##### Table of Contents



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 September 30, 2004 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. 
 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)
 Registrants telephone number, including area code (402) 593-4500 N/A   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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). 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. 53,452,881 shares of Common Stock at October 20, 2004




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infoUSA INC. INDEX PART I  FINANCIAL INFORMATION AND MANAGEMENTS DISCUSSION AND ANALYSISItem 1. Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2004 and 2003Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2004 and 2003Notes to Consolidated Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 6. Exhibits and Reports on Form 8-KSignatureIndex to ExhibitsCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



infoUSA INC. FORM 10-Q FOR THE QUARTER ENDED September 30, 2004 
 PART I FINANCIAL INFORMATION 3




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##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS infoUSA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts) September 30,
    
    December 31,2004
    
    2003(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    10,101
    
    
    $
    2,686Marketable securities
    
    
    2,740
    
    
    
    3,685Trade accounts receivable, net of allowances of $1,586 and $2,492, respectively
    
    
    46,960
    
    
    
    40,922List brokerage trade accounts receivable
    
    
    21,280
    
    
    
    12,844Income taxes receivable
    
    
    2,461
    
    
    
    1,046Prepaid expenses
    
    
    8,715
    
    
    
    4,985Deferred marketing costs
    
    
    2,621
    
    
    
    5,457Total current assets
    
    
    94,878
    
    
    
    71,625Property and equipment, net
    
    
    43,452
    
    
    
    40,984Goodwill, net
    
    
    299,480
    
    
    
    202,386Intangible assets, net
    
    
    70,681
    
    
    
    45,223Other assets
    
    
    8,400
    
    
    
    6,128$
    516,891
    
    
    $
    366,346LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    32,894
    
    
    $
    17,280Accounts payable
    
    
    16,373
    
    
    
    16,212List brokerage trade accounts payable
    
    
    16,914
    
    
    
    9,516Accrued payroll expenses
    
    
    16,812
    
    
    
    17,793Accrued expenses
    
    
    6,964
    
    
    
    824Deferred income taxes
    
    
    3,714
    
    
    
    3,241Deferred revenues
    
    
    44,119
    
    
    
    19,824Total current liabilities
    
    
    137,790
    
    
    
    84,690Long-term debt, net of current portion
    
    
    187,704
    
    
    
    122,485Deferred income taxes
    
    
    24,587
    
    
    
    8,553Deferred revenue
    
    
    
    
    
    
    3,000Other liabilities
    
    
    1,397
    
    
    
    1,397Commitments and contingenciesStockholders equity:Common stock, $.0025 par value. Authorized 295,000,000 shares; 53,442,026
shares issued and 53,027,874 outstanding at September 30, 2004 and 52,808,835
shares issued and 52,271,323 outstanding at December 31, 2003
    
    
    134
    
    
    
    132Paid-in capital
    
    
    105,362
    
    
    
    99,447Retained earnings
    
    
    65,062
    
    
    
    51,932Treasury stock, at cost, 414,152 shares held at September 30, 2004 and 537,512
held at December 31, 2003
    
    
    (2,531
    )
    
    
    (3,247
    )Notes receivable from officers
    
    
    (336
    )
    
    
    (325
    )Accumulated other comprehensive loss
    
    
    (2,278
    )
    
    
    (1,718
    )Total stockholders equity
    
    
    165,413
    
    
    
    146,221$
    516,891
    
    
    $
    366,346
 The accompanying notes are an integral part of the
consolidated financial statements. 4




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infoUSA INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)
 THREE MONTHS ENDED
    
    NINE MONTHS ENDEDSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003(UNAUDITED)
    
    (UNAUDITED)Net sales
    
    $
    90,172
    
    
    $
    77,379
    
    
    $
    254,777
    
    
    $
    232,290Costs and expenses:Database and production costs
    
    
    27,634
    
    
    
    21,416
    
    
    
    76,318
    
    
    
    64,556Selling, general and administrative (excluding
non-cash stock option compensation expense of
$(45) and $76 for the three months and $595 and
$145 for the nine months ended September 30,
2004 and 2003, respectively)
    
    
    43,046
    
    
    
    36,827
    
    
    
    123,246
    
    
    
    103,825Depreciation and amortization of operating assets
    
    
    3,523
    
    
    
    3,696
    
    
    
    10,397
    
    
    
    11,254Amortization of intangible assets
    
    
    4,409
    
    
    
    3,310
    
    
    
    11,471
    
    
    
    9,960Non-cash stock option compensation
    
    
    (45
    )
    
    
    76
    
    
    
    595
    
    
    
    145Litigation settlement charge
    
    
    
    
    
    
    1,667
    
    
    
    
    
    
    
    1,667Restructuring charges
    
    
    766
    
    
    
    645
    
    
    
    2,388
    
    
    
    1,630Acquisition costs
    
    
    79
    
    
    
    
    
    
    
    321
    
    
    
    54Total operating costs and expenses
    
    
    79,412
    
    
    
    67,637
    
    
    
    224,736
    
    
    
    193,091Operating income
    
    
    10,760
    
    
    
    9,742
    
    
    
    30,041
    
    
    
    39,199Other income (expense):Investment income (loss)
    
    
    (177
    )
    
    
    394
    
    
    
    (219
    )
    
    
    1,222Other charges
    
    
    
    
    
    
    (2,240
    )
    
    
    (2,223
    )
    
    
    (6,385
    )Interest expense
    
    
    (2,447
    )
    
    
    (2,243
    )
    
    
    (6,422
    )
    
    
    (9,500
    )Other expense, net
    
    
    (2,624
    )
    
    
    (4,089
    )
    
    
    (8,864
    )
    
    
    (14,663
    )Income before income taxes
    
    
    8,136
    
    
    
    5,653
    
    
    
    21,177
    
    
    
    24,536Income taxes
    
    
    3,091
    
    
    
    2,021
    
    
    
    8,047
    
    
    
    9,324Net income
    
    $
    5,045
    
    
    $
    3,632
    
    
    $
    13,130
    
    
    $
    15,212Basic earnings per share:
    
    $
    0.10
    
    
    $
    0.07
    
    
    $
    0.25
    
    
    $
    0.30Diluted earnings per share:
    
    $
    0.10
    
    
    $
    0.07
    
    
    $
    0.25
    
    
    $
    0.30
 The accompanying notes are an integral part of the
consolidated financial statements. 5




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infoUSA INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 NINE MONTHS ENDEDSeptember 30,2004
    
    2003(UNAUDITED)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    13,130
    
    
    $
    15,212Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization of operating assets
    
    
    10,397
    
    
    
    11,254Amortization of intangible assets
    
    
    11,471
    
    
    
    9,960Amortization of deferred financing costs
    
    
    203
    
    
    
    539Deferred income taxes
    
    
    723
    
    
    
    4,304Tax benefit related to employee stock options
    
    
    762
    
    
    
    Non-cash stock option compensation expense
    
    
    595
    
    
    
    145Non-cash 401(k) contribution in common stock
    
    
    1,146
    
    
    
    1,028(Gain) loss on sale of assets
    
    
    275
    
    
    
    (860
    )Non-cash other charges
    
    
    796
    
    
    
    2,482Changes in assets and liabilities, net of effect of acquisitions:Trade accounts receivable
    
    
    3,846
    
    
    
    6,727List brokerage trade accounts receivable
    
    
    1,268
    
    
    
    4,014Prepaid expenses and other assets
    
    
    (960
    )
    
    
    (5,185
    )Deferred marketing costs
    
    
    2,836
    
    
    
    (1,853
    )Accounts payable
    
    
    (4,311
    )
    
    
    (533
    )List brokerage trade accounts payable
    
    
    (880
    )
    
    
    (4,179
    )Income taxes receivable and payable, net
    
    
    261
    
    
    
    (4,726
    )Accrued expenses and other liabilities
    
    
    4,233
    
    
    
    (785
    )Net cash provided by operating activities
    
    
    45,791
    
    
    
    37,544CASH FLOWS FROM INVESTING ACTIVITIES:Sale of other investments
    
    
    2,508
    
    
    
    1,628Purchase of other investments
    
    
    (3,948
    )
    
    
    (626
    )Purchases of property and equipment
    
    
    (3,721
    )
    
    
    (4,657
    )Acquisitions of businesses, net of cash acquired
    
    
    (109,766
    )
    
    
    (5,494
    )Software and database development costs
    
    
    (1,894
    )
    
    
    (743
    )Net cash used in investing activities
    
    
    (116,821
    )
    
    
    (9,892
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of long-term debt
    
    
    (195,613
    )
    
