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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, 2002 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.

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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|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

(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.

50,909,507 shares of Common Stock at May 8, 2002





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TABLE OF CONTENTS



|                                                                                                                       |                                                                                              |                                            |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION AND MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                                                       | ITEM 1                                                                                      
|                                                                                                                       |                                                                                              | CONSOLIDATED BALANCE SHEETS               
|                                                                                                                       |                                                                                              | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                                                                                       |                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                                                                                       |                                                                                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                                                                                                       | Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                                                       | Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                                                                                                                       | Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                 
|PART II OTHER INFORMATION                                                                                             
|                                                                                                                       | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                    
|SIGNATURES                                                                                                            



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infoUSA INC.

INDEX

|                                                                        |                   |                                                                                         
|----------------------------------------------------------------------- | ----------------- | ----------------------------------------------------------------------------------------
|PART I  FINANCIAL INFORMATION AND MANAGEMENTS DISCUSSION AND ANALYSIS
|                                                                        | Item 1.           | Consolidated Balance Sheets as of March 31, 2002 and
December 31, 2001                  
|                                                                        |                   | Consolidated Statements of Operations for the Three Months
Ended March 31, 2002 and 2001
|                                                                        |                   | Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2002 and 2001
|                                                                        |                   | Notes to Consolidated Financial Statements                                              
|                                                                        | Item 2.           | Managements Discussion and Analysis of Results of Operations                           
|                                                                        | Item 3.           | Quantitative and Qualitative Disclosures about Market Risk                              
|                                                                        | Item 4.           | Submission of matters to a vote of security holders                                     
|PART II  OTHER INFORMATION                                            
|                                                                        | Item 6.           | Exhibits and Reports on Form 8-K                                                        
|                                                                        | Signatures        | 23                                                                                      
|                                                                        | Index to Exhibits

2



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infoUSA INC.

FORM 10-Q

FOR THE QUARTER ENDED

MARCH 31, 2002

PART I

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

3



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

|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                   |        |  |  | 
|-------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------ | ------ | ------- | -------------- | ------- | ----------------- | ------ |  |  | 
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         | MARCH 31, 2002 |         | DECEMBER 31, 2001
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         | (UNAUDITED)    |         |                   |        | 
|                                       |                                                                                                                                                                                                                   |                            |                                      | ASSETS |         |                |         |                   |        |  |  | 
|Current assets:                        |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       | Cash and cash equivalents                                                                                                                                                                                         |                            | $                                    | 147    |         |                | $       | 4,382             |       
|                                       | Marketable securities                                                                                                                                                                                             |                            |                                      | 1,037  |         |                |         | 1,037             |       
|                                       | Trade accounts receivable, net of allowances of $4,508 and
$4,670, respectively                                                                                                                                   |                            |                                      | 45,283 |         |                |         | 44,890            |       
|                                       | List brokerage trade accounts receivable                                                                                                                                                                          |                            |                                      | 21,867 |         |                |         | 16,992            |       
|                                       | Prepaid expenses                                                                                                                                                                                                  |                            |                                      | 7,196  |         |                |         | 6,861             |       
|                                       | Deferred income taxes                                                                                                                                                                                             |                            |                                      |       |         |                |         | 1,251             |       
|                                       | Deferred marketing costs                                                                                                                                                                                          |                            |                                      | 2,073  |         |                |         | 2,058             |       
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   | Total current assets       |                                      |        | 77,603  |                |         |                   | 77,471 | 
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|Property and equipment, net            |                                                                                                                                                                                                                   |                            | 50,026                               |        |         |                | 51,640  |                  
|Intangible assets, net                 |                                                                                                                                                                                                                   |                            | 279,923                              |        |         |                | 284,675 |                  
|Other assets                           |                                                                                                                                                                                                                   |                            | 5,177                                |        |         |                | 5,302   |                  
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   | $                          | 412,729                              |        |         | $              | 419,088 |                  
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   |                            | LIABILITIES AND STOCKHOLDERS EQUITY |        |         |                |         |                   |        |  | 
|Current liabilities:                   |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       | Current portion of long-term debt                                                                                                                                                                                 |                            | $                                    | 20,755 |         |                | $       | 19,770            |       
|                                       | Accounts payable                                                                                                                                                                                                  |                            |                                      | 9,004  |         |                |         | 7,760             |       
|                                       | List brokerage trade accounts payable                                                                                                                                                                             |                            |                                      | 17,320 |         |                |         | 15,031            |       
|                                       | Accrued payroll expenses                                                                                                                                                                                          |                            |                                      | 6,568  |         |                |         | 7,891             |       
|                                       | Income taxes payable                                                                                                                                                                                              |                            |                                      | 4,262  |         |                |         | 4,030             |       
|                                       | Accrued expenses                                                                                                                                                                                                  |                            |                                      | 7,483  |         |                |         | 9,240             |       
|                                       | Deferred income taxes                                                                                                                                                                                             |                            |                                      | 1,162  |         |                |         |                  |       
|                                       | Deferred revenues                                                                                                                                                                                                 |                            |                                      | 17,075 |         |                |         | 17,419            |       
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   | Total current liabilities  |                                      |        | 83,629  |                |         |                   | 81,141 | 
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|Long-term debt, net of current portion |                                                                                                                                                                                                                   |                            | 196,989                              |        |         |                | 205,900 |                  
|Deferred income taxes                  |                                                                                                                                                                                                                   |                            | 24,763                               |        |         |                | 27,250  |                  
|Deferred revenue                       |                                                                                                                                                                                                                   |                            | 6,000                                |        |         |                | 9,000   |                  
|Stockholders equity:                  |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       | Preferred stock, $.0025 par value. Authorized 5,000,000
shares; none issued or outstanding                                                                                                                        |                            |                                      |       |         |                |         |                  |       
|                                       | Common stock, $.0025 par value. Authorized
295,000,000 shares; 51,861,307 shares issued and
50,902,216 outstanding at March 31, 2002 and 51,850,339
shares issued and 50,891,248 outstanding at December 31, 2001 |                            |                                      | 130    |         |                |         | 130               |       
|                                       | Paid-in capital                                                                                                                                                                                                   |                            |                                      | 93,590 |         |                |         | 93,551            |       
|                                       | Retained earnings                                                                                                                                                                                                 |                            |                                      | 16,667 |         |                |         | 11,801            |       
|                                       | Treasury stock, at cost, 959,091 shares held at March 31, 2002
and 959,091 held at December 31, 2001                                                                                                              |                            |                                      | (7,028 | )       |                |         | (7,028            | )     
|                                       | Notes receivable from officers                                                                                                                                                                                    |                            |                                      | (1,230 | )       |                |         | (1,296            | )     
|                                       | Accumulated other comprehensive loss                                                                                                                                                                              |                            |                                      | (781   | )       |                |         | (1,361            | )     
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   | Total stockholders equity |                                      |        | 101,348 |                |         |                   | 95,797 | 
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  
|                                       |                                                                                                                                                                                                                   | $                          | 412,729                              |        |         | $              | 419,088 |                  
|                                       |                                                                                                                                                                                                                   |                            |                                      |        |         |                |         |                  

