Exhibit 99.1
CONFIDENTIAL INFORMATION MEMORANDUM EXCERPTS
FORWARD LOOKING STATEMENTS
The statements contained in these Confidential Information Memorandum Excerpts, other than historical data and information, constitute forward looking statements that are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, but are not limited to, recent changes in senior management, indemnification obligations to current and former directors and officers, the successful completion of the announced infoGROUP Inc. (the “Company” or “Infogroup”) acquisition through merger, integration of future acquisitions, fluctuations in operating results, failure to successfully implement our Internet strategy or to grow our Internet revenue, effects of leverage, conditions in the credit markets, changes in technology, changes in laws related to data privacy, a failure of database integrity, loss of a key business asset and increased competition. More information about potential factors that could affect the Company’s business and financial results is included in the Company’s periodic filings with the Securities and Exchange Commission, including in its annual report on Form 10-K for the fiscal year ended December 31, 2009.
NON-GAAP FINANCIAL MEASURES
In addition to presenting results determined in accordance with generally accepted accounting principles, or GAAP, this release also presents non-GAAP financial measures. Investors are referred to the tables included in this release for a reconciliation of these non-GAAP measures to GAAP financial measures.
Management considers GAAP and non-GAAP financial measures in evaluating the operating performance of the Company. EBITDA is commonly used as an analytical indicator within Infogroup’s industry. Adjusted EBITDA, adjusted earnings per share, gross profit, change in working capital, adjusted unlevered free cash flow, non-GAAP selling, general and administrative expenses, and non-GAAP operating income exclude items that management believes result from events that are not recurring and are not part of on-going operations. Management believes these non-GAAP financial measures also provide useful supplemental information to investors in evaluating the aggregate performance of the Company’s operating businesses.
All companies do not calculate non-GAAP measures in the same manner and the non-GAAP financial measures presented in this press release may not be comparable to similar measures used by other companies. Non-GAAP measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. You should not consider non-GAAP financial measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.
1
TheData Groupprovides its Enterprise and Small to Medium Size Businesses (“SMB”) customers with unique direct marketing solutions and services by leveraging its proprietary databases. Approximately 35% of Data Group sales are for data and services which are used by its clients for digital direct marketing.
TheServices Groupprovides direct mail and email marketing solutions, customer database management, list brokerage and management and catalog marketing services through both traditional and digital channels of distribution. Approximately 50% of Services Group sales are for data and services which are used by its clients for digital direct marketing.
TheResearch Groupprovides market and business research including customer satisfaction surveys, client and market intelligence, loyalty management employee surveys and opinion polling. Infogroup’s Research Group is among the top 20 largest research firms globally, with 35% of its revenue generated overseas.
2
Annual Financials
($ in millions)
($ in millions)
| Fiscal Year Ending December 31, | ||||||||||||
| 2007(1) | 2008 | 2009 | ||||||||||
Revenue | ||||||||||||
Data Group | $ | 341.8 | $ | 309.5 | $ | 255.8 | ||||||
% growth | (9.5 | %) | (17.3 | %) | ||||||||
Services Group | $ | 166.4 | $ | 163.3 | $ | 146.2 | ||||||
% growth | (1.9 | %) | (10.5 | %) | ||||||||
Research Group | $ | 118.5 | $ | 115.9 | $ | 97.9 | ||||||
% growth | (2.2 | %) | (15.5 | %) | ||||||||