    
    (137,041
    )Proceeds of long-term debt
    
    
    272,833
    
    
    
    100,000Deferred financing costs paid
    
    
    (2,902
    )
    
    
    (141
    )Proceeds from repayment of officer loan
    
    
    
    
    
    
    496Proceeds from exercise of stock options
    
    
    4,127
    
    
    
    5,890Net cash used in financing activities
    
    
    78,445
    
    
    
    (30,796
    )Net increase (decrease) in cash and cash equivalents
    
    
    7,415
    
    
    
    (3,144
    )Cash and cash equivalents, beginning of period
    
    
    2,686
    
    
    
    6,285Cash and cash equivalents, end of period
    
    $
    10,101
    
    
    $
    3,141Supplemental cash flow information:Interest paid
    
    $
    6,208
    
    
    $
    8,390Income taxes paid
    
    $
    6,053
    
    
    $
    9,904
 The accompanying notes are an integral part of the
consolidated financial statements. 6




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infoUSA INC. AND SUBSIDIARIES 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. GENERAL The accompanying unaudited consolidated 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 consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include
all the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. 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, 2003 included in the Companys 2003 Annual Report on Form 10-K,
filed with the Securities and Exchange Commission. That report includes a
summary of our critical accounting policies. There have been no material
changes in the accounting policies followed by us during fiscal 2004. The preparation of financial statements in conformity with GAAP requires
our management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements as well as reported amounts of revenues and expenses during the
reporting period. 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. Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(In Thousands)2004
    
    2003
    
    2004
    
    2003Weighted average number of shares used in basic EPS
    
    
    53,005
    
    
    
    51,676
    
    
    
    52,630
    
    
    
    51,351Net additional common stock equivalent shares
outstanding after assumed exercise of stock
options
    
    
    312
    
    
    
    681
    
    
    
    493
    
    
    
    102Weighted average number of shares outstanding used
in diluted EPS
    
    
    53,317
    
    
    
    52,357
    
    
    
    53,123
    
    
    
    51,453
 3. SEGMENT INFORMATION The Company currently reports financial information on two business
segments. The infoUSA Group (formerly known as the Small Business segment) licenses
its sales leads, mailing lists, databases, and other database marketing
services to small and medium size businesses, entrepreneurs, professionals, and
sales executives. This segment also includes the sale of our database
content on the
Internet. The Donnelley Group (formerly known as the Large Business segment)
provides licensing of the infoUSA database, direct marketing services, database
marketing services, e-mail marketing services, and list brokerage and list
management services to large businesses, i.e. businesses with 1,000 or more
employees. The infoUSA Group and Donnelley Group reflect actual net sales, order
production costs, identifiable direct sales and marketing costs. The remaining
indirect costs are presented as a reconciling item in corporate activities. The
corporate activities group includes the compilation of our proprietary
databases, such as 14 million businesses, 220 million consumers, 5.2 million
new homeowners, 17.0 million new movers, 2.6 million new business formations
and other databases. They also include the cost for database verification,
administrative function of the company and other identified gains (losses). 7




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The
Company accounts for property and equipment on a consolidated basis.
The Companys property and equipment is shared by the Companys business
segments. Depreciation expense is recorded in corporate activities. Goodwill, net of accumulated amortization for the Donnelley Group segment
increased from $174.2 million at September 30, 2003 to $258.3 million at
September 30, 2004. The increase in goodwill is due to the acquisition of
Triplex in February 2004, OneSource in June 2004 and Edith Roman in June 2004. The Company has no intercompany sales or intercompany expense
transactions. Accordingly, there are no adjustments necessary to eliminate
amounts between the Companys segments. The following table summarizes segment
information: For The Three Months Ended September 30, 2004infoUSA
    
    Donnelley
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    32,814
    
    
    $
    57,358
    
    
    $
    
    
    
    $
    90,172Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    45
    
    
    
    45Restructuring charges
    
    
    
    
    
    
    
    
    
    
    (766
    )
    
    
    (766
    )Acquisition costs
    
    
    
    
    
    
    
    
    
    
    (79
    )
    
    
    (79
    )Operating income (loss)
    
    
    9,789
    
    
    
    21,596
    
    
    
    (20,625
    )
    
    
    10,760Investment loss
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    (177
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (2,447
    )
    
    
    (2,447
    )Income (loss) before income taxes
    
    
    9,789
    
    
    
    21,596
    
    
    
    (23,249
    )
    
    
    8,136Goodwill, net of amortization
    
    
    41,152
    
    
    
    258,328
    
    
    
    
    
    
    
    299,480
 For The Three Months Ended September 30, 2003infoUSA
    
    Donnelley
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    37,902
    
    
    $
    39,477
    
    
    $
    
    
    
    $
    77,379Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    (76
    )Litigation settlement charge
    
    
    
    
    
    
    
    
    
    
    (1,667
    )
    
    
    (1,667
    )Restructuring charges
    
    
    
    
    
    
    
    
    
    
    (645
    )
    
    
    (645
    )Operating income (loss)
    
    
    10,423
    
    
    
    20,009
    
    
    
    (20,690
    )
    
    
    9,742Investment income
    
    
    
    
    
    
    
    
    
    
    394
    
    
    
    394Other charges
    
    
    
    
    
    
    
    
    
    
    (2,240
    )
    
    
    (2,240
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (2,243
    )
    
    
    (2,243
    )Income (loss) before income taxes
    
    
    10,423
    
    
    
    20,009
    
    
    
    (24,779
    )
    
    
    5,653Goodwill, net of amortization
    
    
    41,152
    
    
    
    174,234
    
    
    
    
    
    
    
    215,386
 For The Nine Months Ended September 30, 2004infoUSA
    
    Donnelley
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    111,104
    
    
    $
    143,673
    
    
    $
    
    
    
    $
    254,777Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    (595
    )
    
    
    (595
    )Restructuring charges
    
    
    
    
    
    
    
    
    
    
    (2,388
    )
    
    
    (2,388
    )Acquisition costs
    
    
    
    
    
    
    
    
    
    
    (321
    )
    
    
    (321
    )Operating income (loss)
    
    
    35,597
    
    
    
    59,614
    
    
    
    (65,170
    )
    
    
    30,041Investment loss
    
    
    
    
    
    
    
    
    
    
    (219
    )
    
    
    (219
    )Other charges
    
    
    
    
    
    
    
    
    
    
    (2,223
    )
    
    
    (2,223
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (6,422
    )
    
    
    (6,422
    )Income (loss) before income taxes
    
    
    35,597
    
    
    
    59,614
    
    
    
    (74,034
    )
    
    
    21,177Goodwill, net of amortization
    
    
    41,152
    
    
    
    258,328
    
    
    
    
    
    
    
    299,480
 8




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For The Nine Months Ended September 30, 2003infoUSA
    
    Donnelley
    
    Corporate
    
    ConsolidatedGroup
    
    Group
    
    Activities
    
    Total(In thousands)Net sales
    
    $
    117,556
    
    
    $
    114,734
    
    
    $
    
    
    
    $
    232,290Non-cash stock compensation
    
    
    
    
    
    
    
    
    
    
    (145
    )
    
    
    (145
    )Litigation settlement charge
    
    
    
    
    
    
    
    
    
    
    (1,667
    )
    
    
    (1,667
    )Restructuring charges
    
    
    
    
    
    
    
    
    
    
    (1,630
    )
    
    
    (1,630
    )Acquisition costs
    
    
    
    
    
    
    
    
    
    
    (54
    )
    
    
    (54
    )Operating income (loss)
    
    
    41,006
    
    
    
    57,365
    
    
    
    (59,172
    )
    
    
    39,199Investment income
    
    
    
    
    
    
    
    
    
    
    1,222
    
    
    
    1,222Other charges
    
    
    
    
    
    
    
    
    
    
    (6,385
    )
    
    
    (6,385
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (9,500
    )
    
    
    (9,500
    )Income (loss) before income taxes
    
    
    41,006
    
    
    
    57,365
    
    
    
    (73,835
    )
    
    
    24,536Goodwill, net of amortization
    
    
    41,152
    
    
    
    174,234
    
    
    
    
    
    
    
    215,386
 4. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss), including the components of other
comprehensive income (loss), are as follows: For The Three
    
    For The NineMonths Ended
    
    Months EndedSept. 30,
    
    Sept. 30,
    
    Sept. 30,
    
    Sept. 30,2004
    
    2003
    
    2004
    
    2003(In thousands)
    
    (In thousands)Net income
    
    $
    5,045
    
    
    $
    3,632
    
    
    $
    13,130
    
    
    $
    15,212Other comprehensive income:Unrealized gain from investments:Unrealized gains (losses)
    
