Infogroup Q1 Sales Down, Income Up

Infogroup has reported a 3% decline in net sales to $124.2m for the first quarter of 2010, with net sales in its marketing research group almost flat at $24.4m during the period. However, following cost reduction measures, Group net loss of $9.3m in Q1 2009 was turned into net income of $7.3m this quarter.

The firm, which has agreed to be acquired by private equity firm CCMP Capital Partners, reported that sales in its data division fell 5% to $64m during the quarter, compared with the $67.3m recorded for the same period in 2009.

Operating income for the first quarter of 2010 was $12.3m, which included $5.2m of restructuring, non-recurring and non-cash charges; compared to operating income of $2.7m in the first quarter of 2009, which included $8.8m of comparable charges.

Operating loss for the marketing research group was $0.04m, or 0.2% of revenue, compared to $0.2m, or 0.8% of net sales for the same period in 2009.

Group net debt as of March 31, 2010 was $163.3m, compared to $174.1m as of December 31 2009.

During the first quarter of 2010 the company implemented and realized cost savings of approximately $4.0m, which in addition to those implemented in 2009, contributed to lower overall adjusted selling, general and administrative expenses by approximately $8.3m.

Infogroup says that the Q1 2010 cost savings initiatives will have a realized impact of approximately $15.0m for the full year of 2010, with an annualized impact of approximately $16.0m.

Last week, Infogroup proposed a $365m secured credit facility, to part-fund its takeover by CCMP. The sale has been opposed by a number of shareholders, who claim that the deal - which equates to $8 in cash for each share of common stock - 'significantly undervalues' the firm.

Howevever, according to a filing lodged with the Securities and Exchange Commission, CCMP originally offered $8.40 per share, which it then reduced to $7.60 per share, after reviewing Infogroup's financial performance. The price has since been increased and the deal is now valued at $659m.

Company officials declined to comment on the first quarter results, citing the proposed buy-out by CCMP, which requires shareholder and regulatory approval.

Web site: www.infogroup.com .