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
|                                                                                                                               |                                        |                   |                                         |        | MARCH 31,         
|                                                                                                                               |                                        |                   |                                         |        | 2002               |        | 2001  
|                                                                                                                               |                                        |                   |                                         |        |                    |        |       
|                                                                                                                               |                                        |                   |                                         |        | (UNAUDITED)       
|Net sales                                                                                                                      |                                        | $                 | 76,723                                  |        |                    | $      | 73,853 |       
|Costs and expenses:                                                                                                            |                                        |                   |                                         |        |                    |        |        |       
|Database and production costs
(excluding non-cash stock compensation expense
of $8 for the period ended March 31, 2001)        |                                        |                   | 21,260                                  |        |                    |        | 21,387 |       
|Selling, general and administrative
(excluding non-cash stock compensation expense
of $69 for the period ended March 31, 2001) |                                        |                   | 31,881                                  |        |                    |        | 27,261 |       
|Depreciation and amortization                                                                                                  |                                        |                   | 7,104                                   |        |                    |        | 12,733 |       
|Non-cash stock compensation expense                                                                                            |                                        |                   |                                        |        |                    |        | 77     |       
|Restructuring charges                                                                                                          |                                        |                   | 167                                     |        |                    |        | 876    |       
|Acquisition costs                                                                                                              |                                        |                   | 63                                      |        |                    |        |       |       
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|Total operating costs and expenses                                                                                             |                                        |                   | 60,475                                  |        |                    |        | 62,334 |       
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|Operating income                                                                                                               |                                        |                   | 16,248                                  |        |                    |        | 11,519 |       
|Other income (expense):                                                                                                        |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               |                                        | Investment income |                                         |        | 70                 |        |        |        | 245 |       
|                                                                                                                               |                                        |                   | Loss on interest rate swap agreement    |        |                    | (1,204 | )      |        |     |       |  
|                                                                                                                               |                                        |                   | Minority interest in gain of subsidiary |        |                    |       |        |        |     | (60    | )
|                                                                                                                               |                                        |                   | Interest expense                        |        |                    | (4,414 | )      |        |     | (6,914 | )
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|Income before income taxes and extraordinary item                                                                              |                                        |                   | 10,700                                  |        |                    |        | 4,790  |       
|Income taxes                                                                                                                   |                                        |                   | 4,065                                   |        |                    |        | 2,936  |       
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|Income before extraordinary item                                                                                               |                                        |                   | 6,635                                   |        |                    |        | 1,854  |       
|Extraordinary item, net of tax                                                                                                 |                                        |                   | (1,769                                  | )      |                    |        |       |       
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|Net income                                                                                                                     |                                        | $                 | 4,866                                   |        |                    | $      | 1,854  |       
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|BASIC EARNINGS PER SHARE:                                                                                                      |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Income before extraordinary item       |                   | $                                       | 0.13   |                    |        | $      | 0.04   |    
|                                                                                                                               | Loss on extraordinary item, net of tax |                   |                                         | (0.03  | )                  |        |        |       |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Net income                             |                   | $                                       | 0.10   |                    |        | $      | 0.04   |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Weighted average shares outstanding    |                   |                                         | 50,908 |                    |        |        | 50,609 |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|DILUTED EARNINGS PER SHARE:                                                                                                    |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Income before extraordinary item       |                   | $                                       | 0.13   |                    |        | $      | 0.04   |    
|                                                                                                                               | Loss on extraordinary item, net of tax |                   |                                         | (0.03  | )                  |        |        |       |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Net income                             |                   | $                                       | 0.10   |                    |        | $      | 0.04   |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       
|                                                                                                                               | Weighted average shares outstanding    |                   |                                         | 51,223 |                    |        |        | 50,609 |    
|                                                                                                                               |                                        |                   |                                         |        |                    |        |        |       

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)

|                                                                                  |                                                                   |                                           |        |                    |        |      |         |        |        |  
|--------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------- | ------ | ------------------ | ------ | ---- | ------- | ------ | ------ | -
|                                                                                  |                                                                   |                                           |        | THREE MONTHS ENDED
|                                                                                  |                                                                   |                                           |        | MARCH 31,         
|                                                                                  |                                                                   |                                           |        | 2002               |        | 2001
|                                                                                  |                                                                   |                                           |        |                    |        |     
|                                                                                  |                                                                   |                                           |        | (UNAUDITED)       
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |                                                                   |                                           |        |                    |        |      |         |       
|Net income                                                                        |                                                                   | $                                         | 4,866  |                    |        | $    | 1,854   |       
|Adjustments to reconcile net income
to net cash provided by operating activities: |                                                                   |                                           |        |                    |        |      |         |       
|                                                                                  | Depreciation and amortization                                     |                                           |        | 7,104              |        |      |         | 12,733 |       
|                                                                                  | Amortization of deferred financing costs                          |                                           |        | 285                |        |      |         | 289    |       
|                                                                                  | Deferred income taxes                                             |                                           |        | (74                | )      |      |         | (4,398 | )     
|                                                                                  | Non-cash stock option compensation expense                        |                                           |        |                   |        |      |         | 77     |       
|                                                                                  | Non-cash 401(k) contribution in common stock                      |                                           |        |                   |        |      |         | 120    |       
|                                                                                  | Loss on interest rate swap agreement                              |                                           |        | 1,204              |        |      |         |       |       
|                                                                                  | Extraordinary item  loss on extinguishment of debt               |                                           |        | 1,769              |        |      |         |       |       
|                                                                                  | Minority interest in gain of subsidiary                           |                                           |        |                   |        |      |         | 60     |       
|                                                                                  | Changes in assets and liabilities, net of effect
of acquisitions: |                                           |        |                    |        |      |         |        |       
|                                                                                  |                                                                   | Trade accounts receivable                 |        |                    | (350   | )    |         |        | 5,752  |  
|                                                                                  |                                                                   | List brokerage trade accounts receivable  |        |                    | (1,251 | )    |         |        | (583   | )
|                                                                                  |                                                                   | Prepaid expenses                          |        |                    | (84    | )    |         |        | (1,308 | )
|                                                                                  |                                                                   | Deferred marketing costs                  |        |                    | (15    | )    |         |        | 589    |  
|                                                                                  |                                                                   | Accounts payable                          |        |                    | 1,126  |      |         |        | (3,276 | )
|                                                                                  |                                                                   | List brokerage trade accounts payable     |        |                    | 408    |      |         |        | 147    |  
|                                                                                  |                                                                   | Income taxes receivable and payable, net  |        |                    | 231    |      |         |        | 6,184  |  
|                                                                                  |                                                                   | Accrued expenses and deferred revenue     |        |                    | (6,549 | )    |         |        | (5,007 | )
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|                                                                                  |                                                                   | Net cash provided by operating activities |        |                    | 8,670  |      |         |        | 13,233 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |                                                                   |                                           |        |                    |        |      |         |       
|Purchases of other investments                                                    |                                                                   |                                           |       |                    |        |      | (100    | )     
|Purchases of property and equipment                                               |                                                                   |                                           | (1,244 | )                  |        |      | (1,023  | )     
|Acquisitions of businesses, net of cash acquired                                  |                                                                   |                                           | (2,183 | )                  |        |      |        |       
|Software and database development costs                                           |                                                                   |                                           | (708   | )                  |        |      | (811    | )     
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|Net cash used in investing activities                                             |                                                                   |                                           | (4,135 | )                  |        |      | (1,934  | )     
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |                                                                   |                                           |        |                    |        |      |         |       
|Repayment of long-term debt                                                       |                                                                   |                                           | (7,926 | )                  |        |      | (10,053 | )     
|Deferred financing costs paid                                                     |                                                                   |                                           | (949   | )                  |        |      |        |       
|Proceeds from exercise of stock options                                           |                                                                   |                                           | 105    |                    |        |      |        |       
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|Net cash used in financing activities                                             |                                                                   |                                           | (8,770 | )                  |        |      | (10,053 | )     
|Net increase (decrease) in cash and cash equivalents                              |                                                                   |                                           | (4,235 | )                  |        |      | 1,246   |       
|Cash and cash equivalents, beginning                                              |                                                                   |                                           | 4,382  |                    |        |      | 21,693  |       
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|Cash and cash equivalents, ending                                                 |                                                                   | $                                         | 147    |                    |        | $    | 22,939  |       
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|Supplemental cash flow information:                                               |                                                                   |                                           |        |                    |        |      |         |       
|Interest paid                                                                     |                                                                   | $                                         | 1,853  |                    |        | $    | 3,737   |       
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       
|Income taxes paid                                                                 |                                                                   | $                                         | 3,315  |                    |        | $    | 1,150   |       
|                                                                                  |                                                                   |                                           |        |                    |        |      |         |       

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 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, 2001 included in the Companys 2001 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.

