The Daily Magic Formula Stock for 06/03/2008 is infoUSA Inc. According to the Magic Formula Investing Web Site, the ebit yield is 14% and the EBIT ROIC is >100 %.
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info USA Inc. (the â€śCompanyâ€ť or â€śinfo USAâ€ť or â€śweâ€ť) is a leading provider of sales leads, mailing lists, direct marketing, database marketing, e-mail marketing and market research solutions to help our clients grow their sales and increase their profits. We operate three principal business groups.
â€˘ The Data Group maintains 12 proprietary databases of U.S. and international businesses and consumers. Its flagship offerings are Salesgenie.com, a Web-based subscription service that helps sales representatives and business owners find new prospective customers and increase sales; MarketZone, a customer data solution combining lead-generation and database marketing functions with data storage, hygiene, and updating; and OneSource, a Web-based data service with in-depth information about the worldâ€™s largest companies and their executives. We also license our data to major Internet search providers, including Google, Yahoo!, and AOL, and to providers of mapping systems and in-car navigation products.
â€˘ info USAâ€™s Services Group consists of subsidiaries providing customer data management and brokerage services, email marketing services, and catalog marketing services.
â€˘ The Research Group , established in 2006 with our acquisition of Opinion Research Corporation, provides customer surveys, opinion polling, and other market research services for business, through its Opinion Research division, and for government, through its Macro International division.
info USA Data Group
In January 2007, we combined our database operations into a single business unit, the info USA Data Group. This move completes the integration of Donnelley Marketing (acquired in 1999) and OneSource (acquired in 2004) into our database business. The Data Group is responsible for maintaining our 12 proprietary databases and for developing and marketing products and services stemming from those databases.
Our Proprietary Databases
Our proprietary business databases contain information on nearly 15 million businesses in the United States and Canada, compiled through our proprietary compilation and verification processes. The business database contains information such as: name, address, telephone number, SIC codes, number of employees, business owner and key executive names, credit score and sales volume. We also provide fax and toll free numbers, website addresses, headline news, and public filings including liens, judgments, bankruptcies, and UCC filings. The primary segments within our business data file are:
â€˘ 15 Million U.S. and Canadian Businesses
â€˘ 3.6 Million Yellow Page Advertisers
â€˘ 12.5 Million Executives and Professionals
â€˘ 1.5 Million Bankruptcy Filers
â€˘ 5.6 Million Small Business Owners
â€˘ 2.9 Million Global Businesses and 6.1 Million Executives
â€˘ 2.6 Million Business Addresses with Color Photos
â€˘ 600,000 Manufacturers
â€˘ 2.6 Million Brand New Businesses
â€˘ 235,000 Big Businesses
â€˘ 1.8 Million Business Email Addresses
â€˘ 380,000 U.S. Houses of Worship
â€˘ 830,000 Medical Professionals
â€˘ 37 Million UCC Filings
Other databases within our business file include:
â€˘ 900,000 Worldâ€™s Largest Corporations and 12.5 Million Executives by Job Title. Our OneSource global database of large corporations and executives provides in-depth information on individuals and companies, including revenues, assets and corporate linkage.
â€˘ 200,000 New Businesses. Our new businesses Database contains the repository of newly opened businesses. This database is updated from new business listings and new utility connections and is updated with nearly 50,000 new businesses on a weekly basis.
â€˘ Yellow Page Advertising Report. This report identifies spending by small businesses on Yellow Page advertising. Customers can sort this information by many characteristics, including by individual business as well as by SIC code and any geographic region.
Our data can be further categorized in various segments such as Small Business Owners, Executives at Home, Big Businesses and their Corporate Affiliations, Growing Businesses, Places of Interest, Schools and Female Business Owners.
We compile and update business information from over 15,000 sources. Most of these sources fall within the following categories:
â€˘ Yellow Page and White Page Directories
â€˘ Annual Reports
â€˘ Securities and Exchange Commission (â€śSECâ€ť) Filings
â€˘ Public Filings (UCC and other public filings)
â€˘ Over 20 million phone calls to verify and collect additional information
â€˘ Photographs of businesses
â€˘ Newspaper articles
In addition, we use information licensed from the United States Postal Serviceâ€™s National Change of Address (NCOA) system and Delivery Sequence File (DSF) to update and maintain our business database.
Our consumer database contains approximately 200 million individuals and 115 million households and includes hundreds of data elements. Key elements in our database include: name, address, phone number, age, estimate household income, marital status, religion, ethnicity, dwelling type and size, home value, length of residence, and dozens of lifestyle elements. Our databases within our consumer files include:
â€˘ 200 Million Consumers
â€˘ 14 Million New Movers Per Year
â€˘ 3.6 Million New Homeowners Per Year
â€˘ 1.7 Million Bankruptcies
â€˘ 115 Million Households
â€˘ 60 Million Homeowners
â€˘ 130 Million Occupants
â€˘ 50 Million Consumer Email Addresses
Other databases within our consumer files are:
â€˘ New Homeowners Database. We compile approximately over 3.6 million new homeowners annually, as identified by a nationwide search of new utility connects and disconnects.
â€˘ Public Filings Database. Our Public Filings database contains over 20 million households and businesses that have filed for bankruptcy, or have tax liens or judgments recorded against them.
â€˘ Email Database. We offer a database of over 11 million consumer e-mails for e-mail messaging services and 150 million consumer e-mail addresses for data append. In addition we have 1.7 million business email addresses with postal addresses that are available for mail marketing and email append applications. We have matched the email addresses to our demographic and firm-specific information in our proprietary databases for targeted email marketing campaigns.
We compile and update the consumer database by reviewing over 3 billion records annually. Examples of the sources that are used to create the database are:
â€˘ White Page Directories
â€˘ Real Estate Assessments
â€˘ Real Estate Transactions
â€˘ Public Filings
â€˘ Voter Registration
â€˘ Life Style and Hobby Data
Expanding our Databases and Keeping Them Current
We employ over 650 full-time staff in both the United States and India to compile and update the databases from thousands of public sources such as yellow pages, white pages, newspapers, incorporation records, real estate
deed transfers, bankruptcy filings, UCC filings and various other sources. The databases change by roughly 65% per year. We spend over $50 million annually to update these databases and related database management systems.
In the United States, we have staff updating the U.S. business database by making over 20 million phone calls a year to verify the name of the owner or key executive, address, number of employees, fax numbers, e-mail addresses, hours of operation, credit cards accepted, URL address and other information. In addition, we employ staff to add to our database of 2.6 million photographs of businesses located in the top 100 cities in the United States.