    
    (655
    )
    
    
    (57
    )
    
    
    (845
    )
    
    
    136Related tax expense
    
    
    249
    
    
    
    22
    
    
    
    321
    
    
    
    (52
    )Net
    
    
    (406
    )
    
    
    (35
    )
    
    
    (524
    )
    
    
    84Foreign currency translation adjustments:Unrealized losses
    
    
    (36
    )
    
    
    
    
    
    
    (36
    )
    
    
    Pension plan:Unrealized losses
    
    
    
    
    
    
    (1,397
    )
    
    
    
    
    
    
    (1,397
    )Total other comprehensive loss
    
    
    (442
    )
    
    
    (1,432
    )
    
    
    (560
    )
    
    
    (1,313
    )Comprehensive income
    
    $
    4,603
    
    
    $
    2,200
    
    
    $
    12,570
    
    
    $
    13,899
 The components of accumulated other comprehensive loss are as follows: Foreign
    
    
    
    
    
    AccumulatedUnrealized
    
    Currency
    
    Unrealized
    
    OtherLosses
    
    Translation
    
    Losses
    
    ComprehensivePension plan
    
    Adjustments
    
    On Securities
    
    Loss(in thousands)Balance at September 30, 2004
    
    $
    (866
    )
    
    $
    (708
    )
    
    $
    (704
    )
    
    $
    (2,278
    )Balance at December 31, 2003
    
    $
    (866
    )
    
    $
    (672
    )
    
    $
    (180
    )
    
    $
    (1,718
    )
 5. ACQUISITIONS On February 2, 2004, the Company acquired all the issued and outstanding
common stock of Triplex Direct Marketing Corp. (Triplex), a provider of
direct marketing and database marketing services to nonprofit and catalog
customers. The total purchase price was $7.9 million including acquisition
costs of $0.3 million, of which, $6.1 million was payable in cash at closing
and the remaining $1.5 million will be payable on February 2, 2005 if Triplex
satisfies all its representations, warranties, covenants and agreements. The
purchase price for the acquisition has been preliminarily allocated to current
assets of $2.4 million, property and equipment of $0.7 million, current
liabilities of $2.4 million, and goodwill of $5.7 million. The acquisition has
been accounted for under the purchase method of accounting, and accordingly,
the operating results of Triplex have been included in the Companys financial
statements since the date of acquisition. 9




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On June 4, 2004, the Company acquired all the issued and outstanding
common stock of Edith Roman Associates, Inc., Database Direct, Inc. and E-Post
Direct, Inc. (collectively Edith Roman), a provider of list brokerage and
list management services, data processing services and email marketing
services. The total purchase price was $13.4 million including acquisition
costs of $0.2 million, of which, $6.6 million was payable in cash at closing
and the remaining $6.6 million represented as a note payable in the
accompanying consolidated balance sheet will be payable on June 4, 2005. The
transaction is subject to purchase price adjustment represented by an
adjustment for finalized working capital, net sales and other contingent items
specified within the purchase agreement. The purchase price for the acquisition
has been preliminarily allocated to current assets of $11.5 million, property
and equipment of $0.5 million, current liabilities of $9.6 million, other
liabilities of $0.5 million and goodwill of $11.5 million. The acquisition has
been accounted for under the purchase method of accounting, and accordingly,
the operating results of Edith Roman have been included in the Companys
financial statements since the date of acquisition. On June 9, 2004, the Company acquired all the issued and outstanding
common stock of OneSource Information Services, Inc. (OneSource). OneSource
offers a global database of over 1.7 million of the largest businesses
worldwide. This database is deep in content. It also includes financial
information and other public information. OneSources primary products, the
OneSource® Business BrowserSM products, are password-protected,
subscription-based products that provide sales, marketing, finance, and
management professionals and consultants with industry and company profiles,
research reports, media accounts, executive listings and biographies, and
financial information on over 1.7 million public and private companies.
OneSource customers access this information over the Internet using standard
Web browsers. The total purchase price was $109.4 million, comprised of cash paid for
the outstanding common stock of OneSource of $104.6 million, a merger agreement
termination fee associated with the acquisition of $3.0 million and
acquisition-related costs of $1.8 million. Additionally, the Company paid $2.2
million for bank financing fees associated with the transaction recorded as
deferred financing costs. The purchase price for the acquisition has been
preliminarily allocated to current assets of $28.2 million, property and
equipment of $5.6 million, other assets of $1.5 million, current liabilities of
$19.0 million (including $13.7 million of deferred revenue), other liabilities
of $17.8 million and goodwill and other intangibles of $109.1 million. Goodwill
and other identified intangibles include: developed technology of $9.0 million
(life of 5 years), Corptech database of $2.6 million (life of 3 years),
customer lists of $16.3 million (life of 6 years), tradenames and trademarks of
$3.5 million (life of 20 years) and goodwill of $77.7 million. The acquisition
has been accounted for under the purchase method of accounting, and
accordingly, the operating results of OneSource have been included in the
Companys financial statements since the date of acquisition. In connection with the preliminary purchase price allocation for
OneSource, the Company recorded deferred revenue of $13.7 million, which is
less than the carrying value recorded by OneSource at the time of the
acquisition. In accordance with EITF Issue 01-03 Accounting in a Purchase
Business Combination for Deferred Revenue of an Acquiree, the Company recorded
deferred revenue at the fair value of the assumed liability for fulfillment of
customer obligations plus a normal profit margin. Assuming Triplex, OneSource and Edith Roman had been acquired on January
1, 2003 and included in the accompanying consolidated statements of operations,
unaudited pro forma consolidated net sales, net income and net income per share
would have been as follows: For the three months ended
    
    For the nine months endedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003(In thousands, except per share amounts)(unaudited)Net sales
    
    $
    90,172
    
    
    $
    94,048
    
    
    $
    285,895
    
    
    $
    283,411Net income
    
    $
    5,045
    
    
    $
    1,707
    
    
    $
    6,805
    
    
    $
    7,298Basic earnings per share
    
    $
    0.10
    
    
    $
    0.03
    
    
    $
    0.13
    
    
    $
    0.14Diluted earnings per share
    
    $
    0.10
    
    
    $
    0.03
    
    
    $
    0.13
    
    
    $
    0.14
 The pro forma information provided above does not purport to be indicative
of the results of operations that would actually have resulted if the
acquisitions were made as of those dates or of results that may occur in the
future. Pro forma net income includes adjustments for interest expense,
amortization of intangible assets, income taxes and valuation of deferred
revenue and deferred commission costs for OneSource. 10




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6. CREDIT FACILITY On March 25, 2004, the Company financed a new Senior Secured Credit
Facility administered by Wells Fargo Bank, N.A. The new credit facility
provides for a $120.0 million Term A loan with a maturity date of March 2009
and a $50.0 million revolving line of credit with a maturity date of March
2007. On June 4, 2004, the Company negotiated an amended and restated Senior
Secured Credit Facility (the Credit Facility) administered by Wells Fargo
Bank, N.A. in conjunction with the acquisition of OneSource. The Credit
Facility provides for a new $80.0 million Term B loan with a maturity date of
June 2010. The Credit Facility provides for grid-based interest pricing based upon
the Companys consolidated total leverage ratio and ranges from base rate plus
1.00% to 1.75% for base rate loans and LIBOR plus 2.00% to 2.75% for use of the
revolving credit facility. The term loans interest rates range from base rate
plus 1.50% to 2.00% or LIBOR plus 2.50% to 3.00%. Substantially all of the
assets of the Company are pledged as security under the terms of the Credit
Facility. At September 30, 2004, the Term A loan had a balance of $110.0
million bearing an interest rate of 4.17%, the Term B loan had a balance of
$79.8 million bearing an interest rate of 4.63% and $39.6 million was available
under the revolving line of credit. The Company is subject to certain financial covenants in the Credit
Facility, including minimum consolidated fixed charge coverage ratio, maximum
consolidated total leverage ratio and minimum consolidated net worth.
The Company is in compliance with all restrictive covenants
in the Credit Facility. 7. NON-CASH STOCK COMPENSATION EXPENSE At September 30, 2004, the Company has a nonqualified stock option plan.
The Company applies the intrinsic value-based method of Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations in accounting for its stock option plan. No stock-based
employee compensation cost is reflected in net income, as all options granted
under the plan had an exercise price equal to the market value of the
underlying common stock on the date of grant. The Companys pro forma net
income and earnings per share would have been as indicated below had the fair
value of all option grants been charged to salaries, wages, and benefits in
accordance with SFAS No. 123, Accounting for Stock-Based Compensation: Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003(in thousands, except
    
