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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Filed by a party other than the registrant |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Under Section 240.14a-12 |
INFOUSA INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date
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5711 S 86TH CIRCLE PO BOX 27347 Omaha NE 68127-0347
Executive Office: (402) 596-8900 Fax (402) 596-8902
Internet: www.infoUSA.com
FOR IMMEDIATE RELEASE
May 4, 2006
CONTACT:
Laura Smith / Andrew Siegel
Joele Frank, Wilkinson Brimmer Katcher
Phone: (212) 355-4449
infoUSA SENDS LETTER TO SHAREHOLDERS
Urges Shareholders to Vote FOR infoUSA Directors
and AGAINST Shareholder Proposal Number 2
OMAHA, Neb. May 4, 2006 infoUSA (Nasdaq:IUSA) today sent the following letter to all infoUSA
stockholders recommending that they vote FOR infoUSAs incumbent directors and AGAINST shareholder
proposal number 2:
IMPORTANT:
VOTE THE ENCLOSED WHITE PROXY CARD TODAY
May 4, 2006
Dear Fellow infoUSA Shareholder,
With your Companys May 26th Annual Meeting of Stockholders rapidly approaching,
we strongly urge you to support the re-election of infoUSA directors Vinod Gupta, Dr.
George Haddix and Dr. Vasant Raval by signing, dating and returning the WHITE proxy card
TODAY. Your Board also urges you to vote AGAINST shareholder proposal number 2.
infoUSAs BOARD OF DIRECTORS HAS A PROVEN RECORD OF ENHANCING VALUE FOR
ALL infoUSA STOCKHOLDERS THROUGH SUCCESSFUL AND ACCRETIVE
ACQUISITIONS
Acquisitions have been one of the cornerstones of our strategic plan and have contributed
significantly to infoUSAs revenues and profits. Acquisitions are one of the foundations
for the Companys future organic growth. infoUSA has completed 26 acquisitions since 1996
and we are confident that these transactions have enhanced value for our shareholders and
positioned the Company to generate strong returns going forward. Through the successful
execution of this acquisition strategy, infoUSA has grown from solely a database company
with $86 million in revenue in 1995 to an industry leading solutions provider with more than
$383 million in revenue in 2005. Acquisitions have enhanced content, opened new
distribution channels and provided entry into new vertical segments. infoUSA generated 4.3%
organic
revenue growth in the first quarter of 2006 and we believe that infoUSA has the customers,
content and distribution to continue to grow organically and enhance shareholder value.
infoUSA IS WELL-POSITIONED FOR ORGANIC GROWTH
DUE TO SUCCESSFUL ACQUISITIONS
infoUSAs successful track-record of acquiring and integrating companies has created value
for stockholders and has established a platform for future organic growth.
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An important part of this value creation is due to infoUSAs ability to rapidly
integrate the acquired company and aggressively reduce costs. infoUSAs databases are
leveraged across businesses, allowing infoUSA to provide data and related services at a
significantly lower cost. |
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In addition, infoUSA has created Centers of Excellence to provide shared
services across businesses, eliminating unnecessary redundancy. By reducing
administrative costs and leveraging infoUSAs infrastructure to eliminate other
overhead, such as the expense of running several publicly traded companies, infoUSA has
been able to realize considerable cost synergies. |
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infoUSAs successful track-record of acquisitions has also created new and
highly profitable opportunities for the Company. For example, we are reaping the
benefits of the compelling cross-selling opportunities to be realized by offering
infoUSAs full suite of products to customers who currently use only one of infoUSAs
services. |
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By providing bundled, value-added solutions, infoUSA can now serve as a one
stop shop for marketing and sales solutions. This multi-channel approach combines
data, data processing, database marketing and e-mail solutions. This is an important
competitive advantage as it allows infoUSA to realize superior margins as compared to
simply selling lists. infoUSAs ability to provide integrated solutions is a direct
result of the successful acquisition strategy supervised by this Board. |
Due to the Boards foresight and disciplined execution, infoUSA now has the customers,
content and distribution to drive organic growth and create additional value for
stockholders.