Corporate | $ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||
Total Revenue | $ | 626.7 | $ | 588.7 | $ | 499.9 | ||||||
% growth | (6.1 | %) | (15.1 | %) | ||||||||
Adj. EBITDA | ||||||||||||
Data Group(2) | $ | 103.7 | $ | 88.9 | $ | 77.4 | ||||||
% margin | 30.3 | % | 28.7 | % | 30.3 | % | ||||||
% growth | (14.3 | %) | (12.9 | %) | ||||||||
Services Group(2) | $ | 43.4 | $ | 42.2 | $ | 40.0 | ||||||
% margin | 26.1 | % | 25.8 | % | 27.4 | % | ||||||
% growth | (2.9 | %) | (5.0 | %) | ||||||||
Research Group(2) | $ | 7.7 | $ | 11.7 | $ | 8.3 | ||||||
% margin | 6.5 | % | 10.1 | % | 8.5 | % | ||||||
% growth | 51.9 | % | (28.9 | %) | ||||||||
Corporate | $ | (35.6 | ) | $ | (37.0 | ) | $ | (33.4 | ) | |||
Total Adj. EBITDA | $ | 119.2 | $ | 105.7 | $ | 92.4 | ||||||
% margin | 19.0 | % | 18.0 | % | 18.5 | % | ||||||
% growth | (11.3 | %) | (12.6 | %) | ||||||||
Other Key Items | ||||||||||||
| Capital Expenditures | $ | 18.5 | $ | 28.0 | $ | 18.9 | ||||||
Change in Working Capital(3) | $ | (6.2 | ) | $ | (21.2 | ) | $ | 13.5 | ||||
See the Appendix for Reconciliations of Non-GAAP Measures
| (1) | 2007 figures adjusted for full year impact of Infogroup’s acquisition of Expresscopy, SECO, Direct Media, NWC, Guideline and NWRG for a total $82 million in revenue and $5 million in EBITDA. | |
| (2) | Adj. EBITDA excludes unallocated corporate expenses and is adjusted to exclude non-recurring items. | |
| (3) | Positive working capital values represent source of cash. Working capital adjusted to exclude accruals for restructuring expenses ($1 million in 2006, $6 million in 2007, $9 million in 2008 and $7 million in 2009). |
3
2009 QUARTERLY FINANCIALS
($ in millions)
($ in millions)
| Fiscal Year Ending December 31, 2009 | ||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FYE 09 | ||||||||||||||||
Net Sales | ||||||||||||||||||||
Data Group | $ | 67.3 | $ | 62.1 | $ | 64.0 | $ | 62.4 | $ | 255.8 | ||||||||||
y-o-y Change % | (19.3 | %) | (22.0 | %) | (14.4 | %) | (12.9 | %) | (17.3 | %) | ||||||||||
Services Group | $ | 35.8 | $ | 34.8 | $ | 37.0 | $ | 38.7 | $ | 146.2 | ||||||||||
y-o-y Change % | (11.6 | %) | (11.8 | %) | (11.0 | %) | (7.7 | %) | (10.5 | %) | ||||||||||
Research Group | $ | 24.5 | $ | 24.7 | $ | 24.0 | $ | 24.7 | $ | 97.9 | ||||||||||
y-o-y Change % | (16.7 | %) | (16.1 | %) | (16.3 | %) | (12.9 | %) | (15.5 | %) | ||||||||||
Corporate | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||||||
Total Net Sales | $ | 127.5 | $ | 121.6 | $ | 125.0 | $ | 125.8 | $ | 499.9 | ||||||||||
y-o-y Change % | (16.8 | %) | (18.1 | %) | (13.8 | %) | (11.3 | %) | (15.1 | %) | ||||||||||
Adj. EBITDA | ||||||||||||||||||||
Data Group(1) | $ | 19.1 | $ | 17.2 | $ | 21.2 | $ | 19.9 | $ | 77.4 | ||||||||||
% margin | 28.4 | % | 27.7 | % | 33.1 | % | 31.9 | % | 30.3 | % | ||||||||||
y-o-y Change % | (14.9 | %) | (26.1 | %) | 11.5 | % | (17.6 | %) | (12.9 | %) | ||||||||||
Services Group(1) | $ | 8.1 | $ | 8.5 | $ | 11.4 | $ | 12.0 | $ | 40.0 | ||||||||||
% margin | 22.7 | % | 24.5 | % | 30.9 | % | 30.9 | % | 27.4 | % | ||||||||||
y-o-y Change % | (13.2 | %) | (4.6 | %) | (2.4 | %) | (1.6 | %) | (5.0 | %) | ||||||||||
Research Group(1) | $ | 1.7 | $ | 2.3 | $ | 2.2 | $ | 2.1 | $ | 8.3 | ||||||||||
% margin | 7.1 | % | 9.2 | % | 9.3 | % | 8.4 | % | 8.5 | % | ||||||||||
y-o-y Change % | (29.6 | %) | (16.0 | %) | (28.9 | %) | (38.6 | %) | (28.9 | %) | ||||||||||
Corporate | $ | (9.9 | ) | $ | (7.5 | ) | $ | (8.6 | ) | $ | (7.4 | ) | $ | (33.4 | ) | |||||
Total Adj. EBITDA | $ | 19.1 | $ | 20.5 | $ | 26.2 | $ | 26.6 | $ | 92.4 | ||||||||||
% margin | 15.0 | % | 16.8 | % | 21.0 | % | 21.1 | % | 18.5 | % | ||||||||||
y-o-y Change % | (26.6 | %) | (17.8 | %) | 8.0 | % | (12.9 | %) | (12.6 | %) | ||||||||||
| Capital Expenditures | $ | 3.6 | $ | 4.6 | $ | 4.1 | $ | 6.7 | $ | 18.9 | ||||||||||
See the Appendix for Reconciliations of Non-GAAP Measures
| (1) | Segment EBITDA excludes unallocated corporate expenses and is adjusted to exclude non-recurring items. |
4
Non-GAAP Gross Profit Reconciliation