The Company adopted certain provisions of SFAS No. 142 (SFAS 142),
Goodwill and Other Intangible Assets effective January 1, 2002.
Therefore, we ceased to amortize approximately $16.5 million of goodwill
effective January 1, 2002, that we had amortized during 2001. In
accordance with SFAS 142, the Company is required to perform an initial
impairment test of goodwill in 2002 and update the impairment test
annually. We expect to complete our initial impairment test during the
first six months of 2002.

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. For the quarter ended March 31, 2001, the average market price
of the Companys common stock was less than the exercise price of all the
Companys outstanding common stock subject to option.

|                                                                                                  |  |                    |        |      |  |  |        | 
|------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | ---- |  |  | ------ | 
|                                                                                                  |  | THREE MONTHS ENDED
|                                                                                                  |  | MARCH 31,         
|                                                                                                  |  |                   
|                                                                                                  |  | (In thousands)    
|                                                                                                  |  | 2002               |        | 2001
|                                                                                                  |  |                    |        |     
|Weighted average number of shares outstanding used in
basic EPS                                   |  |                    | 50,908 |      |  |  | 50,609 | 
|Net additional common stock equivalent shares
outstanding after assumed exercise of stock options |  |                    | 315    |      |  |  |       | 
|                                                                                                  |  |                    |        |      |  |  |        | 
|Weighted average number of shares outstanding
used in diluted EPS                                 |  |                    | 51,223 |      |  |  | 50,609 | 
|                                                                                                  |  |                    |        |      |  |  |        | 

3.     SEGMENT INFORMATION

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

The small business segment principally engages in the selling of sales
lead generation, business directories and consumer DVD products to small and
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.

The small business and large business segments reflect actual net sales,
direct order production, and identifiable direct sales and marketing costs
related to their operations. The remaining indirect costs are presented as a
reconciling item in corporate activities.

Corporate activities principally represent the information systems
technology, database compilation, database verification, and administrative
functions of the Company. Investment income, 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
7Table of Contents

segments. The Company records unusual or non-recurring items including
acquisition costs, non-cash stock compensation expense, asset impairments and
other extraordinary items 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 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.

The following table summarizes segment information:

|                                                                     |  |                                           |        |          |  |            |        |              |  |   |         |   |  |   |        |  
|-------------------------------------------------------------------- |  | ----------------------------------------- | ------ | -------- |  | ---------- | ------ | ------------ |  | - | ------- | - |  | - | ------ | -
|                                                                     |  | FOR THE THREE MONTHS ENDED MARCH 31, 2002
|                                                                     |  |                                          
|                                                                     |  | Small                                     |        | Large    |  | Corporate  |        | Consolidated
|                                                                     |  | Business                                  |        | Business |  | Activities |        | Total       
|                                                                     |  |                                           |        |          |  |            |        |             
|                                                                     |  | (In thousands)                           
|Net sales                                                            |  | $                                         | 39,348 |          |  | $          | 37,375 |              |  | $ |        |   |  | $ | 76,723 |  
|Acquisition costs                                                    |  |                                           |       |          |  |            |       |              |  |   | 63      |   |  |   | 63     |  
|Operating income (loss)                                              |  |                                           | 15,496 |          |  |            | 20,312 |              |  |   | (19,560 | ) |  |   | 16,248 |  
|Investment income                                                    |  |                                           |       |          |  |            |       |              |  |   | (1,204  | ) |  |   | (1,204 | )
|Loss on interest swap agreement                                      |  |                                           |       |          |  |            |       |              |  |   | 70      |   |  |   | 70     |  
|Interest expense                                                     |  |                                           |       |          |  |            |       |              |  |   | 4,414   |   |  |   | 4,414  |  
|Income (loss) before income taxes
and extraordinary item, net of tax |  |                                           | 15,496 |          |  |            | 20,312 |              |  |   | (25,108 | ) |  |   | 10,700 |  

|                                        |  |                                           |        |          |  |            |        |              |  |   |         |   |  |   |        |  
|--------------------------------------- |  | ----------------------------------------- | ------ | -------- |  | ---------- | ------ | ------------ |  | - | ------- | - |  | - | ------ | -
|                                        |  | FOR THE THREE MONTHS ENDED MARCH 31, 2001
|                                        |  |                                          
|                                        |  | Small                                     |        | Large    |  | Corporate  |        | Consolidated
|                                        |  | Business                                  |        | Business |  | Activities |        | Total       
|                                        |  |                                           |        |          |  |            |        |             
|                                        |  | (In thousands)                           
|Net sales                               |  | $                                         | 35,415 |          |  | $          | 38,438 |              |  | $ |        |   |  | $ | 73,853 |  
|Non-cash stock compensation             |  |                                           |       |          |  |            |       |              |  |   | 77      |   |  |   | 77     |  
|Operating income (loss)                 |  |                                           | 17,383 |          |  |            | 21,216 |              |  |   | (27,080 | ) |  |   | 11,519 |  
|Investment income                       |  |                                           |       |          |  |            |       |              |  |   | 245     |   |  |   | 245    |  
|Minority interest in gain of subsidiary |  |                                           |       |          |  |            |       |              |  |   | (60     | ) |  |   | (60    | )
|Interest expense                        |  |                                           |       |          |  |            |       |              |  |   | 6,914   |   |  |   | 6,914  |  
|Income (loss) before income taxes       |  |                                           | 17,383 |          |  |            | 21,216 |              |  |   | (33,809 | ) |  |   | 4,790  |  

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4.     COMPREHENSIVE INCOME (LOSS)

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

|                                        |                                          |                           |       |                |       |           |       |   |        |  
|--------------------------------------- | ---------------------------------------- | ------------------------- | ----- | -------------- | ----- | --------- | ----- | - | ------ | -
|                                        |                                          |                           |       | FOR THE THREE 
|                                        |                                          |                           |       | MONTHS ENDED  
|                                        |                                          |                           |       |               
|                                        |                                          |                           |       | MARCH 31,      |       | MARCH 31,
|                                        |                                          |                           |       | 2002           |       | 2001     
|                                        |                                          |                           |       |                |       |          
|                                        |                                          |                           |       | (In thousands)
|Net income                              |                                          | $                         | 4,866 |                |       | $         | 1,854 |  
|Other comprehensive income (loss):      |                                          |                           |       |                |       |           |       |  
|                                        | Unrealized gain (loss) from investments: |                           |       |                |       |           |       |   |       
|                                        |                                          | Unrealized gains (losses) |       |                | 1     |           |       |   | (24    | )
|                                        |                                          | Related tax expense       |       |                |      |           |       |   | 9      |  
|                                        |                                          |                           |       |                |       |           |       |  
|                                        |                                          | Net                       |       |                | 1     |           |       |   | (15    | )
|                                        |                                          |                           |       |                |       |           |       |  
|Interest rate swap agreement:           |                                          |                           |       |                |       |           |       |  
|                                        |                                          | Gains (losses)            |       |                | 1,204 |           |       |   | (1,461 | )
|                                        |                                          | Related tax expense       |       |                | (483  | )         |       |   | 555    |  
|                                        |                                          |                           |       |                |       |           |       |  
|                                        |                                          | Net                       |       |                | 721   |           |       |   | (906   | )
|                                        |                                          |                           |       |                |       |           |       |  
|                                        | Foreign currency translation adjustments |                           |       |               |       |           |       |  |       
|                                        |                                          |                           |       |                |       |           |       |  
|Total other comprehensive income (loss) |                                          |                           | 722   |                |       |           | (921  | )
|                                        |                                          |                           |       |                |       |           |       |  
|Comprehensive income                    |                                          | $                         | 5,588 |                |       | $         | 933   |  
|                                        |                                          |                           |       |                |       |           |       |  