WE BELIEVE HISTORY DEMONSTRATES THAT THE EXPERTISE AND INSIGHT OF
THE CURRENT infoUSA BOARD IS CRITICAL TO THE COMPANYS SUCCESS
infoUSA has remained an industry leader by anticipating and adapting to changing market
conditions:
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The Companys Board recognized the potential of the online segment and secured
a leadership position in e-mail marketing. Following industry slowdown in 2001,
infoUSA built an email and online marketing business to continue profitably growing the
Company. Beginning in March of 2002, we have acquired five underperforming e-mail
marketing companies DoubleClick, ClickAction, Yesmail, Markado and @Once. Today, we
have a robust $26 million-plus e-mail business and these acquisitions have more than
paid for themselves. |
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The Board has also been instrumental in infoUSAs entry into new, fast growing
markets. For example, by leveraging infoUSAs existing databases, the Company now has
a presence in new markets such as government and politics, GPS navigation, tax
compliance and Homeland Security. |
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In 2005 the Board once again took decisive action to enhance value for
shareholders by reengineering infoUSAs low-margin local directory sales business.
The Company prudently established a telemarketing center and eliminated a costly field
sales force. Although this decision resulted in a short-term revenue decrease of
approximately $2 million in the first quarter of 2006, it positioned the Company for
improved long-term performance. |
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Similarly, infoUSA has stayed ahead of the curve by changing its pricing
structure. The new structure reduces reseller competition with infoUSAs retail sales
divisions. While this initiative also caused a short-term revenue decrease in the
first quarter of 2006 of approximately $3 million, this strategic repositioning is
expected to enhance infoUSAs revenue and margins over the long-term. |
By being highly flexible, we have been able to take advantage of a changing marketplace as
demonstrated by our move to subscription offerings. For the first quarter of 2006
subscription revenue, which includes SalesGenie.com, SalesLeadsUSA.com and Credit.net, led
to revenue growth in the Companys small business group, despite the anticipated drop in
revenue from the Reseller Group and Polk Directories.
infoUSAs Board of Directors has quickly adjusted to changing industry dynamics,
implementing new ideas and seizing upon market opportunities. The Board has made the right
decisions to enhance the Companys competitive position and facilitate organic growth.
ELECT THE INCUMBENT DIRECTORS TO ENSURE
THAT YOUR BOARD CAN CONTINUE ITS SUCCESSFUL STRATEGY
TO DRIVE ORGANIC GROWTH AND ENHANCE VALUE FOR ALL STOCKHOLDERS
Your Board has overseen the effective implementation of infoUSAs strategic plan and we
believe that your Boards nominees are critical to its continued successful execution. We
believe that the election of the dissident nominees would be disruptive and could impair the
implementation of the Companys strategic plan.