| For the Years Ended December 31, | ||||||||||||
| (in millions) | 2007 | 2008 | 2009 | |||||||||
| Net sales per 10-K | $ | 545 | $ | 589 | $ | 500 | ||||||
| Acquired net sales | 82 | — | — | |||||||||
| Total net sales | 627 | 589 | 500 | |||||||||
| Less cost of goods and services | ||||||||||||
| Cost of goods and services per 10-K | 169 | 203 | 185 | |||||||||
| Acquired cost of goods and services | 35 | — | — | |||||||||
| Total cost of goods and services | 204 | 203 | 185 | |||||||||
| Gross Profit | $ | 423 | $ | 386 | $ | 315 | ||||||
Non-GAAP Gross Profit Reconciliation
| Fiscal Year Ending December 31, 2008 | ||||||||||||||||||||
| (in millions) | Q1 | Q2 | Q3 | Q4 | FYE 2008 | |||||||||||||||
| Net sales per 10-K | $ | 153 | $ | 148 | $ | 145 | $ | 142 | $ | 589 | ||||||||||
| Acquired net sales | — | — | — | — | — | |||||||||||||||
| Total net sales | 153 | 148 | 145 | 142 | 589 | |||||||||||||||
| Less cost of goods and services | ||||||||||||||||||||
| Cost of goods and services per 10-K | 51 | 52 | 51 | 49 | 203 | |||||||||||||||
| Acquired cost of goods and services | — | — | — | — | — | |||||||||||||||
| Total cost of goods and services | 51 | 52 | 51 | 49 | 203 | |||||||||||||||
| Gross Profit | $ | 102 | $ | 96 | $ | 94 | $ | 93 | $ | 386 | ||||||||||
Non-GAAP Gross Profit Reconciliation
| Fiscal Year Ending December 31, 2009 | ||||||||||||||||||||
| (in millions) | Q1 | Q2 | Q3 | Q4 | FYE 2009 | |||||||||||||||
| Net sales per 10-K | $ | 128 | $ | 122 | $ | 125 | $ | 126 | $ | 500 | ||||||||||
| Acquired net sales | — | — | — | — | — | |||||||||||||||
| Total net sales | 128 | 122 | 125 | 126 | 500 | |||||||||||||||
| Less cost of goods and services | ||||||||||||||||||||
| Cost of goods and services per 10-K | 47 | 46 | 46 | 47 | 185 | |||||||||||||||
| Acquired cost of goods and services | — | — | — | — | — | |||||||||||||||
| Total cost of goods and services | 47 | 46 | 46 | 47 | 185 | |||||||||||||||
| Gross Profit | $ | 81 | $ | 76 | $ | 79 | $ | 79 | $ | 315 | ||||||||||
5
BUSINESS DATABASE
Competitor Accuracy Comparison
| Description | Infogroup | D&B | Experian | |||||||||
| Company Name Accuracy | 96.8 | % | 90.3 | % | 92.6 | % | ||||||
| Address Accuracy | 95.3 | % | 89.8 | % | 91.9 | % | ||||||
| Phone Number Accuracy | 90.1 | % | 74.6 | % | 66.7 | % | ||||||
| Fax Number Accuracy | 92.5 | % | 85.5 | % | n/a | |||||||
| Line of Business Accuracy | 85.9 | % | 67.6 | % | 67.9 | % | ||||||
| Employment Size Accuracy | 86.3 | % | 83.1 | % | 79.2 | % | ||||||
| Executive Name Accuracy | 79.3 | % | 74.8 | % | 74.2 | % | ||||||
| Executive Title Accuracy | 87.9 | % | 76.5 | % | 82.7 | % | ||||||
| Deliverability | 93.9 | % | 89.1 | % | 90.6 | % | ||||||
| Out of Business Rate | 4.4 | % | 11.6 | % | 14.9 | % | ||||||
Source: The Peter Kiewit Institute’s (PKI) College of Information Science & Technology (IS&T) at the University of Nebraska at Omaha (UNO), 2009.
6
OWNED AND LICENSED DATA
Business Database:
| • | 15.5 million U.S. and Canadian businesses | ||
| • | 20 million business e-mail addresses | ||
| • | 2.0 million U.K. businesses | ||
| • | 2.7 million business addresses with color photos | ||
| • | 2.3 million brand new businesses | ||
| • | 1.6 million bankruptcy filers | ||
| • | 12.3 million executives and professionals | ||
| • | 5.5 million small business owners |
Consumer Database:
| • | 215 million consumers | ||
| • | 132 million households | ||
| • | 105 million consumer e-mail addresses | ||
| • | 64 million targetable consumer e-mail addresses | ||
| • | 16 million new movers per year | ||
| • | 2.1 million new homeowners per year | ||
| • | 1.6 million bankruptcies per year | ||
| • | 67 million homeowners |
7
| (1) | Estimated revenue from Recurring Customers = 2009 Year Net Sales from 2008 Customers / Total Net Sales in Current Year. |
Infogroup serves a diversified mix of over 89,000 customers spread across B2B and B2C, SMB and Enterprise and traditional and digital channels of distribution
Note: Excludes Research Group.
8
Infogroup‘s 89,000 customers span multiple industry sectors.
