infoUSA Reports Record 2002 Operating Income - Up 35%, Revenue Grows 5%.

Business Editors

OMAHA, Neb.--(BUSINESS WIRE)--Jan. 24, 2003

infoUSA(R) (Nasdaq:IUSA) The following table presents the financial results, key financial highlights of the company's operations and selected balance sheet items for the fourth quarter of 2002, and year-to-date:

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                                     4th Qtr 4th Qtr    2001    2002
(amounts in thousands, except per      2001    2002     YTD     YTD
 share amounts)                        ----    ----     ---     ---
Net sales                             75,478  74,580  288,738 302,516
----------------------------------------------------------------------
EBITDA, as adjusted (1)               22,425  19,634   95,456  85,821
Depreciation and amortization of
 operating assets                      4,109   3,701   17,873  14,773
Intangible asset amortization          7,360   3,324   30,254  13,310
Restructuring costs (2)                  267     915    4,899   2,531
Other costs (3)                        1,597      23    2,045     650
Operating income                       9,092  11,671   40,385  54,557
----------------------------------------------------------------------
Net income                               671   4,940    4,964  20,436
EPS - basic & fully diluted            $0.01   $0.10    $0.10   $0.40
EPS - cash basis, fully diluted (4)    $0.16   $0.17    $0.70   $0.75
----------------------------------------------------------------------
Non-cash stock compensation expense       --      17      448      52
Litigation settlement charge           1,104      --    1,104     417
Acquisition costs                        493       6      493     181
Interest expense                       5,997   3,497   25,285  16,059
Total debt                           225,670 190,428  225,670 190,428
Capital expenditures                   4,313   1,199    8,258   5,472
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Number of basic shares outstanding    50,891  51,070   50,651  51,170
Number of diluted shares outstanding  50,903  51,070   50,651  51,193
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Accounts receivable (DSO) - without
 Walter Karl (5)                          54      48       56      47
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(1) EBITDA, as adjusted is defined as operating income adjusted to
    exclude depreciation, amortization, non-cash stock compensation
    expense, restructuring costs, litigation settlement charges and
    acquisition costs.
(2) Severance and other costs related to workforce reductions.
(3) Other costs consist of non-cash compensation, litigation
    settlement charges and acquisition costs.
(4) Net income plus intangible asset amortization and non-cash charges
    recorded on asset impairments and the extinguishment of debt and
    other refinancing charges (per share)
(5) Walter Karl is a list broker. Trade accounts receivable and trade
    accounts payable are reflected at gross on the balance sheet.

RESULTS OF OPERATIONS/2003 OUTLOOK

Vin Gupta, Chairman and CEO, infoUSA, said, "During fiscal year 2002, infoUSA increased revenues over those of 2001, although core business revenue continued to be soft as a result of the weak economy. Fortunately, our acquisitions contributed to top line growth of 5%. Our EBITDA margins held steady at 28% of sales, and remain among the highest in the industry, despite having been negatively impacted by the loss of high margin revenues from Internet licensing customers that have gone out of business." "We continued to strengthen our balance sheet throughout the year, and, due to strong cash flow, aggressively prepaid $10.6 million of senior debt and repurchased $9 million of outstanding bonds during 2002. We also made acquisitions entirely from operating cash flow. During 2003 we expect to continue to make acquisitions and improve EBITDA and EBITDA margins by growing revenue and by implementing new technology that will steadily reduce our cost structure. We also plan to continue to de-leverage by prepaying debt. We anticipate that as the U.S. economy recovers, infoUSA will benefit from increased customer demand and improved revenue growth opportunities."

Highlights of Fourth Quarter:

Net sales for the fourth quarter were $74.6 million compared to $75.5 million for the fourth quarter of 2001. EBITDA, as adjusted, for the fourth quarter was $19.6 million, or 26% of net sales, compared to $22.4 million, or 30% of net sales, for Q4 last year. Fourth quarter earnings per share was $0.10 versus earnings per share of $0.01 for the previous year.

Highlights of Fiscal Year 2002:

Net sales for the fiscal year 2002 were $302.5 million compared to $288.7 million for 2001. EBITDA, as adjusted, for 2002 was $85.8 million versus $95.5 million the previous year. The reduction in 2002 EBITDA is primarily the result of the loss of high-margin Internet licensing customers that have gone out of business. Fiscal year 2002 operating income was up 35% to $54.6 versus $40.4 million. 2002 earnings per share grew 300% to $0.40 from the previous year EPS of $0.10. The improvement in operating income and EPS is primarily due to the 5% increase in revenues, reduced interest expenses from lower debt levels and the company's adoption of FASB 142. FASB 142 replaces the requirement to amortize goodwill and certain other intangible assets with an annual impairment test. The company has completed the initial valuation of the goodwill and other intangible assets required by FASB 142 for impairment testing and concluded that no impairment exists.

OPERATING HIGHLIGHTS

Large Customer Group - Donnelley Marketing and Walter Karl

The Large Customer group reported fourth quarter 2002 revenues of $26.5 million versus $26.5 million for the comparable quarter of the prior year, and full year revenues of $108.3 million versus $108.6 million. Despite softer customer demand due to the macroeconomic downturn, the group has been able to stabilize its revenue base from the addition of new products and services, particularly in the e-mail marketing space. The company recently hired Ray Butkus, the founder and former President of Naviant Marketing Solutions, a leading web precision marketing company, as President of Donnelley Marketing. Mr. Butkus has reorganized the sales force, implementing a team marketing approach that will encourage revenue growth and increased market share. Going forward, the group will continue to focus on profitable revenue growth and new client acquisition.