    (in thousands, exceptper share amounts)
    
    per share amounts)Net income, as reported
    
    $
    5,045
    
    
    $
    3,632
    
    
    $
    13,130
    
    
    $
    15,212Less: Total
stock-based employee
compensation expense
determined under fair
value based method,
net of taxes
    
    
    584
    
    
    
    527
    
    
    
    1,869
    
    
    
    1,747Net income, pro forma
    
    $
    4,461
    
    
    $
    3,105
    
    
    $
    11,261
    
    
    $
    13,465Earnings per share:Basic  as reported
    
    $
    0.10
    
    
    $
    0.07
    
    
    $
    0.25
    
    
    $
    0.30Basic  pro forma
    
    $
    0.08
    
    
    $
    0.06
    
    
    $
    0.21
    
    
    $
    0.26Diluted  as reported
    
    $
    0.10
    
    
    $
    0.07
    
    
    $
    0.25
    
    
    $
    0.30Diluted  pro forma
    
    $
    0.08
    
    
    $
    0.06
    
    
    $
    0.21
    
    
    $
    0.26
 The above pro forma results are not likely to be representative of the
effects on reported net income for future years since options vest over several
years and additional awards generally are made each year. The fair value of the weighted average of option grants is estimated as of
the date of grant using the Black-Scholes option-pricing model with the
following assumptions used for grants in 2004: volatility of 69.48%, dividend
yield of 0%, risk free interest rate of 3.92% and expected lives of 5 years. Compensation cost for stock options and warrants granted to non-employees
and vendors is measured based upon the fair value of the stock option or
warrant granted. When the performance commitment of the non-employee or vendor
is not complete as of the grant date, the Company estimates the total
compensation cost using a fair value method at the end of each period.
Generally, the final measurement of compensation cost occurs when the
non-employee or vendors related performance commitment is complete. Changes,
either increases or decreases, in the estimated fair value of the options
between the date of the grant and the final vesting of the options 11




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result in a change in the measure of compensation cost for the stock
options or warrants. Compensation cost is recognized as expense over the
periods in which the benefit is received. The Company previously granted non-qualified stock options to non-employee
consultants of the Company in connection with consulting agreements executed by
the Company. The options vest evenly over four years and have a five-year life.
The fair value of the options were estimated, as of the grant date, using the
Black-Scholes option pricing model and are updated at each balance sheet date.
As such, the Company has recorded a non-cash charge of $595 thousand and $145
thousand related to stock options granted to the consultants during the nine
months ended September 30, 2004 and 2003, respectively. The charges were
recorded as an addition to paid-in capital. 8. RESTRUCTURING CHARGES During the quarter ended September 30, 2004, the Company recorded
restructuring charges due to workforce reductions of $766 thousand. The charges
included involuntary employee separation costs (severance) for 69 employees in
administration, information technology, order production and sales. During the
nine months ended September 30, 2004, the Company recorded restructuring
charges totaling $2.4 million for 356 employees. During the nine months ended
September 30, 2004, the Company recorded $1.3 million of severance liabilities
in conjunction with the acquisition of OneSource and Edith Roman in June 2004
that was included in the determination of purchase price for each of these
acquisitions. During the quarter ended September 30, 2003, the Company recorded
restructuring charges due to workforce reductions of $645 thousand. The charges
included involuntary employee separation costs for 64 employees in
administration, sales support and marketing functions. During the nine months
ended September 30, 2003, the Company recorded restructuring charges totaling
$1.6 million for 179 employees. The following table summarizes activity related to the restructuring
charges recorded by the Company during the nine months ended September 30,
2004, including the liability accrual balances: Amounts recordedDecember 31,
    
    Amounts
    
    as part of
    
    Amounts
    
    Sept. 30,2003
    
    expensed
    
    acquisitions
    
    paid
    
    2004(In thousands)Restructuring accrual
    
    $
    247
    
    
    $
    2,388
    
    
    $
    1,277
    
    
    $
    3,005
    
    
    $
    907
 9. ACQUISITION COSTS The Company recorded costs of $79 thousand and $0 thousand during the
quarter ended September 30, 2004 and 2003, respectively, and costs of $321
thousand and $54 thousand during the nine months ended September 30, 2004 and
2003, respectively, for general and administrative expenses incurred in
connection with the integration of acquired companies and for costs associated
with potential acquisition efforts. These costs are not direct costs of
acquisition and therefore cannot be capitalized as part of the purchase price
of the acquisitions. 10. OTHER CHARGES During the nine months ended September 30, 2004, the Company wrote-off
deferred financing costs of $0.1 million related to the prior credit facility
as a result of the financing on March 25, 2004 of the Credit Facility described
in Note 6. During the nine months ended September 30, 2004, the Company redeemed the
remainder of its outstanding 9 1/2% Senior Subordinated Notes of $30.0 million
at a premium of 4.75% to face amount. The premium paid on the redemption was
$1.5 million, representing amounts paid in excess of the carrying value of the
debt. As part of the redemption, the Company recorded charges of $0.6 million
for net unamortized debt issue costs related to the Senior Subordinated Notes. During the nine months ended September 30, 2003, the Company purchased
$67.0 million of its 9 1/2% Senior Subordinated Notes of which $11.5 million
were from the Chief Executive Officer. All purchases of 9 1/2% Senior
Subordinated Notes occurred at the same price and under the same terms. As part
of these purchases, the Company recorded charges of $1.6 million for related
net unamortized debt issue costs and $3.1 million for amounts paid in excess of
the carrying value of the debt. 12




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##### Table of Contents



During the nine months ended September 30, 2003, the Company expensed $0.8
million for net unamortized debt issue costs and $0.8 million in bank fees
associated with the refinancing of the credit facility. 11. GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets consist of the following: September 30,
    
    December 31,2004
    
    2003(In thousands)Goodwill
    
    $
    358,492
    
    
    $
    261,398Less accumulated amortization
    
    
    59,012
    
    
    
    59,012$
    299,480
    
    
    $
    202,386Other intangible assets:Non-compete agreements
    
    
    13,534
    
    
    
    13,534Core technology
    
    
    13,753
    
    
    
    4,800Customer base
    
    
    24,633
    
    
    
    8,372Trade names
    
    
    19,259
    
    
    
    15,815Purchased data processing software
    
    
    73,478
    
    
    
    73,478Acquired database costs
    
    
    21,591
    
    
    
    19,000Perpetual software license agreement, net
    
    
    2,333
    
    
    
    2,933Software development costs, net
    
    
    5,628
    
    
    
    2,128Database development costs, net
    
    
    392
    
    
    
    149Deferred financing costs
    
    
    11,122
    
    
    
    8,216185,753
    
    
    
    148,425Less accumulated amortization
    
    
    115,072
    
    
    
    103,202$
    70,681
    
    
    $
    45,223
 12. PROPERTY AND EQUIPMENT Property and equipment consist of the following: September 30,
    
    December 31,2004
    
    2003(In thousands)Property and equipment
    
    $
    133,687
    
    
    $
    122,320Less accumulated depreciation and amortization
    
    
    90,235
    
    
    