9
2008 to 2009 SG&A Bridge
| (1) | Excludes asset impairments, gain on sales, legal fees and restructuring costs. |
See the Appendix for Reconciliations of Non-GAAP Measures
10
Data Group — Customer Type and End-Use (% of 2009 Net Sales)
11
APPENDIX — RECONCILIATIONS OF NON-GAAP MEASURES
EBITDA and Adjusted EBITDA Reconciliations
2007 and 2008
2007 and 2008
| (in millions) | 2007 | Q1 | Q2 | Q3 | Q4 | 2008 | ||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
GAAP Data Group | $ | 330.5 | $ | 83.4 | $ | 79.6 | $ | 74.8 | $ | 71.6 | $ | 309.5 | ||||||||||||
| Acquired net sales (note 1) | 11.3 | — | — | — | — | — | ||||||||||||||||||
Non-GAAP Data Group net sales | 341.8 | 83.4 | 79.6 | 74.8 | 71.6 | 309.5 | ||||||||||||||||||
GAAP Services Group | 136.8 | 40.4 | 39.4 | 41.5 | 41.9 | 163.3 | ||||||||||||||||||
| Acquired net sales (note 2) | 29.7 | — | — | — | — | — | ||||||||||||||||||
Non-GAAP Services Group net sales | 166.4 | 40.4 | 39.4 | 41.5 | 41.9 | 163.3 | ||||||||||||||||||
GAAP Research Group | 77.4 | 29.4 | 29.4 | 28.7 | 28.4 | 115.9 | ||||||||||||||||||
| Acquired net sales (note 3) | 41.1 | — | — | — | — | — | ||||||||||||||||||
Non-GAAP Research Group net sales | 118.5 | 29.4 | 29.4 | 28.7 | 28.4 | 115.9 | ||||||||||||||||||
GAAP Corporate | — | — | — | — | — | — | ||||||||||||||||||
Total GAAP net sales | 544.7 | 153.3 | 148.5 | 145.0 | 141.9 | 588.7 | ||||||||||||||||||
| Acquired net sales | 82.0 | — | — | — | — | — | ||||||||||||||||||
Total Non-GAAP net sales | 626.7 | 153.3 | 148.5 | 145.0 | 141.9 | 588.7 | ||||||||||||||||||
EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||
GAAP net income (loss) before income taxes Data Group | $ | 88.4 | $ | 18.1 | $ | 19.0 | $ | 14.5 | $ | 13.7 | $ | 65.3 | ||||||||||||
| Interest expense | — | — | — | — | — | — | ||||||||||||||||||
| Depreciation and amortization of operating assets | 9.6 | 2.6 | 2.7 | 2.8 | 4.0 | 12.1 | ||||||||||||||||||
| Amortization of intangible assets | 6.9 | 1.4 | 1.3 | 1.3 | 1.3 | 5.3 | ||||||||||||||||||
Non-GAAP EBITDA Data Group | $ | 104.9 | $ | 22.0 | $ | 23.1 | $ | 18.6 | $ | 19.0 | $ | 82.6 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Naviant litigation settlement | (9.2 | ) | — | — | — | — | — | |||||||||||||||||
| Acquired EBITDA (note 1) | 1.3 | — | — | — | — | — | ||||||||||||||||||
| Restructuring costs | 6.6 | 0.5 | 0.2 | 0.4 | 0.4 | 1.5 | ||||||||||||||||||
| Impairments and write-down of assets | — | — | — | — | 4.7 | 4.7 | ||||||||||||||||||
| Litigation settlement charges | — | — | — | — | — | — | ||||||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | — | ||||||||||||||||||
Non-GAAP adjusted EBITDA Data Group | $ | 103.7 | $ | 22.5 | $ | 23.2 | $ | 19.0 | $ | 24.2 | $ | 88.9 | ||||||||||||
% margin | 30.3 | % | 26.9 | % | 29.2 | % | 25.4 | % | 33.8 | % | 28.7 | % | ||||||||||||
GAAP net income (loss) before income taxes Services Group | $ | 33.4 | $ | 7.3 | $ | 6.5 | $ | 8.0 | $ | 7.9 | $ | 29.6 | ||||||||||||
| Interest expense | — | — | — | — | — | — | ||||||||||||||||||
| Depreciation and amortization of operating assets | 4.8 | 1.0 | 1.0 | 1.0 | 1.5 | 4.6 | ||||||||||||||||||
| Amortization of intangible assets | 3.9 | 1.0 | 1.2 | 1.1 | 1.0 | 4.3 | ||||||||||||||||||
Non-GAAP EBITDA Services Group | $ | 42.0 | $ | 9.3 | $ | 8.7 | $ | 10.1 | $ | 10.4 | $ | 38.5 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
12
| (in millions) | 2007 | Q1 | Q2 | Q3 | Q4 | 2008 | ||||||||||||||||||
