ------------    ------------
Cash and cash equivalents, ending .....................   $     29,763    $     14,499
                                                          ============    ============

Supplemental cash flow information:
  Interest paid .......................................   $        776    $      1,426
                                                          ============    ============

  Income taxes paid ...................................   $          7    $      1,794
                                                          ============    ============
</TABLE>





               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                       6


<PAGE>   7


                          infoUSA INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

The accompanying unaudited financial statements have been prepared on the same
basis as the audited consolidated financial statements and, in the opinion of
management, contain all adjustments, consisting of normal recurring adjustments
necessary to fairly present the financial information included therein.

The Company suggests that this financial data be read in conjunction with the
audited consolidated financial statements and notes thereto for the year ended
December 31, 1998 included in the Company's 1998 Annual Report on Form 10-K
filed with the Securities and Exchange Commission. Results for the interim
period presented are not necessarily indicative of results to be expected for
the entire year.

2. EARNINGS PER SHARE INFORMATION

    The following table shows the amounts used in computing earnings per share
and the effect on the weighted average number of shares of dilutive potential
common stock. Options on 1.3 million shares of common stock were not included in
computing diluted earnings per share for the first quarter of 1998 because their
effects were antidilutive.

<TABLE>
<CAPTION>

                                                     FOR THE QUARTERS ENDED
                                                     -----------------------
                                                      MARCH 31,    MARCH 31,
                                                        1999         1998
                                                     ----------   ----------
                                                          (In thousands)
<S>                                                  <C>          <C>   
Weighted average number of shares outstanding
   used in basic EPS .............................       48,602       49,395
Net additional common equivalent shares
   outstanding after assumed exercise of stock
   options .......................................           60           --
                                                     ----------   ----------
Weighted average number of shares outstanding
   used in diluted EPS ...........................       48,662       49,395
                                                     ==========   ==========
</TABLE>

3.  SEGMENT INFORMATION

    The Company currently manages existing operations utilizing financial
information accumulated and reported for two general business segments.

    The small business segment principally engages in the selling of sales lead
generation and consumer CD-ROM products to small to medium sized companies,
small office and home office businesses and individual consumers. This segment
includes the sale of content via the Internet.

    The large business segment principally engages in the selling of data
processing services, licensed databases, database marketing solutions and list
brokerage and list management services to large companies. This segment includes
the licensing of databases for Internet directory assistance services.

    Corporate activities principally represent the information systems
technology, database compilation, database verification, and administrative
functions of the Company. Investment income (loss), interest expense, income
taxes, amortization of intangibles, and depreciation expense are only recorded
in corporate activities. The Company does not allocate these costs to the two
business segments. The small business and large business segments reflect actual
net sales, direct order production, and identifiable direct sales and
marketing-related costs related to their operations. The Company records unusual
or non-recurring items including acquisition-related and restructuring charges
and provisions for litigation settlement in corporate activities to allow for
the analysis of the sales business segments excluding such unusual or
non-recurring charges.

    The Company accounts for property and equipment on a consolidated basis. The
majority of the Company's property and equipment is shared by the Company's
business segments. Depreciation expense is recorded in corporate activities.

    The Company has no intercompany sales or intercompany expense transactions.
Accordingly, there are no adjustments necessary to eliminate amounts between the
Company's segments.


                                       7

<PAGE>   8

    The following table summarizes segment information:

<TABLE>
<CAPTION>

                                                       FOR THE QUARTER ENDED MARCH 31, 1999
                                             ------------------------------------------------------
                                                Small         Large       Corporate     Consolidated
                                              Business      Business      Activities       Total
                                             -----------   -----------   -----------    -----------
                                                                 (In thousands)

<S>                                          <C>           <C>           <C>            <C>        
Net sales ................................   $    33,178   $    22,342   $        --    $    55,520
Operating income (loss) ..................        16,676        10,287       (15,988)        10,975
Investment income ........................            --            --         2,484          2,484
Interest expense .........................            --            --         3,114          3,114
Income (loss) before income taxes and
  extraordinary item .....................        16,676        10,287       (16,618)        10,345
</TABLE>

<TABLE>
<CAPTION>

                                                        FOR THE QUARTER ENDED MARCH 31, 1998
                                             ------------------------------------------------------
                                                 Small       Large        Corporate     Consolidated
                                               Business     Business      Activities       Total
                                             -----------   -----------   -----------    -----------
                                                                (In thousands)

<S>                                          <C>           <C>           <C>            <C>        
Net sales ................................   $    34,817   $    20,563   $        --    $    55,380
Acquisition-related and restructuring
  charges ................................            --            --         8,477          8,477
Operating income (loss) ..................        16,984         7,018       (22,768)         1,234
Investment income ........................            --            --           996            996
Interest expense .........................            --            --         1,279          1,279
Income (loss) before income taxes and
  extraordinary item .....................        16,984         7,018       (23,051)           951
</TABLE>


4.  COMPREHENSIVE INCOME

    Comprehensive income, including the components of other comprehensive
income, is as follows:

<TABLE>
<CAPTION>

                                                    FOR THE QUARTERS ENDED
                                                 ----------------------------
                                                   MARCH 31,       MARCH 31,
                                                     1999            1998
                                                 ------------    ------------
                                                         (In thousands)

<S>                                              <C>             <C>          
Net income (loss) ............................   $      6,313    $     (1,107)
Other comprehensive income (loss):
  Unrealized gain (loss) from investments:
    Unrealized gains .........................          3,733          16,082
    Related tax expense ......................         (1,799)         (6,111)
                                                 ------------    ------------
    Net ......................................          2,314           9,971
                                                 ------------    ------------