In our India office, we employ business editors to provide business descriptions and executive biographies on global companies. In addition our associates update complete company profiles for Asia Pacific companies in our international database.
Products and Services Derived from Our Databases
We create many products and services from our databases to meet the needs of current and potential customers. We offer access to our databases over the Internet through our various websites, such as info USA.com, Salesgenie.com, onesource.com, and others. We create products and services such as prospect lists, mailing labels, 3 Ă— 5 cards, diskettes, printed directories, DVDs, business credit reports, and many other online and offline applications. Our products and data processing services are used by clients for identifying and qualifying prospective customers, initiating direct mail and email campaigns, telemarketing, analyzing and assessing market potential, and surveying competitive markets in order to find new customers and increase sales. Our data also enables extensive data hygiene and enhancement services.
Internet Based Subscription Services for Sales Leads and New Customer Development
Salesgenie.com. Designed for the small business user and sales people, Salesgenie provides unlimited access to our databases, and unlimited sales leads and mailing lists, with a built-in contact management software and mapping ability. Currently subscriptions start at $180 per month per user for Salesgenie, with multi-seat packages based on a tiered-pricing structure. The pricing information of our products set forth in this report reflect current prices and may be subject to future fluctuations and negotiations.
Salesgenie.com/Lite. This service offers 6 databases with limited search criteria for currently $90 per month per user. This service also has contact management software.
SalesgeniePro â€” Marketing Edition. Provides on-demand, online access to info USAâ€™s database of 14 million businesses combined with the hygiene and data enhancement of existing customer files. Designed for marketing departments who support distributed or large sales forces (50 or more sales representatives), SalesgeniePro combines point-and-click selection of targeted prospects from any web-browser with suppression of existing customers to improve the effectiveness of and cost efficiency of direct marketing campaigns. Direct marketers can use SalesgeniePro to analyze existing customers, identify target markets and develop more successful targeted marketing programs.
MarketZone Â® Platinum. An e-CRM (customer relationship management) solution that integrates the entire suite of info USA services to create real-time customer content integration. MarketZone Platinum is an extremely flexible, full function marketing database, campaign management and e-campaign solution which incorporates an engine to support analytic tools for extracting customer insight from todayâ€™s expanding data sets. MarketZone Platinum enables info USA to quickly build and deploy custom analytic solutions to meet the evolving demands of our largest customers with the most sophisticated marketing requirements. MarketZone Platinumâ€™s multiple platform applications, modules, and campaign management/e-campaign management components can be leveraged to deliver high-performance analytic applications rapidly. These capabilities, along with our ability to provide data-processing, data and consultative services under one roof make MarketZone Platinum a very comprehensive & compelling solution.
infoConnect ONE PASS. Provides online, real-time data enhancement and file cleansing services which allow our clients to access key data and model scores to build customer relationships at the point of contact. Composed of four targeted web services â€” BusinessConnect, ScoreConnect, ConsumerConnect, and AddressConnect â€” infoConnect offers immediate response capabilities that can yield impressive direct marketing results.
Our infoConnect services allow our clients to upsell, cross-sell and provide more targeted offers to grow their sales in real-time environments such as call centers and online stores.
OneSource Global Corporate and Executive Database. Provides business and financial information to professionals who need quick access to timely and reliable company, industry, and market intelligence. OneSourceâ€™s primary products, the OneSource Business Browser sm products, are password-protected, subscription-based products that provide sales, marketing, finance, and management professionals and consultants with industry and company profiles, research reports, media accounts, executive listings and biographies, and financial information on over 1,700,000 public and private companies. Our international database spans 241 countries and provides information on approximately 16.6 million companies and 18 million key decision makers at these companies. The companies featured in our international database include not only large public companies but also well-known private companies.
Credit.net â€” Business Credit Reports. Our business credit directories include a printed directory bundled with a DVD and Internet access to business credit reports on Credit.net. The product is used by customers for making credit decisions, verifying company information, assisting in collection support, and identifying potential new customers. Customers can purchase individual business credit reports for a current price of $9.95 from the Internet or they may select a subscription based plan offering unlimited access to our business credit reports for a current flat fee of $75 per month per user.
Polk City Directories and infoUSA City Directories (formerly Hill-Donnelly Directories). Two of our directory divisions, Polk City Directories (CityDirectory.com) and Hill-Donnelly Directories (hilldonn.com), now offer bundled subscription packages for under $100 per month per user. These bundled packages include a printed directory on a customerâ€™s immediate region, a DVD on the entire state, and Internet access for all of U.S.
Directories and DVD Products â€” Printed Directories, DVD and Internet access. We offer a variety of titles: US Business Directory, State Business Directories, Big Business Directory, Manufacturers Directory, 575,000 Physicians and Surgeons, Households USA, and Entrepreneurs Directory. Our customers use these directories for lead generation, telemarketing and reference purposes.
Non-Subscription Products and Services â€” Customized Sales Leads and Databases
Printed Prospect Lists, Mailing Labels, and Sales Lead Cards. Our databases can be â€śsliced and dicedâ€ť to create customized sales leads and mailing lists for our customers. Our small business consultants work with a business to select the right criteria such as geography, type of business and size of business to generate the most revenue. The custom list can then be delivered in electronic format, printed format, put on mailing labels, provided on 3 Ă— 5 index cards, or customers may place the order themselves using the info USA.com website.
We license our data to a variety of value added resellers and original equipment manufacturers in several key vertical industries, including directory assistance, GIS/mapping, navigation, local search, Internet directories, site location analysis, sales leads, marketing, demographic modeling and fraud prevention.
Sales Divisions within the Data Group
We organize the sales divisions of the Data Group based on customer and product focus. The principal divisions are the Small Business Group , the National Accounts Group (formerly Donnelley Marketing), the Licensing Group, OneSource, and the Library and Government Division.
Small Business Group. Approximately 90% of all businesses are small companies with less than 50 employees. We dedicated this division to meet the unique sales and marketing needs of small- and medium-sized businesses, including small office and home office businesses, sales executives, and aspiring entrepreneurs. This market holds about 20 million potential prospects for info USA.
National Accounts. info USA National Accounts serves large marketing departments in all industries, including financial institutions, insurance carriers, retailers, telecommunications providers, utilities, gaming and hospitality companies, non-profit organizations, and technology and business services providers.
Licensing. The licensing sales division serves the value-added reseller market, including major Internet search providers such as Google, Yahoo!, and AOL, and providers of mapping systems and in-car navigation products.