The components of accumulated other comprehensive income (loss) is as
follows:

|                             |  |                |      |                  |  |                  |      |               |  |   |      |             |  |   |        |  
|---------------------------- |  | -------------- | ---- | ---------------- |  | ---------------- | ---- | ------------- |  | - | ---- | ----------- |  | - | ------ | -
|                             |  | Foreign        |      |                  |  |                  |      |               |  |   |      | Accumulated
|                             |  | Currency       |      | Gains / (Losses) |  | Unrealized       |      | Other        
|                             |  | Translation    |      | On Derivative    |  | Gains / (Losses) |      | Comprehensive
|                             |  | Adjustments    |      | Instruments      |  | On Securities    |      | Income (Loss)
|                             |  |                |      |                  |  |                  |      |              
|                             |  | (In thousands)
|Balance at March 31, 2002    |  | $              | (668 | )                |  | $                |     |               |  | $ | (113 | )           |  | $ | (781   | )
|                             |  |                |      |                  |  |                  |      |               |  |   |      |             |  |   |        |  
|Balance at December 31, 2001 |  | $              | (668 | )                |  | $                | (527 | )             |  | $ | (166 | )           |  | $ | (1,361 | )
|                             |  |                |      |                  |  |                  |      |               |  |   |      |             |  |   |        |  

5.     ACQUISITIONS

Effective March 2002, the Company acquired certain assets and assumed
certain liabilities related to the email list business of Doubleclick, Inc.
Total consideration for the acquisition was $2.0 million, funded using cash
provided by operations. The acquisition has been accounted for under the
purchase method of accounting, and accordingly, the operating results of the
email lists business purchased from Doubleclick, Inc. have been included in
the Companys financial statements since the date of the acquisition.
Intangibles recorded as a part of the purchase include goodwill of $0.2
million. No pro forma operating results have been included as the Company
has determined that the results of operations for the email list business
purchased are not material.

Effective January 2002, the Company acquired all issued and outstanding
common stock of Database Concepts, Inc., a Canadian database development
business. Total consideration for the acquisition was $0.3 million, funded
using cash provided by operations. The acquisition has been accounted for
under the purchase method of accounting, and accordingly, the operating
results of Database Concepts have been included in the Companys financial
statements since the date of the acquisition. Intangibles recorded as a part
of the purchase include goodwill of $0.3 million. No pro forma operating
results have been included as the Company has determined that the results of
operations for the database development business purchased are not material.

6.     NON-CASH STOCK COMPENSATION EXPENSE

The Company had a majority-owned subsidiary, infoUSA.com, that sponsored
an Equity Incentive Plan in which shares of the subsidiarys common stock
were reserved for issuance to officers, directors, employees and consultants
of the subsidiary. During the quarter ended September 30, 2001, the Company
eliminated the minority interests in its subsidiary, infoUSA.com, through the
acquisition of assets. As a result of the purchase, the Companys obligation
associated with the subsidiary stock options was eliminated. There were no
options granted during the three months ended March 31, 2001 or subsequent
periods. The Company used Accounting Principles Bulletin (APB) Opinion No. 25
to account for stock-based compensation to employees and directors of
9Table of Contents

the Company and Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation and FASB Interpretation No. 28,
Accounting for Stock Appreciation Rights and Other Variable Stock Option or
Award Plans for stock-based compensation to non-employees of the Company. As
such, the Company has recorded a non-cash charge of $0.1 million, during the
quarter ended March 31, 2001, related of stock options for infoUSA.com. The
charge was recorded as an addition to paid-in-capital.

7.     RESTRUCTURING CHARGES

During the first quarter of 2002, the Company recorded restructuring
charges due to further workforce reductions of $0.2 million. The costs were
incurred and paid during the three months ended March 31, 2002. The
workforce reduction charges included involuntary employee separation costs
for approximately 29 employees in administration, sales support and marketing
functions.

During the first quarter of 2001, the Company recorded restructuring
charges due to workforce reductions of $0.9 million, as a part of the
Companys overall strategy to reduce costs and continue commitment to its
core businesses. The costs were incurred and paid during the three months
ended March 31, 2001. The workforce reduction charges included involuntary
employee separation costs for approximately 150 employees in administration,
sales support and marketing functions.

8.     ACQUISITION COSTS

During the first quarter of 2002, the Company recorded
integration-related acquisition costs of $0.1 million, or less than 1% of net
sales. The integration-related costs included consulting costs, information
system conversion and other direct integration-related charges. These costs
were not directly related to the acquisition of Polk Directories, and
therefore could not be capitalized, but were costs associated with the
integration of Polk Directories operations into the Companys existing
operations.

9.     LOSS ON INTEREST RATE SWAP AGREEMENT

During 1999 in conjunction with the acquisition of Donnelley, the
Company negotiated a credit arrangement (Senior Debt Credit facility).
According to the terms of the Senior Debt Credit Facility, the Company
entered into an interest rate swap agreement with Union Bank of California,
to fix the rate on $60.5 million of the debt at an interest rate of 6.385%
for the term of 3 years. On March 6, 2002, the Company refinanced the Senior
Debt Credit facility administered by Deutsche Bank with Bank of America
Securities, LLC. As a result of the refinancing, the Company recorded a
charge of $1.2 million for amounts reported in Other Comprehensive Income
related to the fair value of the interest rate swap agreement. The interest
rate swap agreement will not be accounted for as an interest rate hedge
agreement for the remaining term of the agreement, which ultimately concludes
September 2002.

10.     EXTRAORDINARY ITEM, NET OF TAX

On March 6, 2002, the Company refinanced its senior debt credit
facility administered by Deutsche Bank to Bank of America Securities, LLC.
On March 6, 2002, the Company recorded an extraordinary item of $1.8 million,
net of income tax benefit of $1.2 million, for the net unamortized debt issue
costs related to the extinguishment of the senior debt credit facility with
Deutsche Bank.

11.     RELATED PARTY TRANSACTIONS

Mr. Gupta, who is the Chairman and Chief Executive Officer of the
Company, is eligible for a cash bonus in 2002 based on Company performance.
The criteria for Mr. Guptas bonus is that he will receive 10% of the
Companys adjusted EBITDA in excess of $80 million. In January 2002, the
Company paid an advance to Mr. Gupta in the amount of $1.5 million (based on
2001 performance) to be off set against any 2002 bonus payable to Mr. Gupta
pursuant to his bonus program. The advance will be applied to part or all
of his 2002 bonus, if performance criteria are met, or paid back by Mr. Gupta
within the next 12 months. In April 2002, Mr. Gupta paid back $0.6 million
of the original advance, leaving an advance balance of $0.9 million.

12.     GOODWILL AND OTHER INTANGIBLE ASSETS  ADOPTION OF STATEMENT 142

The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets for the
quarter ended March 31, 2002. Beginning January 1, 2002, the Company ceased
the amortization of goodwill and certain other intangible assets, the result
of which is no further expense for the amortization of these intangible
assets

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in 2002 and future years. Amortization expense for goodwill of $3.8 million,
net of tax benefit of $0.3 million, was recorded during the first quarter of
2001 that was not recorded during the first quarter of 2002.