  Reclassification adjustment for net gains
    (losses) realized on sale of marketable
    securities:
    Unrealized gains (losses) ................          1,206             (60)
    Related tax expense ......................           (458)             23
                                                 ------------    ------------
    Net ......................................            748             (37)
                                                 ------------    ------------

  Foreign currency translation adjustments ...           (634)             --
                                                 ------------    ------------
Total other comprehensive income .............          2,428           9,934
                                                 ------------    ------------
Comprehensive income .........................   $      8,741    $      8,827
                                                 ============    ============
</TABLE>

   The components of accumulated other comprehensive income is as follows:

<TABLE>
<CAPTION>

                                              Foreign                      Accumulated
                                             Currency       Unrealized       Other
                                            Translation      Gains on    Comprehensive
                                            Adjustments     Securities       Income
                                           ------------    ------------   ------------
                                                          (In thousands)

<S>                                        <C>             <C>            <C>         
Balance at March 31, 1999 ..............   $       (634)   $      6,376   $      5,742
Balance at March 31, 1998 ..............   $         --    $      3,314   $      3,314
</TABLE>


5. CONTINGENCIES

    The Company and its subsidiaries are involved in legal proceedings, claims
and litigation arising in the ordinary course of business. Management believes
that any resulting liability should not materially affect the Company's
financial position, results of operations, or cash flows.




                                       8


<PAGE>   9


                                 infoUSA INC. AND SUBSIDIARIES
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                                   AND RESULTS OF OPERATIONS

GENERAL

The Company is a leading provider of business and consumer marketing information
and data processing services. The Company's products and services help its
clients generate new customers more effectively at lower cost. The Company's key
assets include a proprietary database of over 11 million businesses and a
consumer database of over 115 million households and 195 million individuals in
the United States and Canada, which the Company believes are among the most
comprehensive and accurate available. The Company leverages these key assets by
selling a broad range of marketing information products and data processing
services through targeted distribution channels primarily to small and medium
size businesses and also to consumers and large corporations.

This discussion and analysis contains forward-looking statements, including
without limitations statements in the discussion of net sales, database and
production costs and liquidity and capital resources, within the meaning of
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, which are subject to the "safe harbor" created by those
sections. The Company's actual future results could differ materially from those
projected in the forward-looking statements. Some factors which could cause
future actual results to differ materially from the company's recent results or
those projected in the forward-looking statements are described in "Factors
Affecting Operating Results" below. The Company assumes no obligation to update
the forward-looking statement or such factors.

RESULTS OF OPERATIONS

    The Company had previously made certain disclosures relative to the
continuing results of operations of acquired companies where appropriate and
possible, although the Company has in the case of all acquisitions since 1996,
immediately integrated the operations of the acquired companies into existing
operations of the Company. Generally, the results of operations for these
acquired activities are no longer separately accounted for from existing
activities. The Company cannot report on the results of operations of acquired
companies upon completion of the integration as the results are "blended-in"
with existing results. Additionally, upon integration of acquired operations,
the Company frequently combines acquired products or features with existing
products, and experiences significant cross-selling of products between business
units, including sales of acquired products by existing business units and sales
by acquired business units of existing products. Due to recent and potential
future acquisitions, future results of operations will not be comparable to
historical data. While the results cannot be accurately quantified, acquisitions
have had a significant impact on net sales.



                                       9


<PAGE>   10




    The following table sets forth, for the periods indicated, certain items
from the Company's statement of operations data expressed as a percentage of net
sales. The amounts and related percentages may not be fully comparable due to
the acquisition of Digital Directory Assistance (DDA) in August 1996, County
Data Corporation (CDC) and Marketing Data Systems in November 1996, BJ Hunter in
December 1996, the Database America Companies (DBA) in February 1997, Pro CD in
August 1997, Walter Karl in March 1998 and JAMI Marketing Services (JAMI) in
June 1998:

<TABLE>
<CAPTION>

                                                                        FOR THE QUARTERS ENDED
                                                                       -------------------------
                                                                               MARCH 31,
                                                                       -------------------------
          CONSOLIDATED STATEMENT OF OPERATIONS DATA:
                                                                           1999           1998
                                                                       ----------     ----------

<S>                                                                     <C>            <C> 
Net sales ..........................................................          100%           100%
Costs and expenses:
  Database and production costs ....................................           29             28
  Selling, general and administrative ..............................           40             42
  Depreciation and amortization ....................................           11             12
  Acquisition-related and restructuring charges ....................           --             15
                                                                       ----------     ----------
     Total costs and expenses ......................................           80             98
                                                                       ----------     ----------
Operating income ...................................................           20              2
Other income (expense), net ........................................           (1)            (1)
                                                                       ----------     ----------
Income before income taxes and extraordinary item ..................           19              2
Income taxes .......................................................            8              4
                                                                       ----------     ----------
Income (loss) before extraordinary item ............................           11             (2)
Extraordinary item, net of tax .....................................           --             --
                                                                       ----------     ----------
Net income (loss) ..................................................           11%            (2)%
                                                                       ==========     ==========

OTHER DATA:

     SALES BY SEGMENT :

       Small business and consumer group ...........................                          
                                                                       $     33.2     $     34.8
       Large business group ........................................         22.3           20.6
                                                                       ----------     ----------
       Total .......................................................   $     55.5     $     55.4
                                                                       ==========     ==========

     SALES BY SEGMENT AS A PERCENTAGE OF NET SALES:

       Small business and consumer group ...........................           60%            63%
       Large business group ........................................           40             37
                                                                       ----------     ----------
       Total .......................................................          100%           100%
                                                                       ==========     ==========



     Earnings before, interest, taxes, depreciation and amortization
       ("EBITDA"), as adjusted (1) .................................   $   17,008     $   16,581
                                                                       ==========     ==========

     EBITDA, as adjusted as a percentage of net sales ..............           31%            30%
                                                                       ==========     ==========
</TABLE>


(1) "EBITDA, as adjusted" is defined as operating income (loss) adjusted to
exclude depreciation, amortization of intangible assets, provision for
litigation settlement and acquisition-related and restructuring charges. EBITDA
is presented because it is a widely accepted indicator of a company's ability to
incur and service debt and of the Company's cash flows from operations excluding
any non-recurring items. However, EBITDA, as adjusted, does not purport to
represent cash provided by operating activities as reflected in the Company's
consolidated statements of cash flows, is not a measure of financial performance
under generally accepted accounting principles ("GAAP") and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with GAAP. Also, the measure of EBITDA, as adjusted, may not be
comparable to similar measures reported by other companies.