OneSource â€” Global Business Database. OneSource products and services are designed to address the information needs of leading professional and financial services firms, technology companies, and other large organizations. OneSource customers use the OneSource products for such purposes as account prospecting and management (i.e., business development), competitive and peer analysis, company tracking and monitoring, and company and industry research. OneSourceâ€™s primary target market consists of Global 5000 business-to-business companies in the technology, professional services, and financial services industries and that employ large direct sales forces.
Library and Government Division. The Library and Government Division serves the needs of public agencies, academics and libraries worldwide. We offer a wide range of database products, available in print, CD-ROM or via the Internet. These products include State Business-to-Business Marketing Directories, The American Big Businesses Directory and CD-ROM, The American Manufacturers Directory and CD-ROM, The American Business Disc, Powerfinder and ReferenceUSA. ReferenceUSA is an Internet-based reference service site which is used as a reference tool in libraries and is continually enhanced based upon suggestions from librarians and library patrons.
info USA Services Group
The info USA Services Group consists of subsidiaries whose primary focus is on helping customers enhance the value of their own customer data or providing full-service marketing solutions. The Services Group consists of the following divisions: List Brokerage and List Management, Catalog Vision, Triplex and Yesmail.
List Brokerage and List Management
This division includes subsidiaries Walter Karl, Edith Roman, Millard Group, Mokrynskidirect and the recently acquired Rubin Response, whose combined operations make it one of the largest list brokerage/list management providers in the industry. We provide list brokerage and list management services and an array of database services to a broad range of direct marketing clients. Walter Karl also specializes in email list management and brokerage services for on-line marketers. Our specialized list brokerage services help our customers recognize revenue from their own customer data, selling specialty lists to a wide range of businesses in many industries.
Catalog Vision is a leading provider of data processing services to the catalog direct marketing industry, with a heritage of over 40 years. Our clients are integrated multi-channel direct marketers who utilize our suite of merge/purge, address hygiene, database management, and data products to reduce promotion expenses and improve response performance. Catalog Vision provides integrated solutions that help our clients gain insight into their customer base and turn that insight into actionable, measurable means of targeting the best audience and increasing profitability.
Triplex â€” Non-Profit Group
info USAâ€™s Triplex division provides data processing services for high-profile political and non-profit organizations. Using info USAâ€™s vast data assets, Triplex is building on its core services by introducing enhanced address hygiene, demographic data and internet contact appends for its clients.
Yesmail specializes in providing email solutions for a wide range of industries including retail, travel, entertainment, financial, healthcare and consumer packaged goods. The Yesmail product suite, a combination of technology and service solutions, enables marketers to develop highly personalized customer communications programs that drive return on investment through increased sales and/or cost reductions. Email marketing has become a critical component of modern marketing and is utilized on a stand-alone basis or as part of an integrated marketing effort.
The Yesmail online marketing suite includes a comprehensive mix of technology and service components including:
â€˘ Yesmail Enterprise â€” A database and email campaign management application for large enterprises with complex data, personalization and integration needs
â€˘ Yesmail Express â€” A robust, self-serve email campaign management tool for mid-market companies
â€˘ Yesmail Database â€” Integrated marketing database management utilizing info USAâ€™s MarketZone suite of products
â€˘ Yesmail Media â€” Database enhancement and list growth utilizing info USA data, co-registration, search, list rental and append products
â€˘ Yesmail Consulting â€” Strategic marketing consulting, email creative, data analysis, privacy and deliverability, and best practices consulting
In addition, Yesmail owns patented predictive modeling tools that are embedded into certain of its email campaign management tools and utilized by the Yesmail professional services team. Yesmail also plans on introducing a small-business email campaign management tool in 2007.
Marketing Research Group
On December 4, 2006, we completed our acquisition of Opinion Research Corporation, a diversified market research company with two principal divisions. These divisions consist of Opinion Research and Macro International.
Opinion Research Corporation (ORC) was established in 1938 as a global market research and consulting firm by Claude Robinson, the original partner of George Gallup. A decision to focus on business-related research using the principles of public opinion polling was the catalyst for the companyâ€™s founding.
Employing a worldwide data collection network, Opinion Research performs surveys for its client companies and organizations, using the results to guide leadership teams in making informed business decisions based on in-depth insights into customer attitudes about an organizationâ€™s product and service offerings. Opinion Research advises senior level executives in both public and private sectors on a number of issues in the areas of corporate reputation and branding, customer strategies, market development, employee research and consumer knowledge across a number of industry sectors, including financial services, information technology, telecommunications, life sciences and consumer products and services.
Research products include ORC CARAVAN Â® , which we believe is the oldest continuously running consumer omnibus survey in the U.S.; ORC Overnight, which delivers rapid answers to business questions within 24 hours; and ORC Portal, a secure online project management tool enabling clients to track the progress of complex projects in real time. ORC Internationalâ€™s UK office recently introduced ORC Accesspoint tm , a project portal enabling clients to store and manage all of their research material in one central repository while providing project managers and stakeholders with a tool to monitor survey progress.
In addition to providing business insights to its global client base, Opinion Research has partnered with CNN on the CNN/Opinion Research Poll.
Opinion Researchâ€™s geographic reach has encompassed 106 countries across six continents. It operates as Opinion Research in the U.S., (headquartered in Princeton, New Jersey) and as ORC International in Europe (headquartered in London, UK) and Asia (headquartered in Hong Kong).
Macro International Inc. is a leading federal government contractor, offering a range of services that address federal agency program needs from design to implementation and evaluation. Macro has been providing applied research, program evaluation, technical assistance, information technology and social marketing services to U.S. government agencies for more than 40 years. Macroâ€™s core competencies span issues in health, education, international development, housing, energy and the environment.
Macroâ€™s survey experts and demographers provide governments, policy makers and health care providers with the most up-to-date, scientifically reliable data on a wide variety of health issues. Macro has a global reputation for providing the most accurate measurements of the incidence and prevalence of deadly diseases such as HIV/AIDS, implementing complex, large-scale population surveys which often include the collection and analysis of thousands of blood samples. Over the past 20 years, the firm has completed more than 200 demographic and health surveys in 75 developing countries. Macro is currently providing technical assistance to the national health care organizations of more than 30 countries, helping them create and sustain programs to promote the health and safety of their citizens.
Macro also designs and implements complex, large-scale, web-based data collection and data dissemination projects. Macro was one of the first companies to utilize the Internet for collecting data from individuals and institutions to support a variety of federal programs.