Acquired intangible assets as of March 31, 2002 consist of:

|                             |                                          |   |                    |         |              |   |         |        | 
|---------------------------- | ---------------------------------------- | - | ------------------ | ------- | ------------ | - | ------- | ------ | 
|                             |                                          |   | Gross Carrying     |         | Accumulated 
|                             |                                          |   | Amount             |         | Amortization
|                             |                                          |   |                    |         |             
|                             |                                          |   | (amounts in $000s)
|Amortized intangible assets: |                                          |   |                    |         |              |   |         |       
|                             | Goodwill                                 |   | $                  | 266,841 |              |   | $       | 51,069 | 
|                             | Purchased data processing and technology |   |                    | 78,278  |              |   |         | 39,374 | 
|                             | Acquired database costs                  |   |                    | 19,000  |              |   |         | 19,000 | 
|                             | Tradename                                |   |                    | 15,802  |              |   |         | 3,950  | 
|                             | Non-compete agreements                   |   |                    | 13,534  |              |   |         | 7,081  | 
|                             | Customer base                            |   |                    | 8,372   |              |   |         | 4,570  | 
|                             |                                          |   |                    |         |              |   |         |       
|                             |                                          | $ | 401,827            |         |              | $ | 125,044 |       
|                             |                                          |   |                    |         |              |   |         |       

Assuming the provisions of SFAS 142 had been implemented as of January
1, 2001, adjusted net income before extraordinary items, adjusted net income
and earnings per share would have been:

|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |       | 
|------------------------------------------------------- | --------------------------------- |  | ------------- |  | --------- | - | ----- | - |  | - | ----- | ----- | 
|                                                        |                                   |  | FOR THE THREE
|                                                        |                                   |  | MONTHS ENDED 
|                                                        |                                   |  |              
|                                                        |                                   |  | MARCH 31,     |  | MARCH 31,
|                                                        |                                   |  | 2002          |  | 2001     
|                                                        |                                   |  |               |  |          
|($000s except for earnings-per-share amounts)           |                                   |  |               |  |           |   |       |   |  |   |       |      
|Reported income before extraordinary item               |                                   |  |               |  |           | $ | 6,635 |   |  | $ | 1,854 |      
|                                                        | Goodwill amortization, net of tax |  |               |  |           |   |       |  |  |   |       | 3,787 | 
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Adjusted net income before extraordinary item           |                                   |  |               |  |           | $ | 6,635 |   |  | $ | 5,641 |      
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Reported net income                                     |                                   |  |               |  |           | $ | 4,866 |   |  | $ | 1,854 |      
|                                                        | Goodwill amortization, net of tax |  |               |  |           |   |       |  |  |   |       | 3,787 | 
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Adjusted net income                                     |                                   |  |               |  |           | $ | 4,866 |   |  | $ | 5,641 |      
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Basic & Diluted earnings per share:                     |                                   |  |               |  |           |   |       |   |  |   |       |      
|Reported net income before extraordinary
item per share |                                   |  |               |  |           | $ | 0.13  |   |  | $ | 0.04  |      
|                                                        | Goodwill amortization, net of tax |  |               |  |           |   |       |  |  |   |       | 0.07  | 
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Adjusted net income before extraordinary
item per share |                                   |  |               |  |           | $ | 0.13  |   |  | $ | 0.11  |      
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Reported net income per share                           |                                   |  |               |  |           | $ | 0.10  |   |  | $ | 0.04  |      
|                                                        | Goodwill amortization, net of tax |  |               |  |           |   |       |  |  |   |       | 0.07  | 
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      
|Adjusted net income per share                           |                                   |  |               |  |           | $ | 0.10  |   |  | $ | 0.11  |      
|                                                        |                                   |  |               |  |           |   |       |   |  |   |       |      

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.

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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 information, data
processing and database marketing services. The Companys key assets include
proprietary databases of 14 million businesses and 250 million consumers in
the United States and Canada. We believe our proprietary content is the most
comprehensive and accurate data available. We leverage these key assets by
selling through multiple distribution channels to over 4 million customers
that include small and medium-size businesses, Fortune 1000 companies,
consumers, and Internet users.

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 Affecting Operating Results below. The Company
assumes no obligation to update the forward-looking statement or such
factors.

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 the acquisitions of Polk Directories during
October 2001, Database Concepts during January 2002 and the Internet email
list assets from Doubleclick, Inc. in March 2002:

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|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |                |    |         |        |  
|----------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------------------------------- | ----------------------------------------- | ---------------------------------------------- | -- | -------------- | ------ | -------------- | -- | ------- | ------ | -
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    | THREE MONTHS   |        | THREE MONTHS  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    | ENDED          |        | ENDED         
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    | MARCH 31, 2002 |        | MARCH 31, 2001
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | CONSOLIDATED STATEMENT OF OPERATIONS DATA:                                                      |                                     |                                           |                                                |    |                |        |                |   
|                                                                                          | Net sales                                                                                       |                                     |                                           | 100                                            | %  |                |        | 100            | % 
|                                                                                          | Costs and expenses:                                                                             |                                     |                                           |                                                |    |                |        |                |   
|                                                                                          |                                                                                                 | Database and production costs       |                                           |                                                | 28 |                |        |                | 29 |        
|                                                                                          |                                                                                                 | Selling, general and administrative |                                           |                                                | 42 |                |        |                | 37 |        
|                                                                                          |                                                                                                 | Depreciation and amortization       |                                           |                                                | 9  |                |        |                | 17 |        
|                                                                                          |                                                                                                 | Non-cash stock compensation expense |                                           |                                                |   |                |        |                |   |        
|                                                                                          |                                                                                                 | Restructuring charges               |                                           |                                                |   |                |        |                | 1  |        
|                                                                                          |                                                                                                 | Acquisition costs                   |                                           |                                                |   |                |        |                |   |        
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     |                                           | Total costs and expenses                       |    |                | 79     |                |    |         | 84     |  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | Operating income                                                                                |                                     |                                           | 21                                             |    |                |        | 16             |   
|                                                                                          | Other income (expense), net                                                                     |                                     |                                           | (7                                             | )  |                |        | (9             | ) 
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | Income (loss) from continuing operations before income
taxes and extraordinary item, net of tax |                                     |                                           | 14                                             |    |                |        | 7              |   
|                                                                                          | Income taxes                                                                                    |                                     |                                           | 5                                              |    |                |        | 4              |   
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | Income (loss) from continuing operations before
extraordinary item, net of tax                  |                                     |                                           | 9                                              |    |                |        | 3              |   
|                                                                                          | Extraordinary item, net of tax                                                                  |                                     |                                           | (3                                             | )  |                |        |               |   
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | Net income (loss)                                                                               |                                     |                                           | 6                                              | %  |                |        | 3              | % 
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          | OTHER DATA:                                                                                     |                                     |                                           |                                                |    |                |        |                |   
|                                                                                          |                                                                                                 |                                     |                                           | SALES BY SEGMENT:                              |    |                |        |                |    |         |        |  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    | (in thousands)
|                                                                                          |                                                                                                 |                                     |                                           | Small business                                 |    | $              | 39,348 |                |    | $       | 35,415 |  
|                                                                                          |                                                                                                 |                                     |                                           | Large business                                 |    |                | 37,375 |                |    |         | 38,438 |  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     |                                           | Total                                          |    | $              | 76,723 |                |    | $       | 73,853 |  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     |                                           | SALES BY SEGMENT AS A PERCENTAGE OF NET SALES: |    |                |        |                |    |         |        |  
|                                                                                          |                                                                                                 |                                     |                                           | Small business                                 |    |                | 51     | %              |    |         | 48     | %
|                                                                                          |                                                                                                 |                                     |                                           | Large business                                 |    |                | 49     |                |    |         | 52     |  
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     |                                           | Total                                          |    |                | 100    | %              |    |         | 100    | %
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|Amortization expense of goodwill and related intangibles(1)                               |                                                                                                 | $                                   | 3,336                                     |                                                |    | $              | 7,784  |               
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|Earnings before, interest, taxes, depreciation and
amortization, (EBITDA), as adjusted(2) |                                                                                                 | $                                   | 23,352                                    |                                                |    | $              | 24,329 |               
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|EBITDA, as adjusted, as a percentage of net sales                                         |                                                                                                 |                                     | 30                                        | %                                              |    |                | 33     | %             
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|Cash Flow Data:                                                                           |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     | Net cash provided by operating activities |                                                | $  | 8,670          |        |                | $  | 13,233  |       
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     | Net cash used in investing activities     |                                                |    | (4,135         | )      |                |    | (1,934  | )     
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               
|                                                                                          |                                                                                                 |                                     | Net cash used in financing activities     |                                                |    | (8,770         | )      |                |    | (10,053 | )     
|                                                                                          |                                                                                                 |                                     |                                           |                                                |    |                |        |               