infoUSAs organic growth strategy includes:
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Expanding existing customer relationships by providing complete market
solutions including proprietary data, data processing services and e-mail marketing. |
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Converting customers to infoUSAs subscription products including
SalesGenie.com, SalesLeadsUSA.com and Credit.net. |
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Leveraging new distribution channels. |
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Increasing branding to become the small business brand of choice. The Board
expects that continued investment in advertising and branding will further expand the
customer base and increase future revenue. |
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Providing greater access to customers to facilitate increased use of databases
and data processing services. |
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Providing additional compelling applications, such as SalesGenie, to small
business and SOHO marketplaces. |
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Targeting high growth markets for the license of databases. infoUSA is
actively pursuing opportunities to further expand in political, non-profit, charitable
and governmental markets, where there is a tremendous opportunity to leverage the
Companys existing databases. The |
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Company already has several blue-chip customers in this marketplace. |
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Continuing international expansion by developing the Companys international
sales force and increasing infoUSAs presence in international markets. Among other
international growth opportunities, the Company is developing a small business database
in the UK. |
THE SUCCESS OF THE SUBSCRIPTION MODEL DEMONSTRATES
THAT THE BOARDS STRATEGIC PLAN FOR infoUSA IS WORKING
Successful acquisitions and the Boards continued execution on its strategy gave infoUSA the
right platform to launch strong and sustainable subscription-based businesses. The Companys
continuing success in adding new subscribers builds infoUSAs recurring revenue base and
enhances value for all stockholders. The success of the subscription model is demonstrated
by infoUSAs recent accomplishments:
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The infoUSA Group added 6,000 new subscribers in the first quarter of 2006
an 18% increase in just three months. |
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infoUSAs subscription customer base for services such as SalesGenie.com,
SalesLeadsUSA.com, Credit.net and others now exceeds 35,000. |
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The Company delivered strong organic revenue growth of 4.3% in the first
quarter of 2006. |
The Companys strategic plan is working. Your Board and management have been steadfast in
their commitment to pursuing opportunities that are in the best interests of all our
stockholders. Through their extensive market knowledge and industry experience, infoUSAs
Board and management team have made infoUSA an industry leader with customers and operations
worldwide.
YOUR BOARD AND MANAGEMENT ARE DEDICATED TO SOUND CORPORATE
GOVERNANCE AND HAVE THE EXPERTISE AND EXPERIENCE TO CONTINUE TO BUILD
VALUE FOR ALL STOCKHOLDERS
Despite the dissidents inflammatory rhetoric, infoUSA is committed to sound corporate
governance. infoUSA has continually added highly-qualified members to the Board, and today
8 of infoUSAs 9 directors are independent by NASDAQs Corporate Governance Standards.
All of the members of the Boards committees are independent and most of them have
experience at companies whose businesses are similar or complementary to infoUSAs business.
In addition, all of infoUSAs directors, including the three nominees up for reelection,
have relevant public company board experience. infoUSAs nominees are respected and proven
business leaders with extensive knowledge and experience. They are highly-qualified and
committed to enhancing shareholder value.
In stark contrast, we believe that Dolphins nominees have:
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NO working knowledge of infoUSA, its business or the industry |
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NO business plan or strategy for infoUSA |
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NO relevant industry experience |
We do not believe that Dolphins nominees share our vision for the growth and strategic
direction of the Company. In contrast to your Board and management, Dolphin has not offered
any ideas
for improving operations, growing the Company or creating shareholder value. We believe
that election of the dissidents slate could interrupt the implementation of our strategic
plan.
Furthermore, we believe Dolphin is misleading you when it pretends to have uncovered hidden
related party transactions at infoUSA.
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In fact, all of infoUSAs past related party transactions were fully and
properly disclosed in the Companys regulatory filings. |
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We believe that as a professional investor Dolphin was aware of these properly
documented transactions, both when they made their initial investment last June and as
they increased their investment in infoUSA substantially since last August. |
DONT BE MISLED BY DOLPHIN AND ITS PRINCIPAL, DONALD T. NETTER
The infoUSA management team has the expertise to continue successfully implementing the
Companys strategic plan. We urge you to disregard the dissidents materials and the blue
proxy card. We believe that the best way to preserve and enhance the value of your infoUSA
investment is to support our three highly qualified nominees Vinod Gupta, Dr. George
Haddix and Dr. Vasant Raval, by signing, dating and returning the enclosed WHITE PROXY CARD
today!
WITH YOUR SUPPORT, infoUSAs BOARD AND MANAGEMENT CAN CONTINUE TO
BUILD VALUE FOR ALL SHAREHOLDERS
VOTE infoUSAs WHITE PROXY CARD TODAY
Your Board asks that you support your Board and management team by voting FOR infoUSAs
incumbent directors and AGAINST proposal number 2 on the enclosed WHITE proxy card today.