Macro is a leading provider of public education and social marketing services to the federal government. Macroâ€™s experts make use of impressive internal technical capabilities, including large-scale printing and publishing facilities, website design, development and hosting, and state-of-the-art video production facilities, to create health promotion campaigns. For example, Macro is currently working on a full-scale smoking cessation campaign for the armed forces.
Macro also conducts complex, large-scale telephone, web-based and in-person surveys. Macro conducts several very large telephone surveys for the government, conducting several hundred thousand interviews annually. Macro also maintains a large national field force to conduct in-person interviews, and specializes in collecting health risk behavioral data from school-aged children, teens and young adults in the school setting.
* * *
Sales & Marketing Strategy
info USA employs several media options to grow and increase our market share including direct mail, print, outbound telemarketing, online keyword search engines, banner advertising, television, radio and e-mail marketing. Publications such as DM News, Target, Fortune, Forbes, Inc., Entrepreneur and Sales and Marketing Management are a regular part of our marketing strategy, as well as local market newspapers and USA Today. In 2006, we continued these traditional forms of advertising as well as national and local radio and television campaigns to further build our brand name and drive revenue for our flagship online subscription product, Salesgenie.com. With the launch of Salesgenie.ca in 2006, Canadian radio and television advertising was added to our print and direct mail advertising. info USA continued to advertise aggressively to promote its valuable brand, including television advertisements aired during the Super Bowl in February 2007.
To monitor the success of our various marketing efforts, we have incorporated data gathering and tracking systems. These systems enable us to determine the type of advertising that best appeals to our target market so that we can invest future dollars in these programs and obtain a greater yield from our marketing. Additionally, through the use of our database tools, we are working to more efficiently determine the needs of our various client segments and tailor our services to their individual needs. With this system, we plan to strengthen relationships and support marketing campaigns to attract new clients.
Vinod Gupta is the founder of the Company and has been Chairman of the Board of the Company since its incorporation in 1972. Mr. Gupta served as Chief Executive Officer of the Company from the time of its incorporation in 1972 until September 1997 and since August 1998. Mr. Gupta holds a B.S. in Engineering from the Indian Institute of Technology, Kharagpur, India, and an M.S. in Engineering and an M.B.A. from the University of Nebraska. Mr. Gupta also was awarded an Honorary Doctorate from the Monterey Institute of International Studies, an Honorary Doctorate from the University of Nebraska, and an Honorary Doctorate from the Indian Institute of Technolgoy. He was appointed by President Clinton to serve as a Trustee on the Kennedy Center for Performing Arts in Washington, D.C. He was nominated and confirmed to be the United States Consul General to Bermuda. Then, President Clinton nominated him to be the United States Ambassador to Fiji. Due to business commitments, he withdrew his name from consideration.
Stormy L. Dean has served as Chief Financial Officer since February 2006. He served as the Principal Accounting Officer of the Company since December 2005. Mr. Dean has been employed by the Company since 1995, except during the period from October 2003 to August 2004. He served as Chief Financial Officer of the Company from January 2000 through October 2003, as the Corporate Controller from September 1998 until January 2000 and as the acting Chief Financial Officer from January 1999 to August 1999. From August 1995 to September 1998, Mr. Dean served as the Companyâ€™s tax director. Mr. Dean holds a B.S. in Accounting from the University of Nebraska at Omaha, an M.B.A from the University of Nebraska at Omaha, and a Certified Public Accountant certificate.
Fred Vakili has served as Executive Vice President of Administration and Chief Administrative Officer since August 1998. Mr. Vakili served as Senior Vice President of Special Projects from October 1997 to August 1998, as Senior Vice President of Value Added-Resellers Group and Canada Operations from May 1987 to October 1997, and as Senior Vice President of various Company divisions from 1985 to 1987. Mr. Vakili joined the Company in 1985 as the Product Manager for the Directory Group. Mr. Vakili holds a B.S. in Industrial Engineering and Management from Iowa State University.
Monica Messer has served as President of the Data Group since January 2007 and as Chief Operations Officer since January 2003. Prior to that Ms. Messer served as President of the Database Compilation and Technology Group and Chief Information Officer of the Company from February 1997 to January 2003, and served as a Senior Vice President of the Company from January 1996 to January 1997. Ms. Messer joined the Company in 1983 and has served as a Vice President of the Company since 1985. Ms. Messer holds a B.S. in Business Administration from Bellevue University and is an alum of the Stanford Business School Executive Education program in Strategy and Organization.
Edward C. Mallin has served as President of the Services Group since January 2007. Prior to that Mr. Mallin served as President of Donnelley Marketing since August 2005, as President of Walter Karl since June 1998, as Executive Vice President of the National Accounts Division from January 1997 to June 1998 and as President of Compilers Plus from January 1990 to May 1998. Prior to that, Mr. Mallin was Executive Vice President of Compilers Plus which the Company acquired in January 1990. Mr. Mallin holds a B.A. in Economics and a Masters in Business Administration and Planning from New York University.
Gerard Miodus was appointed President of Opinion Research in December 2006. He has been with the company since 1982 serving in a wide variety of management positions. In 2006 he served as Managing Director, Executive Vice President for the US Region. Prior to that, Mr. Miodus held the positions of Managing Director of Research Services and Managing Director of Information Services. Mr. Miodus holds a Bachelor of Science degree in Economics from Michigan State University.
Dr. Greg Mahnke has served as President of Macro International since November 2005. Dr. Mahnke has been with Macro International since 1988. Dr. Mahnke has a B.A. in Cultural Anthropology from the University of Montana, completed an M.A. in Cultural Anthropology at McGill University in 1981 and received his doctoral degree in Cultural Anthropology from Indiana University in 1987. Prior to assuming the role of President, Dr. Mahnke served as Executive Vice President and Managing Director of Macroâ€™s Survey Research Division. Dr. Mahnke is a well known survey methodologist and serves as Principal Investigator on a number of Macroâ€™s key survey projects.
John H. Longwell has served as General Counsel and Secretary since November 2006. From July 2005 to July 2006, Mr. Longwell was a law clerk to the Honorable Stephen G. Breyer of the United States Supreme Court. He was also an associate with the law firm of Paul Weiss Rifkind Wharton & Garrison LLP in New York from October 2003 to April 2005, and Kellogg Huber Hansen Todd Evans & Figel PLLC in Washington from October 2000 to June 2002, where he practiced complex commercial litigation and regulatory law. He also clerked for the Honorable Douglas H. Ginsburg of the United States Court of Appeals for the District of Columbia Circuit from September 2002 to September 2003 and for the Honorable Vaughn R. Walker of the United States District Court for the Northern District of California from September 1999 to September 2000. He is a graduate of the University of Virginia and the University of Georgia School of Law.