| Naviant litigation settlement | — | — | — | — | — | — | ||||||||||||||||||
| Acquired EBITDA (note 2) | 1.4 | — | — | — | — | — | ||||||||||||||||||
| Restructuring costs | — | 0.0 | 0.3 | 1.6 | 1.8 | 3.7 | ||||||||||||||||||
| Impairments and write-down of assets | — | — | — | — | — | — | ||||||||||||||||||
| Litigation settlement charges | — | — | — | — | — | — | ||||||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | — | ||||||||||||||||||
Non-GAAP adjusted EBITDA Services Group | $ | 43.4 | $ | 9.3 | $ | 8.9 | $ | 11.7 | $ | 12.2 | $ | 42.2 | ||||||||||||
% margin | 26.1 | % | 23.1 | % | 22.6 | % | 28.2 | % | 29.0 | % | 25.8 | % | ||||||||||||
GAAP net income (loss) before income taxes Research Group | $ | 1.7 | $ | 1.0 | $ | (0.3 | ) | $ | 1.8 | $ | 2.0 | $ | 4.5 | |||||||||||
| Interest expense | — | — | — | — | — | — | ||||||||||||||||||
| Depreciation and amortization of operating assets | 1.5 | 0.5 | 0.5 | 0.5 | 0.5 | 2.1 | ||||||||||||||||||
| Amortization of intangible assets | 2.0 | 0.8 | 0.8 | 0.8 | 0.8 | 3.3 | ||||||||||||||||||
Non-GAAP EBITDA Research Group | $ | 5.2 | $ | 2.4 | $ | 1.1 | $ | 3.1 | $ | 3.3 | $ | 9.8 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Naviant litigation settlement | — | — | — | — | — | — | ||||||||||||||||||
| Acquired EBITDA (note 3) | 2.5 | — | — | — | — | — | ||||||||||||||||||
| Restructuring costs | — | 0.1 | 1.6 | 0.0 | — | 1.7 | ||||||||||||||||||
| Impairments and write-down of assets | — | — | — | — | 0.0 | 0.0 | ||||||||||||||||||
| Litigation settlement charges | — | 0.0 | 0.0 | 0.0 | (0.0 | ) | 0.1 | |||||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | — | ||||||||||||||||||
Non-GAAP adjusted EBITDA Research Group | $ | 7.7 | $ | 2.5 | $ | 2.7 | $ | 3.1 | $ | 3.4 | $ | 11.7 | ||||||||||||
% margin | 6.5 | % | 8.4 | % | 9.2 | % | 10.9 | % | 11.8 | % | 10.1 | % | ||||||||||||
GAAP net income (loss) before income taxes Corporate Activities | $ | (65.7 | ) | $ | (18.7 | ) | $ | (20.9 | ) | $ | (40.3 | ) | $ | (20.5 | ) | $ | (100.3 | ) | ||||||
| Interest expense | 21.0 | 5.4 | 3.7 | 4.3 | 4.8 | 18.1 | ||||||||||||||||||
| Depreciation and amortization of operating assets | 3.0 | 1.1 | 1.0 | 0.9 | (0.4 | ) | 2.6 | |||||||||||||||||
| Amortization of intangible assets | 0.0 | — | — | — | 0.0 | 0.0 | ||||||||||||||||||
Non-GAAP EBITDA Corporate Activities | $ | (41.7 | ) | $ | (12.2 | ) | $ | (16.1 | ) | $ | (35.1 | ) | $ | (16.1 | ) | $ | (79.6 | ) | ||||||
Adjustments: | ||||||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | 5.4 | $ | 3.7 | $ | 6.0 | $ | 14.3 | $ | (0.3 | ) | $ | 23.6 | |||||||||||
| Naviant litigation settlement | — | — | — | — | — | — | ||||||||||||||||||
| Acquired EBITDA | — | — | — | — | — | — | ||||||||||||||||||
| Restructuring costs | — | 0.1 | 0.1 | 10.5 | 0.8 | 11.6 | ||||||||||||||||||
| Impairments and write-down of assets | — | — | — | 0.7 | 5.8 | 6.5 | ||||||||||||||||||
| Litigation settlement charges | — | — | — | — | 0.5 | 0.5 | ||||||||||||||||||
| Non-cash stock compensation expense | 0.8 | 0.2 | 0.1 | 0.1 | 0.1 | 0.5 | ||||||||||||||||||
Non-GAAP adjusted EBITDA Corporate Activities | $ | (35.6 | ) | $ | (8.2 | ) | $ | (10.0 | ) | $ | (9.6 | ) | $ | (9.2 | ) | $ | (37.0 | ) | ||||||
Total GAAP net income (loss) before income taxes | $ | 57.8 | $ | 7.6 | $ | 4.3 | $ | (16.0 | ) | $ | 3.1 | $ | (1.0 | ) | ||||||||||
| Interest expense | 21.0 | 5.4 | 3.7 | 4.3 | 4.8 | 18.1 | ||||||||||||||||||