                                       10

<PAGE>   11


FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998

Net Sales

    Net sales for the quarter ended March 31, 1999 were $55.5 million,
essentially unchanged from $55.4 million for the same period in 1998. Net sales
of the small business and consumer group for the first quarter of 1999 were
$33.2 million, a 5% decrease from $34.8 million for the same period in 1998.
Included in the small business and consumer group are net sales of consumer
CD-ROM products, which decreased during the first quarter of 1999 from the same
period in 1998. The Company has experienced a decline in general market
conditions and reduced demand for the product. The decrease in net sales of
consumer CD-ROM products was partially offset by an increase in the sales of
other sales leads generation products, including the sale of the Company's
products via the Internet, by the small business and consumer group during the
same periods. Net sales of the large business group for the first quarter of
1999 were $22.3 million, an 8% increase from $20.6 million in the first quarter
of 1998. The large business group included data processing services sales of
$14.5 million during the first quarter 1999, compared to $12.6 million during
the first quarter 1998. The increase in data processing services sales is due to
the acquisition of Walter Karl in March 1998, and due to increased sales of data
processing services by the Company's National Accounts sales force. During late
1998, a significant data processing services customer notified the Company that
it intended to perform the same processing in-house. The customer represented 6%
of total net sales during fiscal year 1998. During the first quarter of 1999,
the customer transferred a significant portion of the business in-house.

Database and Production Costs

    For the first quarter 1999, database and production costs were $16.2
million, or 29% of net sales, compared to $15.4 million, or 28% of net sales for
the first quarter in 1998. Since 1996, database and production costs have
increased as a percentage of sales as a result of higher costs associated with
data processing services and CD-ROM production. To the extent that data
processing sales constitute a greater percentage of net sales, the Company
expects database and production costs to increase as a percentage of net sales.
Factors contributing to the increase in database and production costs as a
percentage of net sales for the first quarter of 1999 include an overall
increase in data processing services sales and the addition of consumer database
compilation costs associated with the Company's roll-out of the consumer white
pages file during the second quarter of 1998. The overall increase in database
and production costs was partially offset by the decrease in consumer CD-ROM
retail distribution sales.

Selling, General and Administrative Expenses

    Selling, general and administrative expenses for the quarter ended March 31,
1999 were $22.3 million, or 40% of net sales, compared to $23.4 million, or 42%
of net sales for the same period in 1998. During the first quarter 1999, the
Company focused on the reduction of expenses, successfully completing a cost
reduction program implemented during the third quarter of 1998.

Depreciation and Amortization Expenses

    Depreciation and amortization expenses for the first quarter 1999 were $6.0
million, or 11% of net sales, compared to $6.9 million, or 12% of net sales for
the same period in 1998. Amortization of acquired database costs and purchased
data processing software associated with the acquisition of DBA in February 1997
totaled $392 thousand and $2.8 million during 1999 and 1998, respectively.

Acquisition-Related and Restructuring Charges

    For 1998, in addition to the write-off of purchased in-process research and
development costs (purchased IPR&D) of $3.8 million for Walter Karl, included in
acquisition-related charges in the accompanying consolidated statement of
operations are: $2.6 million of costs associated with the Company's bid to
acquire Metromail Corporation, $0.7 million associated with the Company's
offering to sell Class A Common Stock which was not completed, and $1.4 million
for restructuring costs related to the Company's compilation and sales
activities for new businesses enacted during the first quarter of 1998.

Restructuring Charges

    During the first quarter of 1998 the Company recorded a restructuring charge
of $1.4 million related to the closing of the CDC new business compilation and
sales center and moving these operations from Vermont to Nebraska. All 45 of the
CDC employees were terminated, and severance recorded totaled $0.6 million. The
restructuring charges also included lease termination costs of $0.3 million and
a write-off of $0.5 million of leasehold improvement costs associated with the
closed Vermont facility. The restructuring, including recording the payments and
write-downs described, was completed by September 30, 1998.



                                       11

<PAGE>   12

Operating Income (Loss)

    Including the factors previously described, the Company had operating income
of $11.0 million, or 20% of net sales for the first quarter 1999, as compared to
an operating income of $1.2 million, or 2% of net sales for the same period in
1998.

Other Income (Expense), Net

    Other income (expense), net for the first quarter 1999 was $(0.6) million
compared to $(0.3) million for the same period in 1998. Interest expense for the
first quarter 1999 was $3.1 million, or 6% of net sales, compared to $1.3
million, or 2% of net sales for the same period in 1998. The increase in
interest expense is primarily the result of servicing debt under the Company's 9
1/2% Senior Subordinated Notes Due 2008. Investment income for the first quarter
1999 was $2.5 million, or 5% of net sales, compared to $1.0 million, or 2% of
net sales, for the same period in 1998. The Company recorded realized gains on
the sale of marketable securities totaling $2.0 million and $1.0 million during
the first quarter of 1999 and 1998, respectively.