MANAGEMENT DISCUSSION FROM LATEST 10K
In 2007, we are reorganizing our segments both for operational and reporting purposes. In 2007, we will report results in three segments: the Data Group, the Services Group, and the Research Group. We believe that by organizing all of our businesses that sell proprietary content into a single segment, we can more effectively deploy sales and marketing resources. The reorganization is also expected to create better opportunities for cross selling proprietary databases under one brand name. The financial information contained in this report is according to the segment organization in place during fiscal year 2006 which was the info USA Group, the Donnelley Group, and as of December 2006, the Research Group.
Initiatives in 2006 included:
â€˘ Migrated â€śone-time useâ€ť customers to â€śsubscription-basedâ€ť customers of our Internet based services Salesgenie.com, Salesgenie.com/Lite, SalesLeadsUSA.info, Credit.net, PolkCityDirectories.com and info USACiti.com.
â€˘ Continued improvements of the content and accuracy of our database. Adding more content, such as detailed business descriptions, more executives, hours of operation, credit cards accepted, UCC filings, URL address and other information.
â€˘ Expanded international business and executive databases.
â€˘ Increased investments in merchandising, advertising and branding. The advertising campaigns include email, print, TV, radio, direct mail, and search word advertising, as well as the use of white glove client services. Most notable advertisements included three commercials aired during the Super Bowl, on February 4, 2007, featuring Salesgenie.com.
â€˘ Streamlined pricing of the subscription products. Salesgenie.com allows clients full access to twelve databases including mapping, driving directions, CRM, as well as unlimited view, unlimited cherry picking , and downloading for a fixed price per month.
â€˘ Added a scaled-down version to our subscription offerings called Salesgenie.com/Lite which allows clients access to six databases, unlimited view for a fixed price per month.
â€˘ Continued to build on our subscription model by adding enhancements to allow customers a â€śone-stop-shopâ€ť application for all of their direct marketing, sales prospecting needs and credit needs.
â€˘ Developed website application commercials, called â€śCustomer Analyzerâ€ť, which will allow businesses to broadcast their own commercial on our website applications.
Operating income for 2006 was $64.6 million, or 15% of net sales, up from $58.3 million, or 15% of net sales, for 2005. The primary reasons for the increase in operating income were (1) our diligent approach to being more efficient in our operations, and (2) the successful integration of @Once and Millard Group, which were acquired in 2005 and reported a full twelve months of operations in 2006. The continued successful integration of Mokrynskidirect, Digital Connexxions, Rubin Response and Opinion Research Corporation, which were acquired in 2006, into our structure also contributed to the increase in operating income. These increases were offset by $2.3 million expensed during 2006 relating to the proxy contest and other stockholder matters.
Mergers and Acquisitions
Internal revenue growth is our primary objective. However, we still pursue opportunities for strategic acquisitions. As described in the notes to the accompanying consolidated financial statements, we acquired the following entities in 2005: (1) @Once, a provider of email marketing services, and (2) Millard Group, a provider of list brokerage and list management services. During 2006, we acquired the following entities: (1) Mokrynskidirect, a provider of list brokerage and list management services, (2) Digital Connexxions, a provider of email marketing services, (3) Rubin Response, a provider of list brokerage and list management services, and (4) Opinion Research Corporation, a provider of social and market research services.
We have systematically integrated the operations of the acquired companies into existing operations. Due to recent and potential future acquisitions, future results of operations may not be directly comparable to historical data.
Summary of Acquisitions
Through acquisitions, we have increased our presence in the consumer marketing information industry, greatly increased our ability to provide data processing and e-mail marketing solutions, increased our presence in list management and list brokerage services and broadened our offerings of business and consumer marketing information. In addition, with the most recent acquisition of Opinion Research Corporation we have added a research division to complement our existing services.
We frequently evaluate the strategic opportunities available and intend to pursue strategic acquisitions of complementary products, technologies or businesses that we believe fit our business strategy. In connection with future acquisitions, we expect that we will be required to incur additional acquisition-related charges to operations.
Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2 to the audited Consolidated Financial Statements. Of those policies, we have identified the following to be the most critical because they are the most important to our portrayal of our results of operations and financial condition and they require subjective or complex management judgments:
â€˘ Revenue recognition and related estimates of valuation allowances for doubtful accounts, sales returns and other allowances;
â€˘ Database acquisition, development and maintenance expenses;
â€˘ Valuation of long-lived and intangible assets and goodwill; and
â€˘ Income taxes.
Revenue recognition. Revenue from the sale of prospect lists (paper form or electronic), mailing labels, published directories, other sales lead products and DVD and CD information products are recognized upon shipment. These product sales are typically evidenced by a written purchase order or by credit card authorization.
List management revenue is recognized net of costs upon shipment of list to third party. List brokerage revenue is recognized net of costs upon verification from third party of the actual list used and shipped.
Data processing and e-mail customer retention solution revenues are billed on a time and materials basis, with the recognition of revenue occurring as the services are rendered to the customer.
Revenue from the licensing of our data to third parties and the sale of our subscription-based products are recognized on a straight-line basis over the life of the agreement, when we commit to provide the customer either continuous data access (i.e., â€ś24/7â€ť access via the Internet) or updates of data files over a period of time. Licenses and subscriptions are evidenced by written contracts. We also license data to customers with no such commitments. In those cases, we recognize revenue when the data is shipped to the customer, provided all revenue recognition criteria have been met.
Services performed in the Research Group vary from contract to contract and are not uniformly performed over the term of the arrangement. Revenues under fixed-price contracts are recognized on a proportional performance basis. Performance is based on the ratio of costs incurred to total estimated costs where the costs incurred represent a reasonable surrogate for output measures of contract performance, including survey design, data collection, survey analysis and presentation of deliverables to the client. Progress on a contract is matched against project costs and costs to complete on a periodic basis. Provision for estimated contract losses, if any, is made in the period such losses are determined. Customers are obligated to pay as services are performed, and in the event that a client cancels the contract, the client is responsible for payment for services performed through the date of cancellation.
Revenues under cost-reimbursement contracts are recognized as costs are incurred. Applicable estimated profits are included in earnings in the proportion that incurred costs bear to total estimated costs. Incentives, award fees or penalties related to performance are also considered in estimating revenues and profit rates based on actual and anticipated awards.