Your vote is extremely important, no matter how many or how few shares you own. If you have
any questions or need any assistance in voting your shares, please do not hesitate to
contact our proxy solicitor, MacKenzie Partners, the firm assisting us in the solicitation
of proxies, toll free at (800) 322-2885.
PRESERVE AND ENHANCE THE VALUE OF YOUR infoUSA INVESTMENT
VOTE FOR YOUR BOARDS NOMINEES AND AGAINST PROPOSAL NUMBER 2
ON THE WHITE PROXY CARD
Thank you very much for your continued support.
Sincerely,
Vinod Gupta
Chairman & Chief Executive Officer
infoUSA Inc.
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. Nearly 3 million customers use infoUSAs
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. To know more about
Sales Leads, click www.infousa.com . To get a 7-day free trial and 100 free sales leads, click
www.salesgenie.com .
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 companys business and financial results is included in the companys filings with
the Securities and Exchange Commission.
* * * *
The
Company is also filing the following information regarding additional
Company employees that may be participating in the solicitation of proxies on behalf of the
Company:
Information Concerning Persons Who May Solicit Proxies
Under applicable Securities and Exchange Commission (SEC) rules Edward C. Mallin and Monica
Messer, executive officers of the Company, and Anthony J. Kreis, an employee of the Company, may be
deemed to be participants in the solicitation of proxies on behalf of the Company (Additional
Participants). Mr. Mallin is the President of the Companys Donnelly Marketing Division, Ms.
Messer is the Companys Chief Operations Officer, and Mr. Kreis is the Manager of Financial
Analysis/Investor Relations at the Company. The business address for Ms. Mallin and Mr. Kreis is
5711 South 86th Circle, Omaha, Nebraska 68127. The business address for Mr. Mallin is 2 Blue Hill
Plaza, Pearl River, New York 10965.
The number of shares owned by each Additional Participant (other than Mr. Kreis) is set forth
in the Companys Definitive Proxy Statement, filed with the SEC on April 17, 2006 (the Proxy
Statement), in the table entitled Security Ownership. The shares set forth in that table
opposite such Additional Participants name are directly or indirectly beneficially owned by such
Additional Participant, and no Additional Participant owns any shares of record but not
beneficially. Mr. Kreis beneficially owns 196 shares of the Companys common stock. Within the
past two years, none of the Additional Participants have engaged in any purchase or sale of shares
of Company common stock, except that Mr. Mallin purchased a total of 8,000 shares on May 3 and 4,
2005 (option exercises), 6,000 shares on December 16, 2004 (option exercise), and 13,334 shares on
December 1, 2004 (option exercise), and Ms. Messer purchased 24,000 shares on February 6, 2006
(option exercise) and sold 14,241 shares on March 24, 2004, 4,219 shares on March 19, 2004, and
11,360 shares on March 12, 2004.
Except as otherwise described in the Proxy Statement, none of the Additional Participants nor
any of their respective affiliates or associates (together, the Additional Participant
Affiliates) (i) directly or indirectly beneficially owns any securities of the Company, or (ii)
has had any relationship with the Company in any capacity other than as a stockholder, employee,
officer or director. Furthermore, except as otherwise described in the Proxy Statement, no
Additional Participant or Additional Participant Affiliate is or was either a party to any
transaction or series of transactions since the beginning of fiscal 2005 or has knowledge of any
currently proposed transaction or series of transactions (i) to which the Company was or is to be a
party, (ii) in which the amount involved exceeds $60,000, and (iii) in which any Additional
Participant or Additional Participant Affiliate had or will have a direct or indirect material
interest. Except as otherwise described in the Proxy Statement, no Additional Participant or
Additional Participant Affiliate has entered into any agreement or understanding with any person
respecting any (i) future employment by the Company or any of its affiliates, or (ii) any
transaction to which the Company or any of its affiliates will or may be a party. Except as
otherwise described in the Proxy Statement, there have been no contracts, arrangements or
understandings by any Additional Participant or Additional Participant Affiliate within the past
year with any person with respect to any securities of the Company.