The Dolan Company (NYSE: DM), a leading provider of professional services and business information to legal, financial and real estate sectors in the United States, today announced financial results for the three months and year ended December 31, 2012.
“For the year, our e-discovery business grew revenue by almost 17% while our default-related business, National Default Exchange, or NDeX, declined by 18%,” said James P. Dolan, chairman, chief executive officer, and president. “Our appellate services business, Counsel Press, remains a consistent and steady generator of free cash flow, as does our Business Information Division, which experienced a modest revenue decline in 2012,” Dolan said.
“In the fourth quarter, our foreclosure related businesses were significantly affected by the reduced pace of referrals as new regulations and procedures were put in place. Both NDeX and our public notice businesses experienced negative operating leverage in the fourth quarter as we incurred depressed referral volumes. Fourth quarter results also were affected by almost $2 million of non-recurring items including severance. However, we remain excited by the growth opportunities in our e-discovery business, which saw strong performance.
“In the fourth quarter, revenues at NDeX declined by 22% compared to last year. Although we were cautious about referral volumes due to the implementation of new federal guidelines, the pace of referrals was more depressed than anticipated. Each mortgage servicer is on its own timeline in handling the implementation of new regulations used to initiate foreclosure referrals. Further, the new national servicing standards, which were introduced in January of 2013, continue to cause delays and depress referral volumes. Given this, we have moved aggressively to cut costs. We believe the pace of foreclosure referral volumes will improve in the future, but predicting the timing and rate of that improvement remains a challenge. As the year progresses, we expect to benefit from price increases negotiated with some of our law firm partners. We also are seeking future opportunities to license our NDeX technology and infrastructure on a recurring fee basis in both new and existing markets,” Dolan said.
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