Small Business Group

The Small Business Group reported 2001 fourth quarter revenues of $38.4 million, versus $38.5 million last year. For fiscal year 2002, this group had revenue of $155.7 million, up 16% from previous year revenue of $133.7 million, primarily due to the contribution of directory revenues from Polk and Hill-Donnelly. In addition, the group also experienced 38% annual growth in its Internet revenues from infoUSA.com, which continued to be highly profitable.

Database Licenses (Internet and Non-Internet)

The Database License group recorded revenues during the fourth quarter of $9.7 million, versus $10.5 million in the fourth quarter of 2001, and $38.6 million for fiscal year 2002 versus $46.5 million the prior year. The decrease is attributable to lower license revenues from Internet companies that have dramatically scaled back operations or gone out of business. During the fourth quarter, the company continued to sign new license agreements with value-added reseller for direct marketing and data processing applications. The company has also captured significant market share in the electronic navigation and location-based services market, where its data is embedded in the overwhelming majority of vehicular navigation and handheld GPS devices.

Conference Call

The company will host its fourth quarter conference call on Monday, January 27th, at 5:00 PM Eastern time. To access the conference call, please dial 719/ 457-2695, passcode # 799164, approximately 10 minutes prior to the start of the call. A replay of the call will be available from 8:00 PM Eastern time, January 27th, through midnight Eastern time, February 3rd. The replay number is 719/457-0820, passcode # 799164. A live webcast of the conference call will be available at the following sites: http://www.etrade.com, http://bloomberg.com and http://www.zacks.com.

About infoUSA

infoUSA (www.infoUSA.com), founded in 1972, is the leading provider of business and consumer information products, database marketing services, data processing services and sales and marketing solutions. Content is the essential ingredient in every marketing program, and infoUSA has the most comprehensive data in the industry, and is the only company to own a proprietary database of 250 million consumers and 14 million businesses under one roof. The infoUSA database powers the directory services of the top Internet traffic-generating sites, including Yahoo! (Nasdaq:YHOO) and America Online (NYSE:AOL). Nearly 3 million customers use infoUSA's products and services to find new customers, grow their sales, and for other direct marketing, telemarketing, customer analysis and credit reference purposes. infoUSA headquarters are located at 5711 S. 86th Circle, Omaha, NE 68127 and can be contacted at (402) 593-4500.

Statements in this announcement other than historical data and information constitute forward looking statements that 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, the successful integration of recent and future acquisitions, fluctuations in operating results, failure to successfully carry out our Internet strategy or to grow our Internet revenue, effects of leverage, changes in technology and increased competition. More information about potential factors that could affect the company's business and financial results is included in the company's filings with the Securities and Exchange Commission.

                    infoUSA INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)


                                    FOR THE
                                 QUARTERS ENDED    FOR THE YEARS ENDED
                              -------------------- -------------------
                               Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
                                 2001      2002      2001      2002
                                 ----      ----      ----      ----
                                   (unaudited)
Net sales                       $75,478   $74,580  $288,738  $302,516
Costs and expenses:
  Database and production
   costs                         20,935    21,519    80,880    84,710
  Selling, general and
   administrative                32,118    33,427   112,402   131,985
  Depreciation and
   amortization of operating
   assets                         4,109     3,701    17,873    14,773
  Amortization of intangible
   assets                         7,360     3,324    30,254    13,310
  Non-cash stock compensation
   expense                           --        17       448        52
  Restructuring costs               267       915     4,899     2,531
  Litigation settlement charge    1,104        --     1,104       417
  Acquisition costs                 493         6       493       181
                              ---------- --------- --------- ---------
                                 66,385    62,909   248,353   247,959
                              ---------- --------- --------- ---------
Operating income                  9,092    11,671    40,385    54,557
Other income (expense):
  Investment income                  90        46       953       179
  Minority interest in
   subsidiary                        --        --       282        --
  Other charges (1)                  --      (173)       --    (2,675)
  Interest expense               (5,997)   (3,497)  (25,285)  (16,059)
                              ---------- --------- --------- ---------
Income from continuing
 operations before income
 taxes and extraordinary item     3,185     8,047    16,335    36,002
Income taxes                      2,514     3,107    11,371    13,797
                              ---------- --------- --------- ---------
Income from continuing
 operations before
 extraordinary item                 671     4,940     4,964    22,205
Extraordinary item, net of
 tax (1)                             --        --        --    (1,769)
                              ---------- --------- --------- ---------
Net income                         $671    $4,940    $4,964   $20,436
                              ========== ========= ========= =========

BASIC & DILUTED EARNINGS PER
 SHARE:
  Income from continuing
   operations                     $0.01     $0.10     $0.10     $0.43
  Extraordinary item, net of
   tax                               --        --        --     (0.03)
                              ---------- --------- --------- ---------
  Net income                      $0.01     $0.10     $0.10     $0.40
                              ========== ========= ========= =========
  Basic weighted average
   shares outstanding            50,891    51,070    50,651    51,170
                              ========== ========= ========= =========
  Diluted weighted average
   shares outstanding            50,903    51,070    50,651    51,193
                              ========== ========= ========= =========

  EBITDA, as adjusted           $22,425   $19,634   $95,456   $85,821
                              ========== ========= ========= =========

1) The Company recorded special charges related to an investment loss
of $1.2 million during the second quarter of 2002. The Company
recorded a $1.2 million charge for termination of an interest rate
swap agreement and a $1.8 million extraordinary item for the
extinguishment of debt, net of tax, related to the refinancing of its
Senior Credit Facility during the first quarter of 2002.