Revenues under time-and-materials contracts are recognized as costs are incurred. Invoices to clients are generated in accordance with the terms of the applicable contract, which may not be directly related to the performance of services. Unbilled receivables are invoiced based upon the achievement of specific events as defined by each contract including deliverables, timetables and incurrence of certain costs. Unbilled receivables are classified as a current asset. Reimbursements of out of pocket expenses are included in revenues with corresponding costs incurred by us included in cost of revenues.
We assess collectibility of revenues and our allowance for doubtful accounts based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. We do not request collateral from our customers. An allowance for doubtful accounts is established to record our trade accounts receivable at estimated net realizable value. If we determine that collection of revenues are not reasonably assured at or prior to the delivery of our products, we recognize revenue upon the receipt of cash. Cash-basis revenue recognition periodically occurs in those cases where we sell or license our information products to a poorly capitalized company, such as an Internet startup company. However, sales recognized on this basis are not a significant portion of our total revenues.
Database Costs. Our database and production costs are generally charged to expense as incurred and relate principally to maintaining, verifying and updating our databases, fulfilling customer orders and the production of DVD/CD titles. Costs to develop new databases are capitalized by us and amortized upon the successful completion of the databases, over a period ranging from one to five years. Our cost of maintaining consumer and business databases does not necessarily vary directly with revenues since a significant portion of the cost is the maintenance and verification of our existing data. Consequently, operating income may vary significantly with changes in revenue from period-to-period, as our ability to adjust certain elements of our cost structure is limited in the short-run.
Because we expense the costs of maintaining and verifying our existing database, our balance sheet does not include an asset for the value of our database. We believe that our databases of consumer and business information are valuable intellectual property assets. Our success in marketing our products and services depends, in large part, on our ability to maintain an accurate and reliable database of business and consumer information.
Valuation of long-lived and intangible assets and goodwill. We assess the impairment of identifiable intangibles, long-lived assets and related goodwill and enterprise level goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we considered important which could trigger an impairment review included the following:
â€˘ Significant underperformance relative to historical or projected future operating results,
â€˘ Significant changes in the manner or use of the acquired assets or the strategy for our overall business,
â€˘ Significant negative industry or economic trends,
â€˘ Significant decline in our stock price, and
â€˘ Our market capitalization relative to net book value.
When we determine that the carrying value of intangibles, long-lived assets and related goodwill and enterprise level goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure impairment based on estimated fair value of the assets. Net property and equipment, net intangible assets, long-lived assets, and goodwill amounted to $551.0 million as of December 31, 2006.
We completed an impairment test as of October 31, 2006 and 2005, respectively, and determined that no impairment existed. The goodwill impairment test is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered to not be impaired, and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss. The second step is essentially a purchase price allocation exercise, which allocates the newly determined fair value of the reporting unit to the assets. For purposes of the allocation, the fair values of all assets, including both recognized and unrecognized intangible assets, are determined. The residual goodwill value is then compared to the carrying value of goodwill to determine the impairment charge.
At December 31, 2006, we had six reporting units that had goodwill and therefore required testing pursuant to SFAS No. 142. The six reporting units represent a subset of the operating segments reported upon in the accompanying financial statements. These reporting units represent financial information one level lower than the reported operating segments, and these individual reporting units have discrete financial information available and have different economic characteristics.
We used the Gordon growth model to calculate residual values. The Gordon growth model refers to the concept of taking the residual year cash flow and determining the value of a growing, perpetual annuity. The long-term growth rate used for each reporting unit was 3.5%. We used weighted average cost of capital ranging from 10.1% to 11.7% in its discounted cash flow analysis.
Income Taxes. Accounting for income taxes requires significant judgments in the development of estimates used in income tax calculations. Such judgments include, but would not be limited to, the likelihood we would realize the benefits of net operating loss carryforwards, the adequacy of valuation allowances, and the rates used to measure transactions with foreign subsidiaries. As part of the process of preparing the our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. The judgments and estimates used are subject to challenge by domestic and foreign taxing authorities. It is possible that either domestic or foreign taxing authorities could challenge those judgments and estimates and draw conclusions that would cause us to incur tax liabilities in excess of those currently recorded. Changes in the geographical mix or estimated amount of annual pretax income could impact our overall effective tax rate.
To the extent recovery of deferred tax assets is not likely based on estimation of future taxable income in each jurisdiction, we record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. Although we have considered future taxable income along with prudent and feasible tax planning strategies in assessing the need for the valuation allowance, should we determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to deferred tax assets would be charged to income in the period any such determination was made. Likewise, in the event we were able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to deferred tax assets would increase income in the period any such determination was made.
Results of Operations
The following table sets forth, for the periods indicated, certain items from the our statement of operations data expressed as a percentage of net sales. The amounts and related percentages may not be fully comparable due to our acquisition of Triplex in February 2004, Edith Roman in June 2004, OneSource in June 2004, @Once in January 2005, Millard Group in November 2005, Mokrynskidirect in June 2006, Digital Connexxions in October 2006, Rubin Response in November 2006 and Opinion Research Corporation in December 2006.
2006 Compared to 2005
Net sales for 2006 were $434.9 million, an increase of 13% from $383.2 million for 2005.
Net sales of the info USA Group segment for 2006 were $151.9 million, a 6% increase from $142.8 million for 2005. The increase in net sales is principally due to the growth of the segmentâ€™s subscription revenues which includes Salesgenie.com, Salesgenie.com/Lite, SalesLeadsUSA.info and Credit.net. The info USA Group segment principally engages in the selling of sales lead generation and consumer DVD products to small to medium sized companies, small office and home office businesses and individual consumers. Customers purchase our information as custom lists or on a subscription basis primarily from the Internet. Sales of subscription-based products require us to recognize revenues over the subscription period instead of at the time of sale.
Net sales of the Donnelley Group segment for 2006 were $268.4 million, a 12% increase from $240.4 million for 2005. The majority of the increase in the Donnelley Group is related to the acquisition of Millard Group in November 2005, Mokrynskidirect in June 2006, Digital Connexxions in October 2006 and Rubin Response in November 2006, as well as growth in the Yesmail division as e-mail marketing is becoming a bigger part of corporate advertising. The Donnelley Group segment provides our proprietary databases, database marketing solutions, e-mail marketing solutions, list brokerage and list management services and online interactive marketing services to large companies in the United States, Canada and globally. This segment includes the licensing of databases to value added resellers.