| Depreciation and amortization of operating assets | 18.9 | 5.2 | 5.3 | 5.2 | 5.6 | 21.4 | ||||||||||||||||||
| Amortization of intangible assets | 12.8 | 3.2 | 3.3 | 3.2 | 3.2 | 12.9 | ||||||||||||||||||
Total non-GAAP EBITDA | 110.4 | 21.4 | 16.6 | (3.3 | ) | 16.6 | 51.3 | |||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | 5.4 | 3.7 | 6.0 | 14.3 | (0.3 | ) | 23.6 | |||||||||||||||||
| Naviant litigation settlement | (9.2 | ) | — | — | — | — | — | |||||||||||||||||
13
| (in millions) | 2007 | Q1 | Q2 | Q3 | Q4 | 2008 | ||||||||||||||||||
| Acquired EBITDA | 5.2 | — | — | — | — | — | ||||||||||||||||||
| Restructuring costs | 6.6 | 0.8 | 2.2 | 12.6 | 3.0 | 18.5 | ||||||||||||||||||
| Impairments and write-down of assets | — | — | — | 0.7 | 10.6 | 11.3 | ||||||||||||||||||
| Litigation settlement charges | — | 0.0 | 0.0 | 0.0 | 0.5 | 0.6 | ||||||||||||||||||
| Non-cash stock compensation expense | 0.8 | 0.2 | 0.1 | 0.1 | 0.1 | 0.5 | ||||||||||||||||||
Total non-GAAP adjusted EBITDA | $ | 119.2 | $ | 26.0 | $ | 24.9 | $ | 24.3 | $ | 30.5 | $ | 105.7 | ||||||||||||
% margin | 19.0 | % | 17.0 | % | 16.8 | % | 16.7 | % | 21.5 | % | 18.0 | % | ||||||||||||
Note 1) Data Group for 2007 includes a full year of results for the following acquisitions: expresscopy.com, SECO Financial
Note 2) Services Group for 2007 includes a full year of results for the following acquisitions: Direct Media, Inc.
Note 3) Research Group for 2007 includes a full year of results for the following acquisitions: NWC Research, Guideline, Inc., Northwest Research Group
EBITDA and Adjusted EBITDA Reconciliations
2009
2009
| (in millions) | Q1 | Q2 | Q3 | Q4 | 2009 | |||||||||||||||
Net Sales | ||||||||||||||||||||
GAAP Data Group | $ | 67.3 | $ | 62.1 | $ | 64.0 | $ | 62.4 | $ | 255.8 | ||||||||||
| Acquired net sales (note 1) | — | — | — | — | — | |||||||||||||||
Non-GAAP Data Group net sales | 67.3 | 62.1 | 64.0 | 62.4 | 255.8 | |||||||||||||||
GAAP Services Group | 35.8 | 34.8 | 37.0 | 38.7 | 146.2 | |||||||||||||||
| Acquired net sales (note 2) | — | — | — | — | — | |||||||||||||||
Non-GAAP Services Group net sales | 35.8 | 34.8 | 37.0 | 38.7 | 146.2 | |||||||||||||||
GAAP Research Group | 24.5 | 24.7 | 24.0 | 24.7 | 97.9 | |||||||||||||||
| Acquired net sales (note 3) | — | — | — | — | — | |||||||||||||||
Non-GAAP Research Group net sales | 24.5 | 24.7 | 24.0 | 24.7 | 97.9 | |||||||||||||||
GAAP Corporate | — | — | — | — | — | |||||||||||||||
Total GAAP net sales | 127.5 | 121.6 | 125.0 | 125.8 | 499.9 | |||||||||||||||
| Acquired net sales | — | — | — | — | — | |||||||||||||||
Total Non-GAAP net sales | 127.5 | 121.6 | 125.0 | 125.8 | 499.9 | |||||||||||||||
EBITDA and Adjusted EBITDA | ||||||||||||||||||||
GAAP net income (loss) before income taxes Data Group | $ | 12.9 | $ | 7.0 | $ | 16.3 | $ | 16.5 | $ | 52.7 | ||||||||||
| Interest expense | — | — | — | — | — | |||||||||||||||
| Depreciation and amortization of operating assets | 2.4 | 2.6 | 2.0 | 2.1 | 9.2 | |||||||||||||||
| Amortization of intangible assets | 1.2 | 1.1 | 0.8 | 0.8 | 4.0 | |||||||||||||||
Non-GAAP EBITDA Data Group | $ | 16.6 | $ | 10.7 | $ | 19.1 | $ | 19.4 | $ | 65.8 | ||||||||||
Adjustments: | ||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Naviant litigation settlement | — | — | — | — | — | |||||||||||||||
| Acquired EBITDA (note 1) | — | — | — | — | — | |||||||||||||||
| Restructuring costs | 1.2 | 3.1 | 1.9 | 0.1 | 6.3 | |||||||||||||||