    81,336$
    43,452
    
    
    $
    40,984
 13. 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. 13




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##### Table of Contents



ITEM 2. infoUSA INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS This discussion and analysis contains forward-looking statements,
including without limitation statements in the discussion of comparative
results of operations, accounting standards 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 that May Affect Operating Results below.
The Company assumes no obligation to update the forward-looking statements or
such factors. GENERAL Overview Products and Services infoUSA is the leading compiler of several proprietary databases. To name
a few, they are as follows: 1. 14 Million US and Canadian Businesses 2. 220 Million US and Canadian Residents 3. 60 Million Homeowners 4. 17 Million New Movers per year 5. 2.6 Million New Businesses per year 6. 5.2 Million New Homeowners per year 7. 3.2 Million Executives 8. 575,000 Doctors All of the above databases are compiled under one roof in Papillion,
Nebraska. We employ over 600 full time people to compile and update the
databases from thousands of public sources such as yellow pages, white pages,
newspapers, incorporation records, real estate deed transfers and various other
sources. For the business database, we make over 20 million phone calls a year to
verify the name of the owner or key executive, their address, number of
employees, number of PCs, fax numbers, e-mail addresses and other information. The databases change by roughly 65% per year. We spend over $50 million a
year to update these databases regularly. We believe that we have the finest
and most accurate databases in the industry. We believe there is no other
company that compiles and updates so many databases all under one roof. We have also developed proprietary software for direct marketing
applications, database marketing applications, e-mail marketing applications,
telemarketing applications and other sophisticated modeling applications.
Our proprietary software enhances the value of our databases to the customer. Distribution Strategy infoUSA has over 4 million customers who have used our products and
services. The principal use of our databases is to find new customers and grow
their sales. That is why the logo of infoUSA bears the mark Sales Solutions. For our large clients, we distribute our databases and services through
the Donnelley Group. Donnelley Marketing, the flagship Company
within the Donnelley Group, was acquired by infoUSA in 1999, and
has been a leader in this space since 1917. The Donnelley Group has a sales force of over
200 account executives that call on Fortune 1000 companies. These clients have
a sophisticated need for databases, database marketing, and now e-mail
marketing. Under the Donnelley Group we have seven different
companies that specialize in their own respective markets. These companies are Donnelley
Marketing, Walter Karl, Edith Roman, Catalog Vision, Triplex, Yesmail and
OneSource. OneSource is the only company, which has a true global database of
large businesses. This database is used by multinational companies for market
research, prospect development and other modeling and research applications. infoUSA has an extensive distribution channel into medium sized
businesses, small businesses, small office/home office (SOHO) markets and sales
executives. We sell directly to these markets. We employ several distribution
channels such as direct mail, telemarketing,
e-mail marketing, and our own sales force. We have over 600 account executives
that have developed a relationship with these clients. 14




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##### Table of Contents



Subscription Sales Model In
the past, infoUSA sold sales leads and mailing lists on an
as
needed basis. We realized that our customers need this information every day.
We developed a new service called Sales Genie for the small business market.
This is an internet based database delivery service. All of our databases can
be accessed on a subscription basis for a flat price of $250.00 per month.
Sales Genie also has a basic contact management software and mapping ability.
A small business can get all the sales leads and mailing lists for only $250.00
per month. We have also developed SalesLeadsUSA for one person businesses and sales
executives. This service offers databases with limited search criteria but
still offers unlimited sales leads and mailing lists for $75.00 per month. The
Company also launched an unlimited business credit report service
called Credit.net. A customer can obtain unlimited business credit reports for
only $50.00 per month. This migration from one time sales to subscription based sales has enabled
us to have a better relationship with our customers, more predictable revenue
and the ability to offer more services to our customers in the arena of sales
solutions. Financial Performance Operating income for the nine months ended September 30, 2004 was $30.0
million, or 12% of net sales, down from $39.2 million, or 17% of net sales, for
the same period in 2003. The primary reasons for the decline in
operating income were (i) higher sales and marketing
expenditures in the first half of 2004 versus last year and
(ii) deferral of approximately $5.2 million of revenues in
the third quarter due to accounting for subscription products. Mergers and Acquisitions Internal
revenue growth is the primary objective of the Company. However, we
still look for strategic acquisitions, which are opportunistic in
nature. We like to acquire companies where we can get better than 25%
operating margin. During 2002 and 2003, the Company acquired
DoubleClicks email deployment business, ClickAction®,
Yesmail® and Markado®. As described in the notes to the
accompanying financial statements, the Company acquired the following
entities in 2004: (i) Triplex, a provider of direct marketing
and database marketing services to nonprofit and catalog customers;
(ii) Edith Roman®, a provider of list brokerage and list
management services, data processing services and email marketing
services; and (iii) OneSource, a provider of a global database
of over 1.7 million of the largest business worldwide. This
database is deep in content and includes financial information and
other public information. The Company has systematically integrated the operations of the acquired
companies into existing operations of the Company. In most cases, the results
of operations for these acquired activities are no longer separately accounted
for from existing activities. The Company cannot report the results of the
operations of acquired companies upon completion of the integration as the
results are commingled with existing results. Additionally, upon integration
of the 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. 15




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##### Table of Contents



RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, selected
financial information and other data. The amounts and related percentages may
not be fully comparable due to acquisitions. THREE MONTHS
    
    THREE MONTHS
    
    NINE MONTHS
    
    NINE MONTHSENDED
    
    ENDED
    
    ENDED
    
    ENDEDSept. 30, 2004
    
    Sept. 30, 2003
    
    Sept. 30, 2004
    
    Sept. 30, 2003CONSOLIDATED STATEMENT OF OPERATIONS
DATA:Net sales
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Costs and expenses:Database and production costs
    
    
    31
    
    
    
    28
    
    
    
    30
    
    
    
    28Selling, general and administrative
    
    
    48
    
    
    
    47
    
    
    
    48
    
    
    
    44Depreciation
    
    
    4
    
    
    
    5
    
    
    
    4
    
    
    
    5Amortization
    
    
    5
    
    
    
    4
    
    
    
    5
    
    
    
    4Non-cash stock compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Litigation settlement charge
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    1Restructuring charges
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Acquisition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    88
    
    
    
    87
    
    
    
    88
    
    
    
    83Operating income
    
    
    12
    
    
    
    13
    
    
    
    12
    
    
    
    17Other expense, net
    
    
    (3
    )
    
    
    (5
    )
    
    
    (3
    )
    
    
    (6
    )Income before income taxes
    
    
    9
    
    
    
    7
    
    
    
    9
    
    
    
    11Income taxes
    
    
    3
    
    
    
    2
    
    
    
    3
    
    
    
    4Net income
    
    
    6
    %
    
    
    5
    %
    
    
    6
    %
    
    
    7
    %
 OTHER DATA: (in thousands)
    
    (in thousands)SALES BY SEGMENT:infoUSA Group
    
    $
    32,814
    
    
    $
    37,902
    
    
    $
    111,104
    
    
    $
    117,556Donnelley Group
    
    
    57,358
    
    
    
    39,477
    
    
    
    143,673
    
    
    
    114,734Total
    
    $
    90,172
    
    
    $
    77,379
    
    
    $
    254,777
    
    
    $
    232,290SALES BY SEGMENT AS A PERCENTAGE OF
NET SALES:infoUSA Group
    
    
    36
    %
    
    
    49
    %
    
    
    44
    %
    
    
    51
    %Donnelley Group
    
    
    64
    
    
    
    51
    
    
    
    56
    
    
    
    49Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Net sales Net sales for the quarter ended September 30, 2004 were $90.2 million, an
increase of 17% from $77.4 million for the same period in 2003. Net sales for
the nine months ended September 30, 2004 were $254.8 million, an increase of
10% from $232.3 million for the same period in 2003. Net sales of the infoUSA Group segment for the quarter ended September 30,
2004 were $32.8 million, a 13% decrease from $37.9 million for the same period
in 2003. Net sales of the infoUSA Group segment for the nine months ended
September 30, 2004 were $111.1 million, a 6% decrease from $117.6 million for
the same period in 2003. The decrease in net sales is principally due the
deferral of revenue totaling $5.2 million during the quarter and nine month
period ended September 30, 2004 related to the sale of subscription-based
products. The infoUSA Group segment principally engages in the selling of sales lead
generation and consumer DVD products to small to medium sized businesses, small
office and home office businesses and individual consumers. This segment also
includes the sale of content via the Internet. Historically, this group has
principally offered one-time sales leads products, although the group continues
to 16