Net sales of the newly acquired Research Group segment for 2006 were $14.6 million, which reflects the sales of Opinion Research Corporation since the acquisition date of December 4, 2006. The Research Group segment provides diversified market research which consists of Opinion Research and Macro International.
Cost of goods and services
Cost of goods and services for 2006 were $116.5 million, or 27% of net sales, compared to $108.1 million, or 29% of net sales for 2005. The majority of the increase in cost of goods and services in 2006 related to the acquisition of Opinion Research Corporation in December 2006. Opinion Research recorded $10.7 million in database and production costs for December 2006. This increase was offset by the decrease in costs due to our November 2005 payment of $1.5 million to terminate a contract with our mainframe processor to bring the processing in-house.
The reduction of the cost as a percentage of revenue is due primarily to database compilation costs remaining relatively constant despite the increase in our data sales. List brokerage and list management revenue increased from the Millard Group, Mokrynskidirect and Rubin Response acquisitions which have very low production costs due to sales being recorded on a net basis.
Selling, general and administrative expenses
Selling, general and administrative expenses for 2006 were $224.9 million, or 52% of net sales, compared to $185.9 million, or 48% of net sales for 2005. The increase in selling, general and administrative expenses principally relates to the increase in advertising and marketing costs for the subscription products, as well as costs incurred for the proxy contest in connection with our 2006 annual meeting of stockholders. In addition, increased expenses resulted from the businesses acquired in 2005 and 2006, some of which had selling, general and administrative expenses that were higher as a percentage of revenue than those of the Company as a whole.
Effective in 2006, selling, general and administrative expenses include items previously reported as separate income statement line items. These items were consolidated since we determined these items no longer had a material impact on our consolidated statements of operations. These include non-cash stock compensation expenses, restructuring costs, litigation settlement charges and acquisition costs. Prior year results have been reclassified to reflect this change.
We adopted SFAS No. 123(R) in January 2006, which requires measurement of compensation cost for all share-based payment awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The adoption of SFAS No. 123(R) resulted in a charge of $1.2 million for 2006, compared to a benefit of $0.3 million for 2005. The benefit in 2005 was related to non-employee consulting agreements executed in previous years. See Note 10 of the Notes to Consolidated Financial Statements for further detail regarding the adoption of this new accounting standard.
Depreciation and amortization of operating assets
Depreciation expense for 2006 was $14.0 million, or 3% of net sales, compared to $12.8 million, or 3% of net sales for 2005. The majority of the increase in depreciation expense is the result of one month of depreciation expense for Opinion Research Corporation acquired in December 2006.
Amortization of intangible assets
Amortization expense for 2006 was $14.9 million, or 3% of net sales, compared to $18.1 million, or 5% of net sales for 2005. The decrease in amortization expense is due to a certain identifiable intangible asset from the Donnelley Marketing acquisition becoming fully amortized in June 2006.
Including the factors previously described, we had operating income of $64.6 million, or 15% of net sales during 2006, compared to operating income of $58.3 million, or 15% of net sales for 2005. The increase in operating income is a result of the following items: 1) organic growth of approximately 4% for the Company as a whole, 2) solid expense management, and 3) the successful integration of acquisitions made in 2005 and 2006 into our structure which allowed us to eliminate redundant costs.
Operating income for the info USA Group segment for 2006 was $50.4 million, or 33% of net sales for the info USA Group, as compared to $47.4 million, or 33% of net sales for the info USA Group for 2005. The increase in operating income for the info USA Group is principally due to the growth of the segmentâ€™s subscription divisions.
Operating income for the Donnelley Group segment for 2006 was $109.3 million, or 41% of net sales for the Donnelley Group, as compared to $101.9 million, or 42% of net sales for the Donnelley Group for 2005. The increase in operating income is principally due to the strong performances of the email technology companies and the list brokerage and list management businesses including the performance of the acquisitions made in 2006 including Mokrynskidirect, Digital Connexxions and Rubin Response.
Operating income for the Research Group segment for 2006 was $1.2 million, or 8% of net sales for the Research Group. This includes activity since the date of acquisition of December 4, 2006.
Other (expense), net
Other expense, net was $(11.3) million, or 2% of net sales, and $(9.1) million, or 2% of net sales, for 2006 and 2005, respectively. Other expense, net is comprised of interest expense, investment income (loss) and other income or expense items, which do not represent components of our operating income and operating expense.
Interest expense was $11.8 million for both 2006 and 2005. Investment income was $0.5 million and $2.9 million, for 2006 and 2005, respectively. The decrease is due to fewer gains recorded in 2006 as compared to 2005 for marketable securities on the open market.
A provision for income taxes of $19.9 million and $17.7 million was recorded during 2006 and 2005, respectively. The effective income tax rate used for both periods was 36%.
Stormy L. Dean - Chief Financial Officer
Thank you, Denise.
Good afternoon, everyone. Before we get started on our financial performance for the fourth quarter of 2007 and for the fiscal year 2007, I need to get all those legalities out of the way.
During the course of the conference call, we may make projections or forward-looking statements, and actual events may differ materially. We will refer you to the documents the company files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements.
Now I would like to continue with the financial highlights from the fourth quarter of 2007 and for the fiscal year 2007.
During the fourth quarter, revenue was $185.8 million versus $125.1 million for the same period in 2006. That's an increase of 49%.
For the 2007 fiscal year, revenue was $688.8 million compared to $434.9 million in 2006, and that's an increase of 58%. The fiscal year revenue numbers reflect the Naviance settlement of $9.9 million in the third quarter of 2007.
Excluding the Market Research group, the revenue for the quarter was $118.8 million, or an increase of 8%. Excluding the Marketing Research group, revenue for the fiscal year was $467.3 million versus $420.2 million, or an increase of 11%.
The Services group fourth quarter revenue was $37.2 million versus $33.8 million for the same period last year. That's growth of 10%. The Services group revenue for the fiscal year 2007 was $136.8 million compared to $120.9 million in 2006. That's an increase of 13%.
The Data group fourth quarter revenue was $81.5 million versus $76.7 million for the same quarter last year, a growth of 6%. The Data group revenue for the fiscal year 2007 was $330.5 million compared to $299.4 million in 2006, and that's an increase of 10%.
The fourth quarter revenue for the Marketing Research group was $67 million, and the fiscal year revenue for the Marketing Research group was $221.5 million.
