InfoGroup Financials Show Cuts In Interesting Places

InfoGroup, formerly infoUSA, may not be confirming that it’s positioning itself for sale, as the Omaha World-Herald recently reported. But the company ain’t denying it either, according to a recently issued company statement. (http://directmag.com/datalist/infogroup-prospect-sale-1103/). And results from its most recent quarterly results fall into the “looks like a duck, walks like a duck and quacks like a duck” category.

For instance, infoGroup’s net sales dropped from just under $145 million in third quarter 2008 to $125 million for the quarter ended Sept. 30 of this year. But the company still managed to turn an $8.6 million net loss from a year ago into $4.8 million in net income.

It didn’t achieve this by holding down the cost of its goods and services. A year ago, during third-quarter, 2008, this was 35.6% of sales. For the quarter just ended, goods and services costs rose, as a percentage of sales, to 36.4%.

What was slashed, and rather dramatically at that, were its selling, general and administrative (SG and A) costs, which fell from 67.1% of sales a year ago to 50.5%. For the uninitiated, SG and A costs include both paperclips and people.

These most recent SG and A costs include $9.3 million in restructuring, non-recurring and non-cash charges, including $4 million severance costs and facility closures.

These severance costs and declines in SG and A expenses will be of interest to the 33-plus suitors the Omaha World-Herald asserts infoGroup is entertaining (management, the World-Herald reported, is meeting this week to evaluate the offers). But there are a few numbers in the financials of interest to those not likely to buy the firm.

For instance, the company’s list brokerage trade accounts receivable dropped 14%, from $86.8 million in third-quarter 2008 to $76.7 million for the quarter just ended. And its list brokerage trade accounts payable fell nearly 21%, from $79.8 million to $63.1 million.