Income Taxes

    A provision for income taxes of $4.2 million and $2.1 million was recorded
during the first quarter of 1999 and 1998, respectively. Acquisition-related
charges of $3.8 million were included in income before income taxes during 1998,
but are not deductible for tax purposes. The provision for these periods reflect
the inclusion of amortization on certain intangibles in taxable income not
deductible for tax purposes.

Extraordinary Item, net of tax

     During the first quarter of 1999, the Company repurchased $9.0 million of
its 9 1/2% Senior Subordinated Notes (the "Notes"). In connection with the
repurchase of the Notes, the Company recorded a gain of $0.1 million, net of
deferred financing costs of $0.4 million written-off in proportion to the face
amount of Notes purchased and retired.

EBITDA, as adjusted

    Excluding the provision for litigation settlement and acquisition-related
and restructuring charges previously described, the Company's EBITDA, as
adjusted, was $17.0 million, or 31% of net sales, during the first quarter 1999,
compared to $16.6 million, or 30% of net sales, during the same period in 1998.

YEAR 2000 READINESS DISCLOSURE

    In 1996 the Company began preparing its computer-based systems for Year 2000
("Y2K") computer software compliance. The Company's Y2K project covers both
traditional computer based systems and infrastructure ("IT Systems") and
computer based facilities and equipment ("Non IT Systems"). The Company's
project has seven phases: Inventory, Assessment, Detailed Planning & Solution
Design, Renovation, Testing, Implementation and Contingency Planning.

    The Company has completed an inventory and assessment of its IT Systems.
Some of these systems are fully compliant, while others require fixes to be
applied. The Company expects to correct the remaining non-compliant IT Systems
by replacing or correcting them as a part of a larger infrastructure improvement
effort. Infrastructure improvements are ongoing and will continue throughout
1999. The Company has completed an inventory and assessment of its NON-IT
Systems, some of which will be affected by the millennium rollover. Not all
affected systems require fixes; some are inconsequential or have nuisance
affects and will not be addressed. The Company expects to replace critical
non-compliant NON-IT Systems by the end of the year.

    The Company's Y2K project also considers the readiness of critical vendors.
The Company believes that the most reasonable likely worst case Y2K scenario is
that a small number of vendors will be unable to supply goods for a short time
after January 1, 2000. Contingency plans are being developed in the event that
critical vendors suffer from Y2K problems from their internal systems or their
suppliers systems. Although these plans are yet to be completed, the Company
expects that these plans may include a combination of actions including
stockpiling of goods and selective resourcing of business to Y2K compliant
vendors.



                                       12


<PAGE>   13


    The Company has incurred approximately $3.0 million of Y2K cost. These costs
fall into three categories: 1) systems replacement, 2) specific Y2K assessment
effort, and 3) expense cost of Y2K Project office. Future expenses are estimated
to include approximately $3.0 million of additional cost. These future costs are
expected to be primarily replacement system costs. Such cost estimates are based
upon presently available information and may change as the Company continues
with its Y2K project. The Company anticipates paying for its Y2K compliance plan
from operating cash flows.

    The above discussion regarding costs, risks and estimated completion dates
for Y2K compliance is based on the Company's best estimates given information
that is currently available, and is subject to change. Actual costs may
substantially exceed the Company's assessment due to unanticipated Y2K problems
associated with the Company's IT and non-IT systems and products. Further,
failure of the Company's vendors and customers to address Y2K problems in a
timely manner may have a greater adverse affect on the Company's business than
presently expected.

ACCOUNTING STANDARDS

    Statement of Financial Accounting Standard (SFAS) No. 133 "Accounting for
Derivative Instruments and Hedging Activities" was issued in June of 1998. SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize all
derivatives either assets or liabilities in the statement of financial position
and measure those instruments at fair value. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The Company
anticipates adopting this accounting pronouncement in 2000; however, management
believes it will not have a significant impact on the Company's consolidated
financial statements.

LIQUIDITY AND CAPITAL RESOURCES

    As of March 31, 1999, the Company's principal sources of liquidity included
cash and cash equivalents of $29.8 million and marketable securities with a fair
market value of $23.2 million. As of March 31, 1999, the Company had working
capital of $64.7 million.

    Net cash provided by operating activities during the first quarter of 1999
totaled $13.3 million compared to $9.0 million during the same period of 1998.

    List brokerage trade accounts receivable decreased from $17.8 million at
December 31, 1998 to $12.9 million at March 31, 1999. List brokerage trade
accounts payable decreased from $18.8 million at December 31, 1998 to $15.2
million at March 31, 1999. The balance of list brokerage trade accounts
receivable and list brokerage trade accounts payable may fluctuate significantly
and is dependent on the timing of cash receipts and disbursements.

    Total accrued expenses decreased from $12.5 million at December 31, 1998 to
$7.7 million at March 31, 1999 principally due to the payment of $4.6 million to
Experian Information Solutions, Inc. during the first quarter of 1999 in
connection with arbitration of a contractual dispute.

    Long-term debt decreased from $126.7 million at December 31, 1998 to $118.9
million at March 31, 1999 due to the Company's repurchase of $9.0 million of its
infoUSA 9 1/2% Senior Subordinated Notes.

     Treasury stock increased from $3.0 million at December 31, 1998 to $9.5
million at March 31, 1999 due to the purchase in the open market of 1.1 million
shares of common stock at a total cost of $6.6 million.

    The Company believes that its existing sources of liquidity and cash
generated from operations, assuming no major acquisitions, will satisfy the
Company's projected working capital and other cash requirements for at least the
next 12 months. To the extent the Company experiences growth in the future, the
Company anticipates that its operating and investing activities may use cash.
Any such future growth and any acquisitions of other technologies, products or
companies may require the Company to obtain additional equity or debt financing,
which may not be available, may be dilutive or may be restricted by the
Company's existing debt obligations.