The Marketing Research group is comprised of Opinion Research, Macro International, and the newly acquired NWC Research in Australia, Northwest Research group in Boise, and Guideline, Inc., based in New York. The Opinion Research acquisition was closed in December of 2006, and NWC Research and Guideline, Inc. were closed during the third quarter of 2007. The Northwest Research Group acquisition closed in the fourth quarter.
Our fourth quarter operating income was $26 million versus $21.6 million during the corresponding quarter of 2006. Operating income for the full year was $88.3 million versus $64.6 million for 2006.
Our EPS for the fourth quarter was $0.22 per share versus $0.20 per share in 2006. For the full year, 2007 EPS was $0.76 per share compared to $0.61 for the full year in 2006.
EBITDA for the fourth quarter of 2007 was $35.9 million compared to $29.2 million for the fourth quarter of 2006. EBITDA for the full year of 2007 was $127.8 million versus $94 million for the full year of 2006.
Our capital expenditures for the fourth quarter of 2007 were approximately $4 million compared to $6 million during the fourth quarter of 2006.
Capital expenditures for the entire year 2007 were $21.3 million compared to $21.1 million for the entire year in 2006.
We believe that the company will continue to grow in 2008, but because of the uncertainties in the broader economy and the problems in the financial sector, combined with the changing mix in our business models, we've decided to provide guidance in 2008.
Additionally, the company recently announced a $0.35 per share annual dividend to be paid in March. Because of the strong performance and cash flows generated in 2007, the Board wanted to reward shareholders with a significant return on their investment.
I will now turn the call over to Vin Gupta.
Vinod Gupta - Chairman, CEO, President of Small Business Division
Thank you, Stormy.
Following my prepared remarks, we will be ready for questions and answers.
As you all know, the economy is slowing, the credit markets are in turmoil, the financial industry is going through a lot of problems, the direct marketing industry is not experiencing growth like it did previously.
Despite all of that, infoUSA had a great fourth quarter and a great year in 2007.
During the fourth quarter, we had record revenues of $185.8 million. For the fiscal year 2007, we had revenues of $689 million.
Our operating income in the fourth quarter was $26 million compared to $21.6 last year. The operating income for the entire of 2007 was $88.3 million versus $64.6 million for the entire 2006.
Over the years, infoUSA has stayed away from overreliance on any particular industry or vertical growth or any geographical area. Today, we have over 12 proprietary databases which are viewed as the finest in the industry. On top of the databases, we create solutions for our customers to be used in their sales prospecting, direct marketing, database marketing, email marketing, and market research efforts.
Due to the acquisition of Opinion Research and Macro International, we are no longer a one-trick pony. Today, infoUSA is a diversified provider of services to sales and marketing departments of private and public sectors.
With the recent acquisition of NWC Research in Australia, Guideline in New York, and Northwest Research in Boise, Idaho, we have expanded our international presence and increased our presence in the market research sector.
The CNN Opinion Research poll has been recognized all over the world as the most reliable political poll. In addition to that, we offer market research services that include customer service, product surveys, employee surveys and other surveys to the public and private sector.
Our revenue breakdown by major sectors are as follows: Our Database revenue is about $330 million, Service sector is about $137 million, and Research sector is about $222 million.
Our largest customer in the private sector accounts for less than 2% of our revenue. That means we are not dependent on a few large customers or the performance of one industry or the economic conditions in any geographical area.
We are continuing to build on our successful subscription model that is the engine for future growth. The company added approximately 9,400 new subscribers to our subscription services during the quarter.
We just announced the appointment of Mark Israelsen as the new President of Salesgenie. And by the way, he was on TV today on CNBC promoting Salesgenie.
Salesgenie will be based in San Carlos, California. I created Salesgenie about four years ago. Within four years, the revenue's approaching about $40 million. I believe that Salesgenie will be the platform for providing online sales and marketing solutions to millions of salespeople and small business owners.
We were looking for a top-notch executive to head this jewel of a service for infoUSA. Mark has extensive background with Oracle SalesForce.com, specifically related to software development, systems integration, outsourcing, implementation and management consulting. Under his leadership, I'm confident that he'll take Salesgenie to its rightful place in the software service industry.
For the second year in a row we will have three commercials in the Super Bowl. That includes one commercial during the pre-game and two commercials in the game itself. These commercials will be offering 100 free sales leads to anyone who comes to our web site. While most advertisers spend millions of dollars on the script and production, we did this in-house and saved a lot of money. Last year's commercial was a great success. I'm expecting the same success this year.
We also announced our plan to compile the U.K. business database. As we speak today, the database is being compiled in Manchester, England. They will use the same process of compiling the database from public sources like we do in the U.S. And then all the businesses in the United Kingdom will be telephone verified for accuracy and additional information will be compiled on the businesses. When the database is complete, it will be the finest database ever compiled in the history of the U.K. We will be creating products and services from this database, and they'll be sold to salespeople, small business owners and large companies in the form of customized sales lead products, online access subscription services, and license agreements to value-added resellers.
The Opinion Research acquisition is performing quite well. The Macro International acquisition, which provides services to the public sector, exceeded their projections for the newly awarded contracts with the federal government in the fourth quarter and the whole year.
We also announced the acquisition of Direct Media, Inc. Direct Media is the bluest of the blue-chip companies in the direct marketing industry for the last 40 years. With this acquisition, it will give us a better market share in the direct marketing and database marketing industry. We also wanted the domain name, MailingList.com, and it is our plan to monetize that wonderful domain name.
We are also in the process of completing pictures of businesses in the U.S. and Canada. These high-quality pictures have been very well received by the major search engines, and we plan to complete this process in most of the major metropolitan areas by the end of this year.
We are also compiling more information from the web sites of businesses such as business description, executive names, hours of operation, credit cards accepted, et cetera. Once the information is compiled, we will be offering a more robust search so our customers can search businesses in any area by a more detailed business description such as customers will be able to search car repair shops who fix high-priced sports cars or the painters who specialize in faux finish. We will also be enhancing our executive search database. It will allow our customers to search executives by title in any industry or search for executives by ethnicity.
It is our plan to allocate more investment dollars towards upgrading our web sites. We will be offering more features and more solutions on all of our web sites so customers can select their sales leads, use our analytical models, and send a direct mail piece without human intervention. [inaudible] is leading the charge on that front.
Due to a highly successful performance in 2007, the Board has decided to reward the shareholders with a cash dividend of $0.35 per share.
This concludes our prepared remarks. I want to thank you for your interest in infoUSA, and remind you that the purpose of today's conference call is to discuss our fourth quarter and yearly results.