The Dolan Company (NYSE: DM), a leading provider of professional services and business information to the legal, financial and real estate sectors in the United States, today announced that it has amended its senior lending agreement, restructured its Florida operations of National Default Exchange, or NDeX, and is commenting on its third quarter results.
The company has amended its existing bank agreement with its current lending group to reset its covenant ratios and make certain other changes. “We are pleased with the changes to our bank agreement and the greater flexibility it will provide to us,” said Vicki Duncomb, chief financial officer. Details of this amendment are included in the company’s Form 8-K filed today with the Securities and Exchange Commission.
The company also said it has restructured its NDeX Florida operations in order to provide its proprietary technology to the Albertelli law firm in consideration for licensing fees and other financial considerations. NDeX returned existing processing operations to the law firm. Had the restructuring occurred on January 1, 2012, the company’s 2012 annual revenues would have been reduced by $10-$12 million but the company’s EBITDA from continuing operations would be increased by at least $1 million. The company said NDeX remains committed to the Florida market.
This restructuring is considered a triggering event under GAAP and the company has been required to assess whether the goodwill of its NDeX reporting unit has been impaired. Given the current depressed operating results of the mortgage default processing industry, the company has determined that certain of the finite-lived intangible assets of NDeX as well as the goodwill have been impaired. Accordingly, the company plans to record a non-cash, pre-tax charge for impairment of these assets of up to $165 million in the third quarter. Details regarding the restructuring and impairment charge are included in the company’s Form 8-K filed today with the Securities and Exchange Commission, and the final amount of the impairment is expected to be announced in connection with third quarter results in early November.