                                       13


<PAGE>   14


FACTORS THAT MAY AFFECT OPERATING RESULTS

Integration of Recent and Future Acquisitions

    Since mid-1996, the Company has completed eight significant acquisitions,
including the August 1996 acquisition of Digital Directory Assistance, the
November 1996 merger with County Data Corporation and acquisition of Marketing
Data Systems, the December 1996 acquisition of BJ Hunter, the February 1997
merger with Database America ("DBA"), the August 1997 acquisition of Pro CD, the
March 1998 acquisition of Walter Karl and the June 1998 acquisition of JAMI
Marketing. The Company also made a number of other acquisitions in prior
periods. In March 1998, the Company attempted to acquire Metromail Corporation
("Metromail") for approximately $850.0 million, including the assumption of
debt, and may in the future evaluate other acquisitions of that magnitude. The
Company's strategy includes continued growth through acquisitions of
complementary products, technologies or businesses, which, if implemented, may
result in the diversion of management's attention from the day-to-day operations
of the Company's business and may include numerous other risks, including
difficulties in the integration of operations, databases, products and
personnel, difficulty in applying the Company's internal controls to acquired
businesses and particular problems, liabilities or contingencies related to the
businesses being acquired. To the extent that efforts to integrate recent or
future acquisitions fail, there could be a material adverse effect on the
Company's business, financial condition and results of operations. While the
Company has not made any binding commitments with respect to any particular
future acquisitions, the Company frequently evaluates the strategic
opportunities available to it and intends to pursue opportunities that it
believes fit its business strategy.

Recent Changes in Senior Management

    The Company has recently undergone significant changes in its senior
management team, even as it has experienced rapid growth both internally and
through acquisitions. Vinod Gupta, the Company's Chairman, was re-appointed
Chief Executive Officer in July 1998, having resigned that position in October
1997. Scott Dahnke, Chief Executive Officer from October 1997, Jon Wellman,
President and Chief Operating Officer since January 1997 and Chief Financial
Officer from January 1995 to January 1997, Steve Purcell, Chief Financial
Officer since April 1997, Rick Puckett, Controller of the Company since October
1997 and Chief Financial Officer after Mr. Purcell's departure, Gregory Back,
Executive Vice President of Corporate Planning and Business Development since
October 1997 and Kevin Hall, Senior Vice President of Special Projects since
October 1997 ceased their employment with the Company between July and September
1998. Gautam Gupta, a director of the Company who is unrelated to Vinod Gupta,
served as acting Chief Financial Officer from October 1998 to January 1999.
Stormy Dean, the Company's controller, has served as acting Chief Financial
Officer since January 1999 while the Company conducts a search for his permanent
replacement. Messrs. Dahnke, Wellman, Purcell, Puckett, Back and Hall did not
resign because of any disagreements with the Company's Board or other senior
management, and much of the Company's remaining senior management team has been
with the Company for many years. The Company has now been reorganized into three
major groups headed by group presidents. Al Ambrosino, who has been with the
Company or its subsidiary for 19 years, Monica Messer, who has been with the
Company for 16 years, and William Chasse, who has been with the Company for 11
years, have each been named group president. In the past, limitations on senior
management resources resulted in a few key individuals taking on multiple roles
and responsibilities in the Company, which in turn placed a significant strain
on the Company's senior management. Failure of the Company to identify and hire
a permanent Chief Financial Officer on a timely basis or failure of Company's
senior management to adjust to new responsibilities, manage growth or work
together effectively could result in disruptions of operations or the departure
of additional key personnel, which in turn could have a material adverse effect
on the Company's business, financial condition, results of operations and stock
price.

Fluctuations in Operating Results

    The Company believes that future operating results will be subject to
quarterly and annual fluctuations, and that long term growth will depend upon
the Company's ability to expand its present business and complete strategic
acquisitions. The Company's net sales on a quarterly basis can be affected by
seasonal characteristics and certain other factors. For example, the Company
typically experiences higher revenue from its sales leads products in the fall
of each year due to increases in direct marketing by the Company's clients in
the fourth quarter of each year. Revenue from sales lead generation products is
generally lower in the summer due to decreased direct marketing activity of the
Company's customers during that time. The Company typically experiences
decreases in net sales of consumer CD ROM products just prior to the
introduction of new editions of these products. This effect, coupled with the
changes in estimates outlined below, resulted in a decline in consumer CD ROM
net sales in the three months ended September 30, 1998 compared to the prior
year period and the three months ended June 30, 1998. In addition, cancellation
of a major data processing contract in the three months ended September 30, 1998
resulted in lower than expected net sales of data processing services in that
period. The Company's operating expenses are determined in part based on the
Company's expectations of future revenue growth and are substantially fixed. As
a result, unexpected changes in revenue levels, such as those discussed above,
have a disproportionate 





                                       14


<PAGE>   15


effect on operating performance in any given period. In addition, changes in
estimates for increased reserves and allowances, the provision of an arbitration
reserve and charges related to cost-cutting in the three months ended September
30, 1998 amounted to a total of $21.4 million in charges in that period. These
charges and the weakness of net sales discussed above caused the Company to
record a net loss of $13.4 million for the three months ended September 30,
1998, and lower than expected net income for the fiscal year. If the Company is
required to record charges in the future, such charges could materially and
adversely affect the Company's business, financial condition or results of
operations. Long term growth will be materially adversely affected if the
Company fails to successfully exploit the Internet as a market for its products
and services, broaden its existing product and service offerings, increase sales
of products and services, expand into new markets, or complete acquisitions or
successfully integrate acquired operations into its existing operations. To the
extent there are fluctuations in operating results or the Company fails to
achieve long-term internal growth or growth through acquisitions, there could be
a material adverse effect on the Company's business, financial condition or
results of operations.