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migrate a growing number of customers to subscription-based products.
During the quarter ended September 30, 2004, the Company began to sell
subscription products and to defer the revenues associated with the sale of
these subscription-based products. Conversions from one-time sales to this
subscription format will cause this group to experience short-term reductions
in reported revenue due to the deferred revenue recognition practices
associated with the sale of these types of products. Sales of
subscription-based products require the Company to recognize revenues over the
subscription period instead of at the time of sale. Net sales of the Donnelley Group segment for the quarter ended September
30, 2004 were $57.4 million, a 45% increase from $39.5 million for the same
period in 2003. Net sales of the Donnelley Group segment for the nine months
ended September 30, 2004 were $143.7 million, a 25% increase from $114.7
million for the same period in 2003. The increase was principally due to the
acquisition of Triplex in February 2004 and Edith Roman and OneSource in June
2004. The Donnelley Group segment principally engages in the selling of data
processing services, Web-based business and financial information products and
services, licensed databases, database marketing solutions, e-mail marketing
solutions and list brokerage and list management services to large companies.
This segment includes the licensing of databases for Internet directory
assistance services. Database and production costs Database and production costs for the quarter ended September 30, 2004
were $27.6 million, or 31% of net sales, compared to $21.4 million, or 28% of
net sales for the same period in 2003. Database and production costs for the
nine months ended September 30, 2004 were $76.3 million, or 30% of net sales,
compared to $64.6 million, or 28% of net sales for the same period in 2003. The
increase in database and production costs principally relates to the
acquisition of Triplex in February 2004 and OneSource in June 2004. These
acquired companies historically had higher database and production costs
structures, expressed as a percentage of net sales, than the Companys existing
businesses. Selling, general and administrative expenses Selling, general and administrative expenses for the quarter ended
September 30, 2004 were $43.0 million, or 48% of net sales, compared to $36.8
million, or 47% of net sales for the same period in 2003. Selling, general and
administrative expenses for the nine months ended September 30, 2004 were
$123.2 million, or 48% of net sales, compared to $103.8 million, or 44% of net
sales for the same period in 2003. The increase in selling, general and
administrative expenses principally relates to the Companys planned increase
in direct marketing costs and the addition of approximately 200 sales staff
beginning during the second half of 2003. Additionally, the increase is due to
the acquisition of companies during 2004 including Triplex, Edith Roman and
OneSource. These acquired companies historically had higher selling, general
and administrative cost structures, expressed as a percentage of net sales,
than the Companys existing businesses. Depreciation expense Depreciation expense for the quarter ended September 30, 2004 was $3.5
million, or 4% of net sales, compared to $3.7 million, or 5% of net sales for
the same period in 2003. Depreciation expense for the nine months ended
September 30, 2004 was $10.4 million, or 4% of net sales, compared to $11.3
million, or 5% of net sales for the same period in 2003. Amortization expense Amortization expense for the quarter ended September 30, 2004 was $4.4
million, or 5% of net sales, compared to $3.3 million, or 4% of net sales for
the same period in 2003. Amortization expense for the nine months ended
September 30, 2004 was $11.5 million, or 5% of net sales, compared to $10.0
million, or 4% of net sales, for the same period in 2003. Amortization expense
is expected to increase as a percentage of net sales as identified intangible
assets recorded as part of the acquisition of OneSource totaling $31.3 million
will be amortized. The Company adopted SFAS No. 142, Goodwill and Other
Intangible Assets, as of January 1, 2002. SFAS No. 142 requires the Company to
complete an annual impairment test on goodwill and other intangible assets with
an indefinite life rather than record amortization expense on those assets. The
Company last completed impairment tests as of October 31, 2003, as required by
SFAS 142, and established that no impairment exists. Non-cash stock compensation expense During the quarter ended September 30, 2004, the Company recorded non-cash
charges of $(45) thousand, compared to $76 thousand for the same period in
2003. During the nine months ended September 30, 2004, the Company recorded
non-cash charges of $595 thousand, compared to $145 thousand for the same
period in 2003. These charges represent non-cash stock compensation 17




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expense related to non-employee consulting agreements. The Company will
incur additional non-cash compensation expense for these consultants options
during the vesting period of those options. The amount of compensation expense
will be affected by changes in the fair value of the Companys common stock and
interest rates. Litigation settlement charge On May 14, 2002, a principal of one of the acquisitions made by the
Company in 1996 was awarded $1.7 million by an arbitrator for settlement of a
dispute regarding exercise of stock options issued by the Company. During the
quarter ended September 30, 2003, the Company determined that it was not likely
to be successful in its appeal of the dispute and recorded a settlement charge
of $1.7 million. Restructuring costs The Company recorded restructuring charges (severance) during the quarters
ended September 30, 2004 and 2003 of $0.8 million and $0.6 million,
respectively, related to workforce reductions as a part of the Companys
continuing strategy to reduce unnecessary costs and focus on core operations.
Restructuring charges recorded during the nine months ended September 30, 2004
and 2003 were $2.4 million and $1.6 million, respectively. The workforce
reduction charges included involuntary employee separation costs during the
nine months ended September 30, 2004 and 2003 for approximately 356 and 179
employees, respectively. Acquisition costs The Company recorded integration-related costs during the quarters ended
September 30, 2004 and 2003 of $79 thousand and $0 thousand, respectively.
Acquisition costs recorded during the nine months ended September 30, 2004 and
2003 were $321 thousand and $54 thousand, respectively. Acquisition costs
include costs related to unsuccessful acquisition efforts and
integration-related costs including general and administrative costs,
information system conversion costs and other direct integration-related
charges. These costs were not directly related to the recent acquisitions of
various companies, and therefore could not be capitalized as part of the
acquisitions. Operating income Including the factors previously described, the Company had operating
income of $10.8 million, or 12% of net sales during the quarter ended September
30, 2004, compared to operating income of $9.7 million, or 13% of net sales for
the same period in 2003. The Company had operating income of $30.0 million, or
12% of net sales during the nine months ended September 30, 2004, compared to
operating income of $39.2 million, or 17% for the same period in 2003. The
decrease in operating income as a percentage of net sales is a result of the
following items: 1) increased operating expenses represented as percentage of net sales associated with companies acquired in
2004 including Triplex, Edith Roman and OneSource, and 2) deferred revenue
associated with the sale of subscription-based products described in the
section net sales above. Operating income for the infoUSA Group segment for the quarter ended
September 30, 2004 was $9.8 million, or 30% of net sales, as compared to $10.4
million, or 28% of net sales for the same period in 2003. Operating income for
the infoUSA Group segment for the nine months ended September 30, 2004 was
$35.6 million, or 32% of net sales, as compared to $41.0 million, or 35% of net
sales for the same period in 2003. The decrease in operating income is
principally due to the effect of item 2 described above. Operating income for the Donnelley Group segment for the quarter ended
September 30, 2004 was $21.6 million, or 38% of net sales, as compared to $20.0
million, or 51% of net sales for the same period in 2003. Operating income for
the Donnelley Group segment for the nine months ended September 30, 2004 was
$59.6 million, or 41% of net sales, as compared to $57.4 million, or 50% of net
sales for the same period in 2003. The decrease in operating income as a
percentage net sales is principally due to increased operating expenses
represented as percentage of net sales associated with companies acquired
during 2004 including Triplex, Edith Roman and OneSource. Other income (expense), net Other expense, net was $(2.6) million, or 3% of net sales, and $(4.1)
million, or 5% of net sales, for the quarters ended September 30, 2004 and
2003, respectively. Other expense, net was $(8.9) million, or 3% of net sales,
and $(14.7) million, or 6% of net sales, for 18




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the nine months ended September 30, 2004 and 2003, respectively. Other
income (expense), net is comprised of interest expense, investment income and
other income or expense items, which do not represent components of operating
income and operating expense of the Company. Interest expense was $2.4 million and $2.2 million for the quarters ended
September 30, 2004 and 2003, respectively. Interest expense was $6.4 million
and $9.5 million for the nine months ended September 30, 2004 and 2003,
respectively. The decrease is principally due to lower interest rates on the
Companys former credit facility refinanced in May 2003, the reduction in the
amount of 9 1/2 % Senior Subordinated Notes outstanding and favorable interest
rates. Investment income (loss) was $(177) thousand and $394 thousand, for the
quarters ended September 30, 2004 and 2003, respectively and $(219) thousand
and $1,222 thousand for the nine months ended September 30, 2004 and 2003,
respectively. During the nine months ended September 30, 2004, the Company wrote-off
deferred financing costs of $0.1 million related to the prior credit facility
as a result of the financing on March 25, 2004 of the Credit Facility described
in Note 6. During the nine months ended September 30, 2004 the Company redeemed the
remainder of its outstanding 9 1/2% Senior Subordinated Notes of $30.0 million
at a premium of 4.75% to face amount. The premium paid on the redemption was
$1.5 million, representing amounts paid in excess of the carrying value of the
debt. As part of the redemption, the Company recorded charges of $0.6 million
for net unamortized debt issue costs related to the Senior Subordinated Notes. During the nine months ended September 30, 2003, the Company purchased
$67.0 million of its 9 1/2% Senior Subordinated Notes of which $11.5 million
were from the Chief Executive Officer. All purchases of 9 1/2% Senior
Subordinated Notes occurred at the same price and under the same terms. As part
of these purchases, the Company recorded charges of $1.6 million for related
net unamortized debt issue costs and $3.1 million for amounts paid in excess of
the carrying value of the debt. During the nine months ended September 30, 2003, the Company expensed $0.8
million for net unamortized debt issue costs and $0.8 million in bank fees
associated with the refinancing of the credit facility. Income taxes A provision for income taxes of $3.1 million and $2.0 million was recorded
during the quarters ended September 30, 2004 and 2003, respectively and $8.0
million and $9.3 million for the nine months ended September 30, 2004 and 2003,
reflecting an effective income tax rate of approximately 38%. Liquidity and Capital Resources Overview Our principal sources of liquidity are cash flow provided by our operating
activities, our revolving credit facilities, and cash and cash equivalents on
hand. Our ability to generate cash from our operations is one of our
fundamental financial strengths. We use cash flows from operations, along with
borrowings, to fund capital expenditures, pursue growth initiatives, make
acquisitions and retire outstanding indebtedness. The Company is not subject to significant variability in cash flows from
operations. The Companys sales (including those subject to deferred revenue
recognition practices), cash receipts and cash disbursements occur fairly
evenly through the course of a fiscal year. The Company is not subject to
significant variations due to seasonalities in business lines. General Information- Debt Instruments, Financial Covenants and Sources and
Uses of Cash On March 25, 2004, the Company financed a new Senior Secured Credit
Facility administered by Wells Fargo Bank, N.A. The new credit facility
provides for a $120.0 million Term A loan with a maturity date of March 2009
and a $50.0 million revolving line of credit with a maturity date of March
2007. On June 4, 2004, the Company negotiated an amended and restated Senior
Secured Credit Facility (the Credit Facility) administered by Wells Fargo
Bank, N.A. in conjunction with the acquisition of OneSource. The Credit
Facility provides for a new $80.0 million Term B loan with a maturity date of
June 2010. 19