| Impairments and write-down of assets | 1.3 | 3.2 | 0.1 | 0.4 | 5.1 | |||||||||||||||
| Litigation settlement charges | 0.0 | 0.1 | 0.0 | — | 0.1 | |||||||||||||||
14
| (in millions) | Q1 | Q2 | Q3 | Q4 | 2009 | |||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | |||||||||||||||
Non-GAAP adjusted EBITDA Data Group | $ | 19.1 | $ | 17.2 | $ | 21.2 | $ | 19.9 | $ | 77.4 | ||||||||||
% margin | 28.4 | % | 27.7 | % | 33.1 | % | 31.9 | % | 30.3 | % | ||||||||||
GAAP net income (loss) before income taxes Services Group | $ | 5.0 | $ | 5.3 | $ | 9.0 | $ | 9.7 | $ | 29.0 | ||||||||||
| Interest expense | — | — | — | — | — | |||||||||||||||
| Depreciation and amortization of operating assets | 1.1 | 1.2 | 1.2 | 1.5 | 5.0 | |||||||||||||||
| Amortization of intangible assets | 0.9 | 0.9 | 0.7 | 0.7 | 3.0 | |||||||||||||||
Non-GAAP EBITDA Services Group | $ | 7.0 | $ | 7.3 | $ | 10.8 | $ | 11.9 | $ | 37.0 | ||||||||||
Adjustments: | ||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Naviant litigation settlement | — | — | — | — | — | |||||||||||||||
| Acquired EBITDA (note 2) | — | — | — | — | — | |||||||||||||||
| Restructuring costs | 0.9 | 1.2 | 0.5 | 0.1 | 2.7 | |||||||||||||||
| Impairments and write-down of assets | — | — | 0.1 | 0.0 | 0.1 | |||||||||||||||
| Litigation settlement charges | 0.3 | 0.0 | 0.0 | (0.0 | ) | 0.3 | ||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | |||||||||||||||
Non-GAAP adjusted EBITDA Services Group | $ | 8.1 | $ | 8.5 | $ | 11.4 | $ | 12.0 | $ | 40.0 | ||||||||||
% margin | 22.7 | % | 24.5 | % | 30.9 | % | 30.9 | % | 27.4 | % | ||||||||||
GAAP net income (loss) before income taxes Research Group | $ | (0.2 | ) | $ | 0.1 | $ | (0.7 | ) | $ | (7.7 | ) | $ | (8.4 | ) | ||||||
| Interest expense | — | — | — | — | — | |||||||||||||||
| Depreciation and amortization of operating assets | 0.5 | 0.5 | 0.5 | 0.5 | 1.9 | |||||||||||||||
| Amortization of intangible assets | 0.8 | 0.8 | 0.8 | 0.9 | 3.4 | |||||||||||||||
Non-GAAP EBITDA Research Group | $ | 1.2 | $ | 1.4 | $ | 0.6 | $ | (6.4 | ) | $ | (3.2 | ) | ||||||||
Adjustments: | ||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Naviant litigation settlement | — | — | — | — | — | |||||||||||||||
| Acquired EBITDA (note 3) | — | — | — | — | — | |||||||||||||||
| Restructuring costs | 0.6 | 0.8 | 1.6 | 0.7 | 3.7 | |||||||||||||||
| Impairments and write-down of assets | 0.0 | 0.0 | 0.0 | 7.7 | 7.8 | |||||||||||||||
| Litigation settlement charges | — | — | — | — | — | |||||||||||||||
| Non-cash stock compensation expense | — | — | — | — | — | |||||||||||||||
Non-GAAP adjusted EBITDA Research Group | $ | 1.7 | $ | 2.3 | $ | 2.2 | $ | 2.1 | $ | 8.3 | ||||||||||
% margin | 7.1 | % | 9.2 | % | 9.3 | % | 8.4 | % | 8.5 | % | ||||||||||
GAAP net income (loss) before income taxes Corporate Activities | $ | (18.9 | ) | $ | (14.4 | ) | $ | (16.8 | ) | $ | (12.4 | ) | $ | (62.5 | ) | |||||
| Interest expense | 3.2 | 2.2 | 2.1 | 1.9 | 9.5 | |||||||||||||||
| Depreciation and amortization of operating assets | 0.8 | 0.8 | 1.0 | 1.6 | 4.1 | |||||||||||||||
| Amortization of intangible assets | — | — | — | — | — | |||||||||||||||
Non-GAAP EBITDA Corporate Activities | $ | (14.9 | ) | $ | (11.5 | ) | $ | (13.7 | ) | $ | (8.8 | ) | $ | (48.9 | ) | |||||
Adjustments: | ||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | $ | 3.8 | $ | 1.9 | $ | 2.0 | $ | 0.8 | $ | 8.5 | ||||||||||