---

|(1) |  | This represents amortization expense recorded by the Company on all
intangibles recorded as part of the acquisition of other companies, and
excludes amortization related to deferred financing costs, software
development costs, and other intangible assets not recorded as part of an
acquisition of another company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | EBITDA, as adjusted is defined as operating income adjusted to exclude
depreciation, amortization and non-cash stock compensation expenses. 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.

13



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##### Table of Contents



Overview

The Company has supplemented its internal growth through strategic
acquisitions. The Company has completed sixteen acquisitions since mid-1996.
Through these acquisitions, the Company has increased its presence in the
consumer marketing information industry, greatly increased its ability to
provide data processing solutions, added two consumer CD-Rom product lines,
increased its presence in list management and list brokerage services and
broadened its offerings of business marketing information.

The Company has 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
commingled 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, a number of the acquisitions have had a
significant impact on net sales.

Net sales

Net sales of the Company for the quarter ended March 31, 2002 were $76.7
million, a increase of 4% from $73.9 million for the same period of 2001. The
increase in net sales is principally due to the acquisition of Polk Directories
in October 2001.

Net sales of the small business segment for the quarter ended March 31,
2002 were $39.3 million, a 11% increase from $35.4 million for the same period
of 2001. The small business segment principally engages in the selling of sales
lead generation and consumer DVD products to small to medium sized companies,
small office and home office businesses and individual consumers. This segment
also includes the sale of content via the Internet. The increase in net sales
is principally due to the acquisition of Polk Directories in October 2001. The
Company immediately integrated the operations of Polk Directories into existing
operations. As discussed in the overview above, the Company cannot separately
report the results of operations of Polk Directories upon completion of the
integration.

Net sales of the large business segment for the quarter ended March 31,
2002 were $37.4 million, a 3% decline from $38.4 million for the same period of
2001. 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.
The decrease in net sales is principally due to softer customer demand for
data processing services related to a general slow-down in the United States
economy.

Database and production costs

Database and production costs for the quarter ended March 31, 2002 were
$21.3 million, or 28% of net sales, compared to $21.4 million, or 29% of net
sales for the same period of 2001. The decrease in database and production
costs as a percentage of net sales is primarily due to favorable changes in
product sales mix and resulting revenues in the large business segment.
Database and production costs for the large business segment were 21% of net
sales for the quarter ended March 31, 2002, compared to 23% of net sales for
the same period of 2001, reflecting a decrease of approximately $1.0 million
for database and production costs associated with the large business segment.
Database and production costs for the small business segment increased $0.9
million to $13.5 million for the quarter ended March 31, 2002 from $12.6
million for the same period of 2001, principally due to increased printing and
binding costs associated with the operations of Polk Directories.

Selling, general and administrative expenses

Selling, general and administrative expenses for the quarter ended March
31, 2002 were $31.9 million, or 42% of net sales, compared to $27.3 million, or
37% of net sales for the same period of 2001. The increase in selling, general
and administrative expenses as a percentage of net sales is principally due to
the acquisition of Polk Directories. Polk Directories utilizes a dedicated
sales force that has a higher operating cost structure as a percentage of sales
than the Companys existing businesses.

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##### Table of Contents



Depreciation and amortization expenses

Depreciation and amortization expenses for the quarter ended March 31, 2002
were $7.1 million, or 9% of net sales, compared to $12.7 million, or 17% of
net sales for the same period of 2001. The decrease in depreciation and
amortization expenses is principally due to the Companys adoption of
Statement of Financial Standards (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 has not yet completed the evaluation for the
initial impairment test that is required upon adoption of SFAS 142. The
Company expects to complete this initial impairment test within the first
six months of 2002. We currently do not expect to record an impairment
charge upon completion of the initial impairment test. However, there can
be no assurance that at the time the review is completed a material
impairment charge will not be recorded.

Non-cash stock compensation expense

During the quarter ended March 31, 2001, the Company recorded a
non-cash charge of $0.1 million, or less than 1% of net sales, related to
the issuance of stock options for infoUSA.com, a subsidiary of the Company.
The Company eliminated the minority interest in its infoUSA.com subsidiary
through the purchase of assets as of September 30, 2001, and will not incur
non-cash stock compensation expense related to the infoUSA.com subsidiary
options for the fourth quarter of 2001 and subsequent periods.

Restructuring costs

During the quarter ended March 31, 2002, the Company recorded
restructuring charges due to workforce reductions of $0.2 million as a part
of the Companys continuing strategy to reduce costs. The workforce
reduction charges included involuntary employee separation costs for 29
employees.

During the quarter ended March 31, 2001, the Company recorded
restructuring charges due to workforce reductions of $0.9 million as a part
of the Companys overall strategy to reduce costs and continue commitment to
its core businesses. The workforce reduction charges included involuntary
employee separation costs for 150 employees.

Acquisition costs

During the first quarter of 2002, the Company recorded
integration-related costs of $0.1 million. The integration-related costs
included consulting costs, information system conversion and other direct
integration-related charges. These costs were not directly related to the
acquisition of Polk Directories, and therefore could not be capitalized, but
were costs associated with the integration of Polk Directories operations
into the Companys existing operations.

Operating income

Including the factors previously described, the Company had operating
income of $16.2 million, or 21% of net sales for the quarter ended March 31,
2002, compared to operating income of $11.5 million, or 16% of net sales for
the same period in 2001.

Operating income for the small business segment for the quarter ended
March 31, 2002 was $15.5 million, or 39% of net sales, as compared to $17.4
million, or 49% of net sales for the same period in 2001. The decrease in
operating income is principally due to increased sales and marketing expenses
represented as a percentage of net sales associated with Polk Directories,
discussed in the selling, general administrative section above.

Operating income for the large business segment for the quarter ended
March 31, 2002 was $20.3 million, or 54% of net sales, as compared to $21.2
million, or 55% of net sales for the same period in 2001. The decrease in
operating income as a percentage of net sales is due to increased sales and
marketing costs.

Other income (expense), net

Other income (expense) net, was $(5.5) million, or (7)% of net sales, and
$(6.7) million, or (9)% of net sales, for the quarters ended March 31, 2002 and
2001, respectively. Other income (expense) is comprised of interest expense,
investment income, minority
interest in subsidiary and other income or expense items which do not
represent components of operating income (expense) of the Company.