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The Credit Facility provides for grid-based interest pricing based upon
the Companys consolidated total leverage ratio and ranges from base rate plus
1.00% to 1.75% for base rate loans and LIBOR plus 2.00% to 2.75% for use of the
revolving credit facility. The term loans interest rates range from base rate
plus 1.50% to 2.00% or LIBOR plus 2.50% to 3.00%. Substantially all of the
assets of the Company are pledged as security under the terms of the Credit
Facility. At September 30, 2004, the Term A loan had a balance of $110.0
million bearing an interest rate of 4.17%, the Term B loan had a balance of
$79.8 million bearing an interest rate of 4.63% and $39.6 million was available
under the revolving credit facility. The Company is subject to certain financial covenants in the Credit
Facility, including minimum consolidated fixed charge coverage ratio, maximum
consolidated total leverage ratio and minimum consolidated net worth. The
fixed charge coverage ratio and leverage ratio financial covenants are based on
EBITDA (Earnings before interest expense, income taxes, depreciation and
amortization), as adjusted, providing for adjustments to EBITDA for certain
agreed upon items including investment income (loss), other charges (gains),
asset impairments, non-cash stock compensation expense and other items defined
within the Credit Facility. The Company was in compliance with all restrictive
covenants of the Credit Facility as of September 30, 2004. The Company believes that its existing sources of liquidity and cash
generated from operations will satisfy the Companys projected working capital,
debt repayments and other cash requirements for at least the next 12 months.
Acquisitions of other technologies, products or companies, or internal product
development efforts may require the Company to obtain additional equity or debt
financing, which may not be available or may be dilutive. Selected Consolidated Statements of Cash Flows Information As of September 30, 2004, the Companys principal sources of liquidity
included $39.6 million available under the Senior Secured Credit Facility. As
of September 30, 2004, the Company had a working capital deficit of $42.9
million. Net cash provided by operating activities during the nine months ended
September 30, 2004 totaled $45.8 million compared to $37.5 million for the same
period in 2003. During the nine months ended September 30, 2004, the Company spent $3.7
million for additions of property and equipment and $1.9 million related to
software and database development costs, compared to $4.7 million and $0.7
million, respectively during the same period in 2003. During the nine months ended September 30, 2004, the Company spent a total
of $109.8 million for acquisitions of businesses, net of cash acquired of $19.3
million. The Company paid $6.2 million for Triplex (net of cash acquired of
$0.2 million) including capitalized acquisition costs of $0.3 million. The
Company paid $12.3 million for Edith Roman (net of cash acquired of $1.2
million) including capitalized acquisition costs of $0.3 million. The Company
paid $91.3 million for OneSource (net of cash acquired of $17.9 million)
including capitalized acquisition costs of $1.6 million. During the nine months ended September 30, 2004, the Company borrowed a
total of $272.8 million in debt while making repayments on debt totaling $195.6
million during the same period. These amounts reflect activity for the
financing of the acquisitions of Triplex, Edith Roman and OneSource during
2004, the refinancing of the Companys Senior Secured Credit Facility in March
2004 and the redemption of the Companys 9 1/2% Senior Subordinated Notes in
April 2004. Selected Consolidated Balance Sheet Information Trade accounts receivable increased to $47.0 million at September 30, 2004
from $40.9 million at December 31, 2003. The increase is principally due to the
acquisition of OneSource in June 2004. The days sales outstanding (DSO)
ratio, excluding OneSource and list brokerage sales, for the nine months ended
September 30, 2004 was 46 days compared to 42 days for the same period in 2003. List brokerage trade accounts receivable increased to $21.3 million at
September 30, 2004 from $12.8 million at December 31, 2003. The increase is due
to the acquisition of Edith Roman in June 2004, which provides list brokerage
sales operations. Deferred marketing costs decreased to $2.6 million at September 30, 2004
from $5.5 million at December 31, 2003. The decrease is the result of the
Companys decreased spending during 2004 on direct marketing costs that are
subject to deferral and amortization. 20




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List brokerage trade accounts payable increased to $16.9 million at
September 30, 2004 from $9.5 million at December 31, 2003. The increase is due
to the acquisition of Edith Roman in June 2004, which provides list brokerage
sales operations. Accrued expenses increased to $7.0 million at September 30, 2004 from $0.8
million at December 31, 2003. The increase is principally due to the
acquisition of OneSource in June 2004 and accrued severance costs associated
with the various acquisitions during 2004 and the termination of existing
employees during 2004. Additionally, accrued expenses includes a hold-back
amount of $1.1 million related to the acquisition of Triplex which is scheduled
to be paid in January 2005. Deferred revenue increased to $44.1 million at September 30, 2004 from
$19.8 million at December 31, 2003. The increase is principally due to the
acquisition of OneSource in June 2004. Long-term debt, net of current portion increased to $187.7 million at
September 30, 2004 from $122.5 million at December 31, 2003. The net increase
is due to the financed acquisitions of Triplex, Edith Roman and OneSource
during 2004. Selected other balance sheet accounts including prepaid expenses, accounts
payable, and accrued payroll expenses increased (decreased) moderately from
their respective account balances at September 30, 2004 from their respective
account balances at December 31, 2003. The increase (decrease) in these account
balances is due to the acquisition of certain companies during 2004 and payment
timing differences related to various general operating expenses. Off-Balance Sheet Arrangements Other than rents associated with facility leasing arrangements, the
Company does not engage in off-balance sheet financing activities. Accounting Standards In January 2003, the FASB issued FASB Interpretation No. 46 (Revised),
Consolidation of Variable Interest Entities.FIN No. 46 (Revised) addresses
consolidation by business enterprises of certain variable interest entities.
The effective date for this Interpretation for the Company, as amended, was
March 31, 2004. The adoption of this Interpretation did not have an impact on
the financial statements of the Company. The Financial Accounting Standards Board (FASB) issued an exposure draft
on March 31, 2004 addressing accounting for share-based payments with the final
statement expected to be issued in the fourth quarter of 2004. The objective
of this proposed statement is to make one accounting standard available for
share-based payments that would require a company to recognize in its financial
statements the cost of employee services received in exchange for valuable
equity instruments issued, and liabilities incurred, to employees in
share-based payment transactions (e.g., stock options). For public entities,
the proposed statement would be applied prospectively for awards that are
granted, modified, or settled in any interim or annual period beginning after
June 15, 2005. Additionally, public entities would recognize compensation cost
for any portion of awards granted or modified after December 15, 1994, that is
not yet vested at the date the standard is adopted. If the Company adopts the
standard on July 1, 2005, it would be required to report in its financial
statements the share-based compensation expense for the last six months of 2005
and may choose to use the modified retrospective application method to restate
results for the two earlier interim periods. The FASB is encouraging companies
to adopt the proposed statement early and begin recognizing expense in the
first quarter of 2005. If the final statement is issued as proposed,
management anticipates that adopting the new statement will have a negative
impact of approximately two cents per share (three cents per share if the
modified retrospective application method is used) for the year ending December
31, 2005, representing the expense to be recognized from July 1, 2005 through
December 31, 2005 for the unvested portion of awards which were granted prior
to July 1, 2005. Inflation We do not believe that the rate of inflation has had a material effect on
our operating results. However, inflation could adversely affect our future
operating results if it were to result in a substantial weakening economic
condition. 21