| Naviant litigation settlement | — | — | — | — | — | |||||||||||||||
| Acquired EBITDA | — | — | — | — | — | |||||||||||||||
| Restructuring costs | 0.0 | 1.5 | (0.0 | ) | 0.0 | 1.5 | ||||||||||||||
| Impairments and write-down of assets | 0.8 | 0.3 | 2.7 | 0.1 | 3.9 | |||||||||||||||
| Litigation settlement charges | — | — | — | 0.0 | 0.0 | |||||||||||||||
15
| (in millions) | Q1 | Q2 | Q3 | Q4 | 2009 | |||||||||||||||
| Non-cash stock compensation expense | 0.4 | 0.4 | 0.4 | 0.4 | 1.6 | |||||||||||||||
Non-GAAP adjusted EBITDA Corporate Activities | $ | (9.9 | ) | $ | (7.5 | ) | $ | (8.6 | ) | $ | (7.4 | ) | $ | (33.4 | ) | |||||
Total GAAP net income (loss) before income taxes | $ | (1.2 | ) | $ | (2.0 | ) | $ | 7.8 | $ | 6.1 | $ | 10.8 | ||||||||
| Interest expense | 3.2 | 2.2 | 2.1 | 1.9 | 9.5 | |||||||||||||||
| Depreciation and amortization of operating assets | 4.8 | 5.0 | 4.7 | 5.8 | 20.2 | |||||||||||||||
| Amortization of intangible assets | 2.9 | 2.8 | 2.3 | 2.3 | 10.4 | |||||||||||||||
Total non-GAAP EBITDA | 9.8 | 8.0 | 16.9 | 16.2 | 50.8 | |||||||||||||||
Adjustments: | ||||||||||||||||||||
| SEC investigation / shareholder litigation / merger related expenses | 3.8 | 1.9 | 2.0 | 0.8 | 8.5 | |||||||||||||||
| Naviant litigation settlement | — | — | — | — | — | |||||||||||||||
| Acquired EBITDA | — | — | — | — | — | |||||||||||||||
| Restructuring costs | 2.6 | 6.5 | 4.0 | 0.9 | 14.1 | |||||||||||||||
| Impairments and write-down of assets | 2.2 | 3.6 | 2.9 | 8.3 | 16.9 | |||||||||||||||
| Litigation settlement charges | 0.3 | 0.1 | 0.0 | 0.0 | 0.4 | |||||||||||||||
| Non-cash stock compensation expense | 0.4 | 0.4 | 0.4 | 0.4 | 1.6 | |||||||||||||||
Total non-GAAP adjusted EBITDA | $ | 19.1 | $ | 20.5 | $ | 26.2 | $ | 26.6 | $ | 92.4 | ||||||||||
% margin | 15.0 | % | 16.8 | % | 21.0 | % | 21.1 | % | 18.5 | % | ||||||||||
Note 1) Data Group for 2007 includes a full year of results for the following acquisitions: expresscopy.com, SECO Financial
Note 2) Services Group for 2007 includes a full year of results for the following acquisitions: Direct Media, Inc.
Note 3) Research Group for 2007 includes a full year of results for the following acquisitions: NWC Research, Guideline, Inc., Northwest Research Group
Change in Working Capital Reconciliation
| December 31, | ||||||||||||||||
| (in millions) | 2006 | 2007 | 2008 | 2009 | ||||||||||||
| Working deficit per 10-K (note 1) | $ | (36.1 | ) | $ | (29.8 | ) | $ | (16.1 | ) | $ | (25.5 | ) | ||||
| Less cash | (4.2 | ) | (9.7 | ) | (4.7 | ) | (5.8 | ) | ||||||||
| Less marketable securities | (2.7 | ) | (2.3 | ) | (1.0 | ) | (1.8 | ) | ||||||||
| Plus current portion of long-term debt | 4.6 | 4.9 | 2.9 | 2.7 | ||||||||||||
| Plus restructuring accrual | 1.3 | 6.1 | 9.3 | 7.2 | ||||||||||||
| Adjusted working deficit | $ | (37.0 | ) | $ | (30.8 | ) | $ | (9.6 | ) | $ | (23.2 | ) | ||||
| Change in working capital | $ | (6.2 | ) | $ | (21.2 | ) | $ | 13.5 | ||||||||
Note 1) All amounts exclude results of Macro International, Inc.
Selling, General and Administrative Expenses Reconciliation
| For the Years Ended December | ||||||||
| 31, | ||||||||
| (in millions) | 2008 | 2009 | ||||||
| GAAP selling, general and administrative expenses per 10-K | $ | 334.5 | $ | 255.2 | ||||
| Less one-time charges | (52.0 | ) | (33.3 | ) | ||||
| Non-GAAP selling, general and administrative expenses excluding one-time charges | $ | 282.5 | $ | 221.9 | ||||
16