Risk of Product Returns

    The Company has agreements that allow retailers certain rights to return its
consumer CD-ROM products. Accordingly, the Company is exposed to the risk of
product returns from retailers and distributors, particularly in the case of
products sold shortly before introduction of the next year's edition of the same
product. Consumers may also seek to return consumer CD-ROM products, although
historically returns from consumers have been low. At the time of product sales,
the Company establishes reserves based on estimated future returns of products,
taking into account promotional activities, the timing of new product
introductions, seasonal variations in product returns, distributor and retailer
inventories of the Company's products and other factors. Actual product returns
could differ from estimates, and product returns that exceed the Company's
reserves could materially adversely affect the Company's business, financial
condition and results of operations. In addition, changes in estimates of
reserves for product returns can have a material and adverse effect on the
Company's operating results. For example, as discussed above, changes in
estimates for increased reserves and allowances in the consumer CD-ROM business,
primarily to account for anticipated returns and price protection adjustments,
together with additions to other reserves, amounted to charges of approximately
$15.5 million in the three months ended September 30, 1998 (out of the $21.4
million in charges discussed above), contributing to the Company's net loss for
that period.

Effects of Leverage

    As of March 31, 1999, the Company had total indebtedness of approximately
$121.2 million. In addition, the Company's existing debt obligations allow the
Company to enter into a revolving credit facility under which it would be able
to incur up to $100.0 million of additional borrowings and to incur substantial
additional indebtedness (including, subject to certain conditions, an additional
$85.0 million of senior subordinated notes).

    The Company's ability to satisfy its debt obligations will depend upon its
future operating performance, which performance will be affected by prevailing
economic conditions and financial, business and other factors, certain of which
are beyond the control of the Company. The Company's ability to satisfy its debt
obligations may also depend upon the future availability of revolving credit
borrowings under a revolving credit facility. Such availability will depend on,
among other things, the Company's ability to enter into such a credit facility
on acceptable terms and its ability to meet certain specified financial ratios
and maintenance tests. The Company expects that, based on current and expected
levels of operations, its operating cash flow should be sufficient to meet its
operating expenses, to make necessary capital expenditures and to service its
debt requirements as they become due. If the Company is unable to service its
indebtedness, it will be forced to take actions, such as reducing or delaying
acquisitions and/or capital expenditures, selling assets, restructuring or
refinancing its indebtedness or seeking additional equity capital. There is no
assurance that any of these remedies could be effected on satisfactory terms, if
at all.

Restrictions Imposed By Terms of Indebtedness

    The Company's existing debt obligations contain certain covenants limiting,
subject to certain exceptions, the incurrence of indebtedness, payment of
dividends or other restricted payments, issuance of guarantees, entering into
certain transactions with affiliates, consummation of certain asset sales,
certain mergers and consolidations, sales or other dispositions of all or
substantially all of the assets of the Company and imposing restrictions on the
ability of a subsidiary to pay dividends or make certain payments to the Company
and its subsidiaries. A breach of any of these covenants could result in an
event of default under the terms of the Company's existing debt obligations. The
Company's ability to comply with such covenants may be affected by events beyond
its control.

    In addition, if the Company were to enter into a revolving credit facility,
such facility would contain other restrictive covenants which would be more
restrictive than those contained in the Company's existing debt obligations. A
breach of any of these covenants, 


                                       15

<PAGE>   16


unless waived, would result in a default under such a credit facility. Upon the
occurrence of an event of default under such a credit facility, the lenders
could elect to declare all amounts outstanding, together with accrued interest,
to be immediately due and payable. If the lenders under such a credit facility
accelerate the payment of such indebtedness, there can be no assurance that the
assets of the Company would be sufficient to repay in full such indebtedness and
the other indebtedness of the Company. If the Company were unable to repay those
amounts, such lenders could proceed against the collateral granted to them to
secure that indebtedness.

Risks Associated with Changes in Technology

    Advances in information technology may result in changing customer
preferences for products and product delivery formats in the business and
consumer marketing information industry. The Company believes it is presently
the leading provider of marketing information on CD-ROM. However, the Company's
sales of CD-ROM's in the quarter ended September 30, 1998 were lower than
expected by the Company and projected by financial analysts. In addition, the
Company believes that if customers increasingly look to digital video disc
("DVD") or other new technology for information resources, the market for
business and consumer information on CD-ROM may contract and prices for CD-ROM
products may have to decrease or CD-ROM products may become obsolete. The
Company plans to introduce products on DVD. Failure of the Company to improve
sales of CD-ROM products or to successfully sell its products on DVD or to
successfully introduce products that take advantage of other technological
changes may thus have a material adverse effect on the Company's business,
results of operations and financial condition.

    The Company believes that the Internet represents an important and rapidly
evolving market for marketing information products and services. As such, the
Company has recently begun to focus more heavily on the Internet, and to develop
plans to exploit its new market more fully in the future. The Company may fail
to develop product and services that are well adapted to the Internet market, to
achieve market acceptance of its products and services, to achieve sufficient
traffic to its Internet sites to generate significant net sales, or to
successfully implement electronic commerce operations. Any such failure could
have a material adverse effect on the Company's business, financial condition
and results of operations.

