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infoGROUP Announces 17% Q1 Revenue Drop
ORC parent and database giant infoGROUP has reported a 17% drop in first quarter revenue to $127.5m from $153.3m in the prior year period. For the quarter, reported net loss was $9.3m compared with net income of $6.6m in 2008.
Eliminating the effect of foreign exchange, the revenue decline was $20.5m or 13%.
CEO Bill Fairfield explained: 'While the economy has been tough for everyone, the decline in our revenue, which was anticipated, has not been due to customers leaving us, but rather the delay or reduction in their spend.'
Operating income was $2.7m, which included $8.7m of restructuring, non-recurring and non-cash charges, compared with $11.4m in the first quarter of 2008 which included $4.7m in similar charges.
In total, the company recorded $9.3m in costs during the quarter for restructuring, non-recurring and non-cash charges. This included $3.8m in legal and professional fees related to the SEC investigation, $2.6m in restructuring costs for severance associated with headcount reductions and facility closures, $2.2m for impairments and write-down of assets, $0.3m in litigation settlement charges and $0.4m in non-cash stock compensation expense.
During the first quarter of 2009 the company completed the sale of Macro International for $155m, and infoGROUP used the net proceeds to reduce bank debt by $92.7m. The sale of Macro resulted in an after tax loss of $9.8m and a total loss from discontinued operations for the first quarter of 2009 of $8.6m.
'During the first quarter of 2009, the company achieved $2.2m of cost savings,' stated CFO Tom Oberdorf. 'In the second quarter, we anticipate to achieve an additional $2m to $3m of cost savings, so we are well on our way to delivering the $15m to $20m we promised during our last quarter's earnings call.'
Separately, infoGROUP's Board of Directors has approved the adoption of a stockholder rights plan, designed to protect stockholders from abusive takeover tactics and to encourage any potential buyer to negotiate directly with the Board before attempting a takeover. Last December, Vin Gupta - the founder and former CEO and Chairman of infoGROUP - claimed to be exploring a proposal to acquire all the firm's outstanding shares and take the company private.
Web site: www.infogroup.com .
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