15



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##### Table of Contents



The Company recorded a non-cash loss of $1.2 million, on the interest rate
swap agreement designated as a cash flow hedge for the Companys Senior Debt
Credit Facility described in Note 9, Loss on interest rate swap agreement.
The Senior Debt Credit Facility was refinanced on March 6, 2002. As a result
of the refinancing, the Company recorded a charge of $1.2 million for
unrealized interest expense that had been accounted for as a component of Other
Comprehensive Income of owners equity. The interest rate swap agreement will
not be accounted for as an interest rate hedge agreement for the remaining term
of the agreement, that concludes September 2002.

Interest expense was $4.4 million and $6.9 million for the quarters ended
March 31, 2002 and 2001, respectively. Interest expense on the Companys
senior credit facility decreased from $3.7 million for the quarter ended March
31, 2001, to $1.3 million for the same period of 2002 primarily due to
prepayments made on the credit facility. Investment income was $0.1 and $0.2
million for the quarters ended March 31, 2002 and 2001.

Minority interest in loss of subsidiary of $0.1 million for the quarter
ended March 31, 2001, represents the unaffiliated investors share of
infoUSA.coms net loss for the period then ended.

Income taxes

A provision for income taxes of $4.1 million and $2.9 million was recorded
for the quarters ended March 31, 2002 and 2001, respectively. The decrease in
the Companys effective tax rate to 38% in 2002 from 61% in 2001 is the result
of two items. First, the Companys net income did not include any deferred tax
benefits related to operating losses of its former subsidiary infoUSA.com due
to uncertainties surrounding the recoverability of these assets. infoUSA.com
was not previously included in the Companys consolidated Federal income tax
return. Second, the Companys pre-tax book income for the fiscal year 2001
included nondeductible amortization expense of $16.5 million for goodwill and
intangible assets with indefinite lives. Upon the adoption of SFAS No. 142 on
January 1, 2002, the Company ceased amortizing these assets for financial
reporting purposes and consequently, the amortization expense for those assets
does not affect either book or taxable income in 2002. These items
collectively increased the Companys effective tax rate by 36% over the Federal
statutory rate of 34% for the first quarter of 2001.

Extraordinary item, net of tax

On March 6, 2002, the Company refinanced its senior debt credit facility
administered by Deutsche Bank to Bank of America Securities, LLC. On March
6, 2002, the Company recorded an extraordinary item of $1.8 million, net of
income tax benefit of $1.2 million, for the net unamortized debt issue costs
related to the extinguishment of the senior debt credit facility with
Deutsche Bank.

EBITDA, as adjusted

The Companys EBITDA, as adjusted, was $23.4 million, or 30% of net sales
for the quarter ended March 31, 2002, and $24.3 million, or 33% of net sales
for the same period in 2001. EBITDA as adjusted is defined as operating
income adjusted to exclude depreciation, amortization and non-cash stock
compensation expenses.

LIQUIDITY AND CAPITAL RESOURCES

General information:

During 1999 in conjunction with the acquisition of Donnelley, the Company
negotiated a credit arrangement with Deutsche Bank. On March 6, 2002, the
Company refinanced the Senior Secured Credit facility administered by Deutsche
Bank with Bank of America Securities, LLC. Under the refinanced Senior Secured
Credit facility, the payment terms of the Term Loans A and B were changed such
that the total debt will be due in March 2006. Available borrowings under the
new Senior Secured Credit facility are $47.0 million for Term A with a maturity
of 3 years, $45.0 million for Term B with a maturity of 4 years and $18.0
million under a revolving credit facility with a maturity of 3 years. The new
credit facility also reduced the Revolving Credit Facility, as amended, from
$25 million to $18 million. As of March 31, 2002, the Company had no
borrowings under the Revolving Credit Facility, with the exception of two
outstanding letters of credit in the amount of $6.3 million reducing the
availability under the Revolving Credit Facility to $11.7 million.

16



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The Company is subject to certain financial covenants in its various
credit facilities, including total funded debt leverage ratio, senior debt
leverage ratio, fixed charge coverage ratio and minimum consolidated EBITDA.
Management believes the Company is in compliance with all restrictive covenants
of the Companys various debt facilities.

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.

Consolidated Statements of Cash Flows Information:

As of March 31, 2002, the Companys principal sources of liquidity
included cash and cash equivalents of $0.2 million, and $11.7 million available
under the Revolving Credit Facility described above. As of March 31, 2002, the
Company had a working capital deficit of $6.0 million.

Net cash provided by operating activities during the three months ended
March 31, 2002, totaled $8.7 million compared to $13.2 million during the same
period of 2001. The decrease is principally the result of decreases in accrued
payroll, prepaid 401K, interest rate swap accrued expenses and other accrued
expenses.

During the quarter ended March 31, 2002, the Company spent $1.2 million
for additions of property and equipment, $0.7 million related to software and
database development costs, $2.2 million for the acquisition of businesses and
$7.9 million on the repayment of long-term debt. The Company made voluntary
prepayments of $7.1 million on its senior debt credit facility during the
quarter ended March 31, 2002.

Consolidated Balance Sheet Information:

Trade accounts receivable increased from $44.9 million at December 31,
2001 to $45.3 million at March 31, 2002, with related days sales outstanding
(DSO) remaining unchanged at 54 days, for both quarters reported. List
brokerage trade accounts receivable increased from $17.0 million at December
31, 2001 to $21.9 million at March 31, 2002, principally due to the acquisition
of the assets of the email list business of Doubleclick, Inc.

Intangible assets, net of accumulated amortization, decreased from $284.7
million at December 31, 2001 to $280.0 million at March 31, 2002. The decrease
is principally due to the amortization of other intangible assets with
estimatable or definite lives related to the acquisitions described in the
Overview section. Depreciation and amortization expense totaled $7.1 million
during the quarter ended March 31, 2002, as compared to $12.7 million in 2001.

List brokerage trade accounts payable increased from $15.0 million at
December 31, 2001 to $17.3 million at March 31, 2002, principally due to the
acquisition of the assets of the email list business of Doubleclick, Inc.

Long term debt decreased from $205.9 million at December 31, 2001 to
$197.0 million at March 31, 2002. The Company made repayments on long-term
debt totaling $7.9 million during the quarter ended March 31, 2002.

ACCOUNTING STANDARDS

The Company adopted SFAS No. 133 effective January 1, 2001. The Company
used derivative financial instruments to manage the risk of a change in
interest rates on $60.5 million of the debt incurred for the acquisition of
Donnelley Marketing in July 1999. The Company does not enter into derivative
financial instruments for trading or speculative purposes. The Company
recorded a transition adjustment at January 1, 2001 of $0.3 million, net of
tax, as an accumulated other comprehensive loss to record the derivative
financial instrument on the Companys financial statements. During the quarter
ended March 31, 2002, the Company refinanced the senior debt credit facility as
described above and in Note 9 Loss on interest rate swap agreement and Note
10 Extraordinary item, net of tax. The Company recorded a non-cash loss of
$1.2 million, on the interest rate swap agreement designated as a cash flow
hedge for the Companys senior debt credit facility. As a result of the
refinancing, the interest rate swap agreement will not be accounted for as a
interest rate hedge agreement for the remaining term of the agreement, that
concludes September 2002.

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In June 2001, the Financial Accounting Standards Board issued SFAS No.
141, Business Combinations, which requires all business combinations
initiated after June 30, 2001 to be accounted for using the purchase
method.