Competition

    The business and consumer marketing information industry is highly
competitive. Many of the Company's principal or potential future competitors are
much larger than the Company and have much larger capital bases from which to
develop and compete with the Company. The Company faces increasing competition
in consumer sales lead generation products and data processing services from
Great Universal Stores, P.L.C. ("GUS") as a result of GUS' recent acquisitions
of Experian, Direct Marketing Technologies and Metromail. In business sales lead
generation products, the Company faces competition from Dun's Marketing Services
("DMS"), a division of Dun & Bradstreet. DMS, which relies upon information
compiled from Dun & Bradstreet's credit database, tends to focus on marketing to
large companies. In business directory publishing, the Company competes
primarily with Regional Bell Operating Companies, Donnelley Marketing and many
smaller, regional directory publishers. In consumer sales lead generation
products, the Company competes with Metromail, Donnelley Marketing, R.L. Polk,
Trans Union, Experian and Equifax, both directly and through reseller networks.
In data processing services, the Company competes with Acxiom, May & Speh,
Direct Marketing Technologies and Harte-Hanks Data Technologies. In consumer
products, the Company competes with certain smaller producers of CD-ROM
products. In addition, the rapid expansion of the Internet creates a substantial
new channel for distributing business information to the market, and a new
avenue for future entrants to the business and consumer marketing information
industry. There is no guarantee that the Company will be successful in this new
market.

Loss of Data Centers

    The Company's business depends on computer systems contained in the
Company's data centers located in Omaha, Nebraska, Carter Lake, Iowa and
Montvale, New Jersey. A fire or other disaster affecting any of the Company's
data centers could disable the Company's computer systems. Any significant
damage to any of the data centers could have a material adverse effect on the
Company's business, financial condition and results of operations.

    The Company is in the process of relocating certain operations located on
the east coast. The Company is relocating certain personnel between the Montvale
and Greenwich facilities, and is also going to relocate certain personnel from
the Montvale and Greenwich sites to a new location in Park Ridge, New Jersey.
Any disruptions to operations or loss of data or equipment in connection with
these moves could materially and adversely affect the Company's business,
financial condition or results of operations.


                                       16

<PAGE>   17

Limited Protection of Intellectual Property Rights

    The Company regards its databases and software as proprietary. The Company's
databases are copyrighted, and the Company depends on trade secret and
non-disclosure safeguards for protection of its software. The Company
distributes its products under agreements that grant customers a license to use
the Company's products for specified purposes and contain terms and conditions
prohibiting the unauthorized reproduction and use of the Company's products. In
addition, the Company generally enters into confidentiality agreements with its
management and programming staff and limits access to and distribution of its
proprietary information. There can be no assurance that the foregoing measures
will be adequate to protect the Company's intellectual property.

Restatement of Financial Results

    The 1995 financial statements were restated in 1997 to reflect a settlement
of an employee's stock options as compensation expense due to additional
information obtained regarding the nature and timing of the agreement to settle
the options. The 1995 financial statements were also restated to reflect an
increase to receivable reserves of $0.6 million as selling, general and
administrative expenses. The restatements decreased net income by $2.3 million
and earnings per share by $0.06 in 1995 and had no impact on net sales. The
Company has implemented new control procedures that assign responsibility for
accounting for all option activity and ensure that copies of the related
underlying agreements are reviewed for appropriate accounting. The 1995 and 1996
financial statements were restated to properly present the discontinued
operations of American Business Communications (ABC). Since ABC was sold in
exchange for a non-recourse promissory note, the Company had not relinquished
all risks of ownership and was required to reflect the continued losses of the
business in its financial statements. These restatements did not impact net
sales, net income or earnings per share for either 1995 or 1996. Due to the
unique circumstances involved, the Company had misinterpreted the accounting
rules related to the "sale" and re-addressed the accounting when the purchaser
defaulted on the note.

    The Form 10-Q for the quarter ended March 31, 1997 was restated to
accurately account for the acquisition of DBA and the related IPR&D charge as a
result of receiving a final valuation report. The restatement increased net
income and earnings per share by $18.2 million and $.79, respectively for the
quarter ended March 31, 1997 and had no impact on net sales. The Company uses
its best estimates based on information available related to acquisitions when
filing its interim financial statements. However, estimates change as additional
information is obtained during the valuation process.

    The Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and
September 30, 1998 were restated to accurately account for the acquisition of
Walter Karl and the related IPR&D charge as a result of receiving a valuation
report reflecting the retroactive application of the Securities and Exchange
Commission's new guidelines for valuing purchased IPR&D. During the first
quarter of 1998, the Company had originally recorded an IPR&D charge of $9.2
million. During the fourth quarter of 1998, the Company performed a new
valuation following the new guidance and the IPR&D charge was adjusted to $3.8
million.

Direct Marketing Regulation and Dependence Upon Mail Carriers

    The Company and many of its customers engage in direct marketing. Certain
data and services provided by the Company are subject to regulation by federal,
state and local authorities. In addition, growing concerns about individual
privacy and the collection, distribution and use of information about
individuals have led to self-regulation of such practices by the direct
marketing industry through guidelines suggested by the Direct Marketing
Association and to increased federal and state regulation. Compliance with
existing federal, state and local laws and regulations and industry
self-regulation has not to date had a material adverse effect on the Company's
business, financial condition or results of operations. Nonetheless, federal,
state and local laws and regulations designed to protect the public from the
misuse of personal information in the marketplace and adverse publicity or
potential litigation concerning the commercial use of such information may
increasingly affect the operations of the Company, which could result in
substantial regulatory compliance or litigation expense or a loss of revenue.
Certain proposed federal legislation could also create proprietary rights in
certain "white pages" information that is presently in the public domain, which
could in turn increase the cost to the Company of acquiring data or disrupt its
ability to do so. The direct mail industry depends and will continue to depend
upon the services of the United States Postal Service and other private mail
carriers. Any modification by the United States Postal Service of its rate
structure, any increase in public or private postal rates generally or any
disruption in the availability of public or private postal services could have a
negative impact on the demand for business information, direct mail activities
and the cost of the Company's direct mail activities.