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Factors That May Affect Operating Results Our Internet strategy. The
Internet is widely accepted by businesses all over the world. It is a
very fluid distribution channel for information. The Company has always used
the cutting edge technology to deliver its information to its customers.
infoUSA was the first database company to offer its products on magnetic media,
CD, DVD and also the Internet. Our Sales Genie, SalesLeadsUSA and other
products are now being offered on the Internet on a subscription basis. We
cannot guarantee that in the future that the Internet will be as prevalent as
it is now, but we believe this will be the primary method of delivery of
information. Our markets are highly competitive and many of our competitors have
greater resources than we do. The business and consumer marketing information industry in which we
operate is highly competitive. Intense competition could harm us by causing,
among other things, price reductions, reduced gross margins, and loss of market
share. Our competition includes: Acxiom, Experian (a subsidiary of Great
Universal Stores, P.L.C. (GUS)), Equifax, Harte-Hanks Communications, Inc.
and Dun & Bradstreet(C). In addition, we may face competition from new entrants to the business and
consumer marketing information industry as a result of the rapid expansion of
the Internet, which creates a substantial new channel for distributing business
information to the market. Many of our competitors have longer operating
histories, better name recognition and greater financial resources than we do,
which may enable them to implement their business strategies more readily than
we can. We are leveraged. If we are unable to service our debt as it becomes due,
our business would be harmed. As of September 30, 2004, we had total indebtedness of $220.6 million.
Substantially all of our assets are pledged as security under the terms of the
Credit Facility. Our ability to pay principal and interest on the indebtedness under the
Credit Facility and our ability to satisfy our other debt obligations will
depend upon our future operating performance. Our performance will be affected
by prevailing economic conditions and financial, business and other factors.
Certain of these factors are beyond our control. The future availability of
revolving credit under the Credit Facility will depend on, among other things,
our ability to meet certain specified financial ratios and maintenance tests.
We expect that our operating cash flow should be sufficient to meet our
operating expenses, to make necessary capital expenditures and to service our
debt requirements as they become due. If we are unable to service our
indebtedness, however, we will be forced to take actions such as reducing or
delaying acquisitions and/or capital expenditures, selling assets,
restructuring or refinancing our indebtedness (including the Credit Facility)
or seeking additional equity capital. We may not be able to implement any such
measures or obtain additional financing or terms that are favorable or
satisfactory to us, if at all. Fluctuations in our operating results may result in decreases in the
market price of our common stock. Our operating results may fluctuate on a quarterly and annual basis. Our
expense levels are relatively fixed and are based, in part, on our expectations
as to future revenues. As a result, unexpected changes in revenue levels may
have a disproportionate effect on operating performance in any given period. In
some period or periods our operating results may be below the expectations of
public market analysts and investors. Our failure to meet analyst or investor
expectations could result in a decrease in the market price of our common
stock. If we do not adapt our products and services to respond to changes in
technology, they could become obsolete. We provide marketing information and services to our customers in a
variety of formats, including printed formats, electronic formats such as
CD-Rom and DVD, and over the Internet. Advances in information technology may
result in changing customer preferences for products and product delivery
formats. If we do not successfully adapt our products and services to take
advantage of changes in technology and customer preferences, our business,
financial condition and results of operations would be adversely affected. 22




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We have adopted an Internet strategy because we believe that the Internet
represents an important and rapidly evolving market for marketing information
products and services. Our business, financial condition and results of
operations would be adversely affected if we:  
    
    Fail to develop products and services that are well suited to the
Internet market;
    
    Experience difficulties that delay or prevent the successful
development, introduction and marketing of these products and services;
or
    
    Fail to achieve sufficient traffic to our Internet sites to generate
significant revenues, or to successfully implement electronic commerce
operations. Our ability to increase our revenues will depend to some extent upon
introducing new products and services, and if the marketplace does not accept
these new products and services, our revenues may decline. To increase our revenues, we must enhance and improve existing products
and continue to introduce new products and new versions of existing products
that keep pace with technological developments, satisfy increasingly
sophisticated customer requirements, and achieve market acceptance. We believe
much of our future growth prospects will rest on our ability to continue to
expand into newer products and services. Products and services that we plan to
market in the future are in various stages of development. We cannot assure you
that the marketplace will accept these products. If our current or potential
customers are not willing to switch to or adopt our new products and services,
our ability to increase revenues will be impaired. Changes in laws and regulations relating to data privacy could adversely
affect our business. We engage in direct marketing, as do many of our customers. Certain data
and services provided by us are subject to regulation by federal, state and
local authorities in the United States as well as those in Canada and the
United Kingdom. For instance, some of the data and services that we provide are
subject to regulation under the Fair Credit Reporting Act, which regulates the
use of consumer credit information, and to a lesser extent, the
Gramm-Leach-Bliley Act, which regulates the use of non-public personal
information. We are also subject to the United Kingdoms Data Protection Act of
1998, which became fully effective on October 24, 2001 and regulates the manner
in which we can use third-party data, and recent regulatory limitations
relating to use of the Electoral Roll, one of our key data sources in the
United Kingdom. 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. There is increasing awareness and concern among
the general public regarding marketing and privacy concerns, particularly as it
relates to the Internet. This concern is likely to result in new laws and
regulations. Compliance with existing federal, state and local laws and
regulations and industry self-regulation has not to date seriously affected our
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 collection, management or commercial use of
such information may increasingly affect our operations. This could result in
substantial regulatory compliance or litigation expense or a loss of revenue. Our business would be harmed if we do not successfully integrate future
acquisitions. Our business strategy includes continued growth through acquisitions of
complementary products, technologies or businesses. We have made over 20
acquisitions since 1996 and completed the integration of these acquisitions
into our existing business by the end of 2003, with the exception of those
companies recently acquired during 2004. We continue to evaluate strategic
opportunities available to us and intend to pursue opportunities that we
believe fit our business strategy. Acquisitions of companies, products or
technologies may result in the diversion of managements time and attention
from day-to-day operations of our business and may entail numerous other risks,
including difficulties in assimilating and integrating acquired operations,
databases, products, corporate cultures and personnel, potential loss of key
employees of acquired businesses, difficulties in applying our internal
controls to acquired businesses, and particular problems, liabilities or
contingencies related to the businesses being acquired. To the extent our
efforts to integrate future acquisitions fail, our business, financial
condition and results of operations would be adversely affected. 23




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has identified interest rate risk as the Companys primary
market risk exposure. The Company is exposed to significant future earnings
and cash flow exposures from significant changes in interest rates as nearly
all of the Companys debt is at variable rates. If necessary, the Company
could refinance the Companys debt to fixed rates or utilize interest rate
protection agreements to manage interest rate risk. For example, a 100 basis
point increase (decrease) in the interest rate would cause an annual increase
(decrease) in interest expense of $2.2 million. At September 30, 2004, the
fair value of the Companys long-term debt is based on quoted market prices at
the reporting date or is estimated by discounting the future cash flows of each
instrument at rates currently offered to the Company for similar debt
instruments of comparable maturities. At September 30, 2004, the Company had
long-term debt with a carrying value of $220.6 million and estimated fair value
of the same. The Company has no significant operations subject to risks of
foreign currency fluctuations. 
 ITEM 4. CONTROLS AND PROCEDURES The Companys management, with the participation of the Companys Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934,
as amended (the Exchange Act)) as of the end of the fiscal quarter ended
September 30, 2004. Based on this evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls
and procedures were effective as of the end of the fiscal quarter ended
September 30, 2004 to ensure that information that is required to be disclosed
by the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms. There were no changes in the Companys internal
control over financial reporting that occurred during the fiscal quarter ended
September 30, 2004 that have materially affected, or are reasonable likely to
materially affect, the Companys internal control over financial reporting. 24




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infoUSA INC.
FORM 10-Q FOR THE QUARTER ENDED September 30, 2004 
 PART II OTHER INFORMATION 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.32.1*
    
    
    
    Certification of Chief Executive Officer pursuant to
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.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.
  *
    
    Filed herewith (b) Reports on Form 8-K The Company filed a Form 8-K/A under Item 2 and 7 on August 3, 2004
containing financial information related to its acquisition of OneSource
Information Services, Inc. on June 3, 2004. 25




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##### Table of Contents



SIGNATURES 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. infoUSA INC.Date: November 9, 2004
    
    /s/ Michael SchultzMichael Schultz, Controller(principal accounting officer)Date: November 9, 2004
    
    /s/ Raj DasRaj Das, Chief Financial Officer
 26




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##### Table of Contents



INDEX TO EXHIBITS 31.1*
    
    
    
    Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.31.2*
    
    
    
    Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.32.1*
    
    
    
    Certification of Chief Executive Officer pursuant to
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.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.
  *
    
    Filed herewith