In June 2001, the Financial Accounting Standards Board also issued
SFAS No. 142, Goodwill and Other Intangible Assets. This statement:



| |  |  | replaces the requirement to amortize goodwill and certain other
intangible assets with an annual impairment test, and
| | - |  | ---------------------------------------------------------------------------------------------------------------------
|
| |  |  | requires an evaluation of the useful lives of intangible assets
and an impairment test for goodwill upon adoption.   

Goodwill and intangible assets with indefinite lives that result from
acquisitions of businesses and minority interests after June 30, 2001, are
not subject to amortization under the provisions of SFAS 142. The
provisions of this statement are fully effective for fiscal years beginning
after December 15, 2001, so the Company adopted the provisions of SFAS 142
in the financial statements for the quarter ended March 31, 2002. Beginning
January 1, 2002, the Company ceased the amortization of goodwill, the
result of which is no further expense for the amortization of these
intangible assets in 2002 and future years. Amortization expense for
goodwill and intangible assets with indefinite lives was $16.5 million for
the full year 2001, compared to total intangible asset amortization of
$30.3 million for the full year 2001. The Company has not yet completed
the evaluation whether or not it has any impairment charges in our
consolidated financial statements that may result from the initial
impairment test that is required upon adoption of SFAS 142. The Company
expects to complete this initial impairment test within the first six
months of 2002. We currently do not expect to record an impairment charge
upon completion of the initial impairment test. However, there can be no
assurance that at the time the review is completed a material impairment
charge will not be recorded.

In October 2001, the Financial Accounting Standards Board also issued
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets. The provisions of this statement are effective for fiscal years
beginning after December 15, 2001. Therefore, the Company adopted the
provisions of SFAS No. 144 in its financial statements for the quarter
ended March 31, 2002. Management does not expect the adoption of this
statement to significantly impact the consolidated financial statements.

FACTORS THAT MAY AFFECT OPERATING RESULTS

Our Internet strategy is subject to review and revision.

Our Internet strategy is to leverage our proprietary content into
multiple vertical market applications and provide marketing solutions for
electronic commerce applications. The strategy we introduced in fiscal 2000
 of being an incubator of Internet database companies  has been revised
to a strategy of developing more efficient and profitable applications of
our content through the Internet. We cannot guarantee that our customers
will choose to have our products and services delivered to them over the
Internet. If we are successful in developing Internet applications, we may
face strong competition from current and potential competitors, including
other Internet companies and other providers of business and consumer
databases. We will review our Internet strategy from time to time and may
continue to revise it.

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:



| |  |  | In consumer sales lead generation products, Acxiom, Experian (a
subsidiary of Great Universal Stores, P.L.C. (GUS)), and Equifax,
both directly and through reseller networks.                                                                               
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In data processing services, Acxiom, Experian, Direct Marketing
Technologies (a subsidiary of GUS), and Harte-Hanks Communications,
Inc.                                                                                                                       
|
| |  |  | In business sales lead generation products, Experian and 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, from Regional Bell Operating
Companies and many smaller, regional directory publishers.                                                                                                                                      

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##### Table of Contents





| |  |  | In consumer products, certain smaller producers of CD-Rom
products.                                                                                         
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Technologies which companies may install and implement in-house
as part of their internal IS functions, instead of purchasing or
outsourcing such functions.

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 highly leveraged. If we are unable to service our debt as it becomes
due, our business would be harmed.

As of March 31, 2002, we had total indebtedness of approximately
$217.7 million, including $106.0 million of Notes under an indenture (the
Indenture) and $92.0 million under a $110 million Senior Secured Credit
Agreement. Substantially all of our assets are pledged as security under
the terms of the Credit Agreement. The indebtedness under the Credit
Agreement was refinanced March 6, 2002 and originally incurred in
connection with our acquisition of Donnelley Marketing in 1999. Our ability
to pay principal and interest on the Notes issued under the Indenture and
the indebtedness under the Credit Agreement and 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
Agreement 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 Notes issued under the Indenture and the
Credit Agreement) or seeking additional equity capital. We may not be able
to implement any such measures or obtain additional financing.

The terms of our current indebtedness restrict our ability to take certain
actions that fit our business strategy.

Our existing credit facilities contain certain covenants which
restrict our ability to:



| |  |  | Incur additional indebtedness;                                                                                                           
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Pay dividends and make certain other similar payments;                                                                                   
|
| |  |  | Guarantee indebtedness of others;                                                                                                        
|
| |  |  | Enter into certain transactions with affiliates;                                                                                         
|
| |  |  | Consummate certain asset sales, certain mergers and
consolidations, sales or other dispositions of all or substantially
all of our assets
|
| |  |  | Acquire other companies; and                                                                                                             
|
| |  |  | Obtain dividends or certain other payments from our subsidiaries.                                                                        

These restrictions may impair our ability to take certain actions that
fit our business strategy. A breach of any of these covenants could result
in an event of default under the terms of our existing credit facilities.
Upon the occurrence of an event of default, the lenders could elect to
declare all amounts outstanding, together with accrued interest, to be
immediately due and payable. If the payment of any such indebtedness is
accelerated, our assets may not be sufficient to repay in full the
indebtedness under our credit facilities and our other indebtedness.
Moreover, if we were unable to repay amounts owed to the lenders under our
credit facilities, the lenders could foreclose on our assets that secure
the indebtedness.

Under the terms of our current indebtedness, the occurrence of a change of
control of infoUSA could have serious adverse financial consequences to us.

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If a change of control of infoUSA were to occur, we would in certain
circumstances be required to make an offer to purchase all outstanding
Notes under the Indenture at a purchase price equal to 101% of the
principal amount of the Notes, together with accrued and unpaid interest.
There can be no guarantee that, if this were to happen, we would have
sufficient funds to purchase the Notes. In addition, a change of control
and any repurchase of the Notes upon a change of control may constitute an
event of default under our other current or future credit facilities. In
that event, our obligations under such credit facilities could be declared
due and payable by the lenders, and the lenders may also have the right to
be paid for all outstanding obligations under such credit facilities before
we repurchase any of the Notes.

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.

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.

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. 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 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 sixteen
acquisitions since mid-1996 and completed the integration of these
acquisitions into our existing business by the end of the quarter as of
March 31, 2002. We continue to evaluate strategic opportunities available
to us
20Table of Contentsand 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.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company is not exposed to significant future earnings or cash flow
exposures from changes in interest rates on long-term debt as a significant
portion of the Companys debt is at fixed interest rates and the Company has
entered into long-term interest rate swap agreements used to reduce the
potential impact of changes in interest rates on floating rate debt. 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 in Canada are not material.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSAt the 2002 Annual
Meeting of Stockholders of the Company held on May 3, 2002, the
stockholders voted and approved the following items:1. Elected the following directors to the Board of Directors for a term of three years.

|                 |  |                 |  |                    
|---------------- |  | --------------- |  | -------------------
|Rob S. Chandra   |  | FOR: 43,528,027 |  | WITHHELD: 1,971,736
|                
|J. Robert Kerrey |  | FOR: 43,516,305 |  | WITHHELD: 1,983,458

2. The stockholders also ratified the appointment of KPMG LLP as the Companys independent
auditors to examine the financial statements of the Company for the fiscal year 2002.

|                |  |                    |  |                
|--------------- |  | ------------------ |  | ---------------
|FOR: 42,983,637 |  | AGAINST: 2,480,180 |  | ABSTAIN: 35,946

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##### Table of Contents






infoUSA INC.
FORM 10-Q

FOR THE QUARTER ENDED

MARCH 31, 2002

PART II

OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits



| |     
| | ----
| | None

(b)  Report on Form 8-K



| |     
| | ----
| | None

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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: May 14, 2002 |  | /s/ STORMY L. DEANStormy L. Dean, Chief Financial Officer
(principal financial officer)

23