                                       17


<PAGE>   18

Financial and Accounting Issues Related to Acquisitions

    In connection with the acquisitions completed since mid-1996, the Company
issued approximately 3.7 million shares of Class A Common Stock and 3.7 million
shares of Class B Common Stock, and paid approximately $158.4 million in cash.
The issuance of stock in these or future transactions may be dilutive to
existing stockholders to the extent that earnings of the acquired companies do
not offset the additional number of shares outstanding. In connection with the
acquisitions of DBA, Pro CD and Walter Karl, the Company incurred approximately
$97.0 million in debt. In connection with future acquisitions, the Company may
incur substantial amounts of debt. Servicing such debt may result in decreases
in earnings per share, and the inability on the part of the Company to service
such debt would result in a material adverse effect on the Company's business,
financial condition and results of operations. Finally, the Company expects that
future acquisitions will generally be required to be accounted for using the
purchase method. As a result of such accounting treatment, the Company may be
required to take charges to operations or to amortize goodwill in connection
with future acquisitions. As a result of acquisitions completed since mid-1996,
the Company was required to take significant acquisition-related charges to
operations and will be required to amortize goodwill and other intangibles over
periods of 1 to 15 years. The acquisition-related charges and amortization of
goodwill and other intangibles have had and will continue to have an adverse
effect on net income. To the extent that future acquisitions result in
substantial charges to operations, incurrence of debt and amortization of
goodwill and other intangibles, such acquisitions could have an adverse effect
on the Company's net income, earnings per share and overall financial condition.

Volatility and Uncertainties with Respect to Stock Price

    As with other companies that have experienced rapid growth, the Company has
experienced and is likely to continue to experience substantial volatility in
its stock price. Factors such as announcements by either the Company or its
competitors of new products or services or of changes in product or service
pricing policies, quarterly fluctuations in the Company's operating results,
announcements of technical innovations, announcements relating to strategic
relationships or acquisitions by the Company or its competitors, changes in
earnings estimates, opinions or ratings by analysts, and general market
conditions or market conditions within the business and consumer marketing
information industry, among other factors, may have significant impact on the
Company's stock price. Should the Company fail to introduce, enhance or
integrate products or services on the schedules expected, its stock price could
be adversely affected. It is likely that in some future quarter the Company will
fail to achieve anticipated operating results, and this failure could have a
material adverse effect on the Company's stock price. In addition, the Company's
Class A Common Stock and Class B Common Stock have been trading for a very short
time. While the Company expects the Class A Common Stock and Class B Common
Stock prices to remain roughly equal in most market conditions, the difference
in rights of the two classes, coupled with the general volatility of the
Company's stock price described above, could cause the Class A Common Stock and
Class B Common Stock to trade at different prices. In the event of a tender
offer or other unsolicited attempt to acquire the Company, shares of Class B
Common Stock would likely trade at a substantial premium to shares of Class A
Common Stock as a result of the disparity of voting rights. Future issuances of
both Class A Common Stock and Class B Common Stock could affect the price for
either or both classes of Common Stock. For the foregoing reasons, the price for
the Company's Class A Common Stock and Class B Common Stock may be subject to
substantial fluctuation.

Purchase of Notes Upon a Change of Control

    Upon the occurrence of a change of control of the Company in certain
circumstances, the Company is required to make an offer to purchase all
outstanding 9 1/2% Senior Subordinated Notes at a purchase price equal to 101%
of the principal amount thereof, together with accrued and unpaid interest, if
any, to the date of purchase. There can be no assurance that the Company will
have available funds sufficient to purchase the notes upon such change of
control. In addition, any change of control, and any repurchase of the notes
upon a change of control, may constitute an event of default under any revolving
credit facility which the Company may enter into, and in that event the
obligations of the Company thereunder could be declared due and payable by the
lenders thereunder. Upon the occurrence of an event of default, the lenders
under such a credit facility may have the ability to block repurchases of the
Notes for a period of time and upon any acceleration of the obligations under
such a credit facility, the lenders thereunder would be entitled to receive
payment of all outstanding obligations thereunder before the Company may
repurchase any of the notes tendered pursuant to an offer to repurchase the
notes upon such change of control.


                                       18

<PAGE>   19


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is not exposed to material future earnings or cash flow
exposures from changes in interest rates on long-term debt as substantially all
of the Company's debt is at fixed interest rates. The Company is not exposed to
material future earnings or cash flow exposures from fluctuations in foreign
currency exchange rates as operating results related to foreign operations are
not material.















                                       19


<PAGE>   20



                                  Info USA INC.

                                    FORM 10-Q

                              FOR THE QUARTER ENDED

                                 MARCH 31, 1999

                                     PART II

                                OTHER INFORMATION


                                       20


<PAGE>   21




                                  Info USA INC.
                                    FORM 10-Q
                              FOR THE QUARTER ENDED
                                 MARCH 31, 1999

                                     PART II

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  27  Financial Data Schedule

         (b)      Report on Form 8-K

                  No reports on Form 8-K have been filed during the quarter
                  ended March 31, 1999





                                       21
<PAGE>   22




                               S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

    info USA INC.


Date:   May 14, 1999                 /s/ STORMY L. DEAN
       --------------------------    -------------------------------------------
                                     Stormy L. Dean, Controller and Acting Chief
                                     Financial Officer 
                                     (principal financial officer)

                                       22

<PAGE>   23




                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

Exhibit No.                Description
-----------                -----------

<S>                        <C>
   27                      Financial Data Schedule
</TABLE>